Although it is obvious that many seniors prefer the warm climate and leisure activities of states such as Florida and Texas, they are not necessarily the best where income is concerned. Many retirees judge the suitability of a state based simply on whether or not it has an income tax. This is an oversimplified way to judge the tax burden of a state, and can lead to paying very high amounts each year in taxes. In fact, some of the states that have no income tax more than make up for it in other forms of tax.
Retirees want to save as much of their money each year as possible, and many are drawn to certain states on the east coast that do not charge a dime on retirement income. Although this is an understandable reaction, failure to look closer can cost these seniors a great deal of money. Perversely certain states are actually the most expensive places in the United States to live. The average property tax in these places may amount to a whopping $6,551. Combine that with $840 on average in sales tax, and these residents are typically paying around $7,391 in taxes per year.
Surprisingly, other states are actually the most cost effective for seniors. Living in some other places costs on average around $543 per year in taxes. We could mention other places that are affordable states for seniors, with residents of various residential areas paying around $1,114 per year. This is much less than supposedly tax friendly states.
Although income tax is a major component of overall tax burden, it is very important to take other factors into account. Be sure to research the cost of homes, as well as general cost of living. In areas with high home prices, property tax can really end up costing an arm and a leg each year. Avoid paying too much by researching state tax laws before making a move. The general livability of a state is also important.
Resources that are available on the internet can help greatly in the search for the best retirement states. Finding the best retirement states is all about striking a balance between taxes and livability. Just because a state has the lowest taxes doesn't mean you should live there, but don't neglect to check out a state's tax laws before moving. Some states can make your retirement dream unaffordable if you are not careful.
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