Popular destinations often include states with either no – or low – income taxes, like Florida and Texas.
President Trump recently changed his domicile from New York to Palm Beach, Fla., which experts say could be motivated by his decision to not only lower his tax liabilities, but may also be advantageous as he potentially begins to think about passing assets down to his children.
A new study released by U.S. World News, based on data from Wolters Kluwer & Accounting, the Tax Foundation and the U.S. Census Bureau, identified the top 13 states for retirees. Here’s a look at the results (in alphabetical order):
One of the benefits of retiring in Alabama is that the state doesn’t tax Social Security benefits or traditional pension payments.
The average property owner paid a median of $591 in real estate taxes in 2018.
According to real estate website Zillow, the median listing price for a home on the market is $219,900.
The state does collect individual income taxes, with rates that begin at 2 percent for the first $500 of taxable income, rising to 4 percent on the next $2,500 of taxable income and increasing to 5 percent on all taxable income over $3,000.
Alaska is one of a handful of states in the U.S. that has no state income tax. It also has no state sales tax.
The median listing price for a home in Alaska is $284,900, according to Zillow, but real estate taxes are much higher than in Alabama — at a median of $3,250 as of 2018.
Another plus? Residents who lived in the state for at least a year were paid $1,606 in 2019 from an oil wealth trust fund.
Well-known as a haven for retirees, Florida is another state that collects no income taxes.
It also levies no statewide estate tax.
The median real estate tax as of 2018 was $1,938.
Florida received more movers — 566,476 people — than any other state last year, according to the U.S. Census Bureau.
A big benefit for retirees in Illinois is that they are able to subtract Social Security and pension income from their federal adjusted gross income.
Illinois has a flat income tax of 4.95 percent.
Real estate taxes are high, however. Those cost taxpayers a median of $4,480 in 2018.
Sales taxes also typically add about 6.25 percent to purchases.
As in Illinois, pension and Social Security payments are able to be subtracted or excluded from taxable income in Mississippi.
The state has a graduated individual income tax bracket system, with rates ranging from 0 percent on the first $1,000 of taxable income to 5 percent on taxable income over $10,000.
Real estate taxes are relatively low, at a median of just $960 as of 2018.
Retirees in Nevada are not subject to any statewide income taxes.
The median real estate tax tab in 2018 was $1,640, while the state sales tax rate is 6.85 percent.
The median listing price for a home in the state is $320,000, according to Zillow.
While New Hampshire has no individual income tax, residents do pay a 5 percent rate on income from dividends and interest.
The state has no sales tax, but residents are hit with high property taxes. As of 2018, the median was $5,641.
A big benefit for retirees in Pennsylvania is that Social Security benefits are not included in taxable income.
Further, distributions from 401(k) accounts and IRA withdrawals taken after age 59 1/2 are typically exempt from state income tax.
Pennsylvania has a flat income tax rate of 3.07 percent.
The median property tax bill among residents last year was $2,871.
Residents in South Dakota pay no income tax to the state.
They do, however, pay a sales tax rate of about 4.5 percent.
In 2018, property owners paid a median of $2,159 in property taxes.
The median listing price for a home in the state is $224,900.
Like New Hampshire, Tennessee only taxes income from dividends and interest at a flat rate of 6 percent. However, residents aged 65 and older with low incomes are exempt.
Property taxes are relatively steep, homeowners paid a median of $1,205 in 2018.
Texas is another hotspot for relocating retirees. Like Florida it has a temperate climate and no state income tax.
Property taxes in Texas can be onerous. Homeowners paid a median of $3,216 in 2018.
The median listing price for a home is $276,000, according to Zillow.
Washington also levies no statewide tax on income, but it makes up for that lack of revenue in other ways.
Property taxes, for example, cost homeowners a median of $3,579 in 2018.
The sales tax rate is also 6.5 percent.
Retirees in Wyoming are not subject to state income taxes.
The state sales tax rate is 4 percent.
The median listing price of a home in the state is $260,000, and the median property tax bill as of 2018 was $1,372.