While many spend their youth hustling, earning, and fulfilling their dreams, working full-time for a long time is a huge responsibility. So, those over 60 deserve a much-needed respite from work, and retirement helps them unwind after decades of financial responsibilities. The importance of retiring in financially conducive environments cannot be overstated. Retiring in certain cities can help reap maximum financial benefits and stability in retirement. Here are some such retirement-friendly states in the country:
Pennsylvania
This tax-friendly state is ideal for life after retirement for many reasons. To begin with, retirees in Pennsylvania can reap the benefits of full exemptions on retirement income, including pension for those aged 60 and above, Social Security benefits, and payments received from retirement accounts, including Individual Retirement Accounts (IRAs) and 401(k) accounts. Further, Pennsylvanians enjoy tax-free purchases of items such as clothing, pharmaceutical products, groceries, and heating fuel. The Senior Tax Reduction Inventive Volunteer Exchange (STRIVE) program provides real property tax credits to senior citizens volunteering in public schools in their districts.
Florida
Besides boasting a favorable climate, Florida offers a high quality of life and several healthcare facilities, making it extremely conducive for senior citizens. Additionally, it does not impose state income taxes, i,e., state taxes on Social Security benefits, so retirees get a significant cost reduction. It is among the 10 most tax-friendly states in the country, making it one of the best places to retire.
Illinois
Illinois offers tax exemptions from almost all retirement income sources, including pension income, social security benefits, and income from retirement savings accounts, such as 410(k)s. Also, the Community Care Program (CCP) in this state offers healthcare services to older adults who are eligible for Medicaid.
West Virginia
West Virginia is considered the third-best place to retire within the country after Florida and Texas. The Social Security income and withdrawals from retirement accounts are only partially taxed, while wages are taxed at usual rates. The current marginal state tax rate is 5.9%. West Virginia offers pleasant climatic conditions and natural splendor, making it suitable for a relaxed retired life.
Texas
Besides enjoying mild, pleasant winters and cultural abundance, Texas retirees over 65 can also reap the benefits of property tax exemption or deferment for their primary residence. Additionally, it is among the seven states in the country that do not require one to pay a personal state income tax. Texas residents can also enjoy Social Security benefits upon retirement.
North Carolina
North Carolina allows retirees over 65 an exemption of up to $35,000 of their retirement income from state taxes, helping save considerable money. Further, people are exempt from taxes on Social Security income, and income taxes were reduced to a meager 4.9% in 2022.
Georgia
Listed among the top 10 places to retire within the country, Georgia allows for exemptions from Social Security income taxes and provides deductions of up to $65,000 per person for individuals over 65. Additionally, the state does not levy inheritance or estate taxes. Its low cost of living and relatively fewer crimes make it one of the best places to retire.
Kentucky
Kentucky provides exemptions on Social Security income taxes for retirees; further, it exempts them from taxes levied on other income sources, such as IRAs, pensions, and 401(k)s. IRAs are exempt from taxes for up to $31,110 per individual. It is also a good state to retire owing to the low cost of living and tax-break options.
Colorado
Colorado has repeatedly ranked among the most tax-friendly states in the country. Its income tax range is as low as 4.63%, and it also offers considerable deductions on retirement income. Retirees over 65 years of age get an exemption of up to $24,000 from private, government, and military retirement plans, including IRAs. They are also exempt from Social Security income taxes.
Maine
Maine has the largest retirement-age population in the country, and for good reason. It is one of the best states when it comes to safety ratings and reviews, with a good quality of life and a low cost of living. Retirees can enjoy full exemptions from Social Security income taxes and exemption of up to $25,000 of other federally taxed retirement income, including taxes on pension income, 401(k)s, and IRAs. Further, a recently launched retirement program for homeowners in Maine allows them to freeze their property taxes at the previous year’s levels. Such benefits have elevated the state’s positioning among the most retirement-friendly places in the country.
Retirement is a significant milestone in any professional’s life. Retiring at the right place is just as important as retiring at the right time. Selecting an ideal place allows one to enjoy maximum savings and a comfortable post-retirement life.