Personal Finance

The Best States to Retire…From a Tax Perspective

You spend your life working hard to build a nest egg, saving toward retirement in hopes of maintaining a comfortable lifestyle and enjoying the fruits of your labor. There are a number of things that could compromise your retirement income—some that you can control and some you cannot. One aspect of managing expenses in retirement that could impact your finances is the tax environment in the state which you will reside.

Do you see yourself enjoying the salty air on the beach or would you prefer to cozy up by the fireplace in the mountains? Lifestyle preferences aside, it is important to consider the tax implications of your state of residence in retirement. Some states offer tax advantages, which may yield savings, that could result in increasing the amount of your retirement income, providing additional cash flow to put aside for health care costs or other unexpected needs. Of course, everything is dependent upon your individual circumstances, but here is a general guide to some of the most tax-friendly states for retirees.

How Retirees Pay Taxes per State
Source: AARP

Considering Long-Term Care Costs
Beyond taxes at the state level, another important driver of costs in retirement is long-term care. How do these particular states rank by long-term care costs? As the cost of health care continues to rise, it is also important to consider the estimated cost of long-term care (i.e., assisted living facility or home care), when making important decisions about your cost of living in retirement. Note that the rates differ widely depending on state, facility, level of care, duration of stay, and other factors.

Top 10 Tax-Advantaged States for Retirees
Table 1, Source: AARP; Genworth Cost of Care Survey

Tax Considerations in Additional States in which Janney Operates
Table 2, Source: AARP; Genworth Cost of Care Survey

Contact us today to discuss your retirement plans and address important considerations to ensure you can maintain your standard of living even after you retire.

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