Congrats! You’ve raised your children, paid off your mortgage, and are now ready to retire. With that in mind, where should you spend your golden years? We’ve created a list to help you find the best state to retire on a fixed income, including those that may provide a higher quality of life during retirement as well as financial advantages.
Financial Sense: Is It Important In Retirement Relocation?
Many of the states in the United States have no state income tax for those of us who wish to retire in the country. If you can afford to move, many retirees will do so, particularly in states like California or New York where taxes are expensive.
About Retirement Lifestyle?
Wealth does not guarantee a happy retirement. For example, having money does not guarantee being free to wander in nature or (when it is safe to do so) to enjoy excellent meals, performances, and museums when you want to. When we retire, many of us won’t have enough money to travel the world, so we may have to downsize or move.
Because it’s such a personal choice, no one can declare with any certainty which states provide the greatest lifestyle for retirees. If yes, do you like the hustle and bustle of the large city? Or would you rather be in a tiny town where it’s quiet? Or would you rather be in a quiet rural setting? Which states have the greatest quality of life depends entirely on personal preference.
The state tax in Alabama is capped at 5%, yet living in Alabama is extremely affordable. Alabama has the ninth-lowest cost of living (13 percent below the national average) of any state in the union, with a typical household income of $24,000. As a result, in the Heart of Dixie state, a retirement income of $48,000 may go a long way since golf, eating, taxes, housing, and even medical care are among the most affordable in the country. In addition, the state has 60 miles of beautiful coastline and beaches, and it provides special living advantages to veterans of the United States military services.
Florida is the best state to retire on a fixed income, according to Money Magazine. Florida has a low cost of living, just 1% more than the national average, and no state income tax, making it one of the most tax-friendly states in the union. For starters, Florida provides a broad range of living choices, from the vast, gorgeous beaches of Daytona Beach to the theme parks and lifestyle facilities of Orlando. There’s also a college town like Tallahassee with a southern charm that you may find in the state as well.
The typical income in the Peanut State is $26,000, while the state’s cost of living is 15th in the country (7 percent below the national average). As you can see, both of those numbers point to another state with warm weather and low housing, health care, and leisure expenses for seniors living on a fixed income.
Hawaii gets an A+ for beauty, beautiful beaches, and having the finest tropical climate in the whole United States. However, the Aloha State is also a sanctuary for retirees who want a low-maintenance lifestyle. It’s worth noting that healthcare expenses in the state average a whopping 11 percent less than the national average. The average cost of living in Hawaii is 87% more than the national average, but the sunsets are spectacular, the wildlife is plentiful, and island hopping is convenient and enjoyable for retirees with a laid-back attitude.
The cost of living in the Potato State is 5 percent lower than the national average for retirees, and the average yearly income is slightly over $40,000 in the state. Idaho has 30 state parks, including a section of Yellowstone National Park, and health care expenses are cheap. Physical fitness is also important in Idaho. The cost of a house here is $176,000 less than the national average, making it quite affordable.
Alaska is another state without a state income tax, as well as no inheritance or estate taxes. The average state and local sales tax rate is 1.78 percent, making it the second-lowest in the country. As a result of this, the median property tax in the area is one of the lowest. Property taxes on a $232,900 house in Alaska for a retiree are expected to be $2,422. The average home-owner pays 1.04 percent of the market value for their mortgage payment.
Alaska is the best state for retirees looking to supplement their income, according to WalletHub’s rating of taxpayers. The number of people above the age of 65 is greatest in this state.
7. South Dakota
One other excellent state for retirees is South Dakota, which does not impose any state income taxes as well as no estate or inheritance taxes. It also has extremely low average state and local sales taxes.
Property taxes account for 1.28 percent of a typical homeowner’s income. Homeowners who own a $126,200 home spend an average of $1,620 in property taxes each year. This places the state squarely in the centre of the pack, at 27th out of the 50.
Additionally, South Dakota is a senior-friendly work state, with the third-highest proportion of employees 65 and over.
There is no estate tax in Mississippi. In addition to the low state income tax (beginning at 3%), additional factors including the cheap cost of living and the pleasant environment make this an excellent location for retirees. On average, it charges 0.52 percent in property taxes, making it the fourth-lowest in the country. Mississippi property taxes, based on a $98,000 home’s valuation, would be $508.
In addition, the state’s adjusted cost of living is among the lowest in the nation, and the yearly cost of in-home services is among the lowest in the country.
Despite having the nation’s highest gas taxes, Pennsylvania has no estate tax. States and municipal governments together collect an average of 6.34% in sales taxes, with the state income tax rate being 3.07 percent. Property taxes in the state are the sixth highest in the country, with an average of 1.35 percent. For a $164,700 home, the annual tax bill would be $2,223 for the owner. Finally, the state of Pennsylvania levies a 4.5 percent inheritance tax.
Pennsylvania is a popular retirement destination because of its low cost of living. It is home to the fifth-largest number of people over the age of 65.
There are no estate or inheritance taxes in Kentucky. Nevertheless, if you relocate to this state, you will be required to pay additional taxes. Depending on where you live, state income taxes may be as little as 2% or as high as 6.0%.
Kentucky’s property tax rate is the seventh lowest in the nation. For a property worth $120,200, the annual payment would be $1,042.