Retirement Tax Heaven (and Hell)
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Where you live can have a huge impact on your tax bill in ways that may surprise you. Some states are more tax-friendly for retirees than others -- particularly if you are living on a fixed income -- can have a big impact on how much you have left over to spend.
Click through our gallery to see which states qualify as "heaven" and which are "hell" for income tax, pension, social security benefits, sales tax and property tax.
Read Kiplinger's Article
Next: States With No Income TaxMore on Retirement From Kiplinger:
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States With No Income Tax
Don't assume that a state with no income tax qualifies as a tax haven. High sales and property taxes can more than offset the absence of an income tax.
7 States With No Income Tax
Alaska
Florida
Nevada
South Dakota
Texas
Washington
Wyoming
(N.H. and Tenn. tax only dividend & interest income that exceeds certain limits.)
Next: Pensions - Tax HeavensMore on Retirement From Kiplinger:
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Pensions - Tax Heavens
Only three states exempt virtually all retirement income (including public and private pension benefits, 401(k) and other retirement-plan distributions, and IRA withdrawals) from state income taxes.
3 Best States for Pensions
Illinois
Mississippi
Pennsylvania
Next: Pensions - Tax HellsMore on Retirement From Kiplinger:
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Pensions - Tax Hells
Five states are particularly tough on retirees. Not only do they fully tax most pensions and other retirement income, but most of them also have fairly high top tax brackets.
5 Toughest States for Pensions
California
Connecticut
Nebraska
Rhode Island
Vermont
Next: Social Security Benefits - Tax HeavensMore on Retirement From Kiplinger:
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Social Security Benefits - Tax Heavens
36 states and the District of Columbia don't tax Social Security.
36 States That Are Heaven
Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin and Wyoming
Next: Social Security Benefits - Tax HellsMore on Retirement From Kiplinger:
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Social Security Benefits - Hells
The remaining 14 states tax Social Security benefits to some extent.
14 Tax Hells
Colorado, Connecticut, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia. (Iowa will gradually phase out its Social Security tax by 2014, starting in 2008)
Next: Sales Taxes - Tax HeavensMore on Retirement From Kiplinger:
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Sales Taxes - Tax Heavens
These five states have no state sales taxes.
Top 5 States
Alaska
Delaware
Montana
New Hampshire
Oregon
Next: Sales Taxes - Tax HellsMore on Retirement From Kiplinger:
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Sales Taxes - Tax Hells
These five states each have a state sales tax of 7%, the highest in the nation.
5 Worst States
Indiana
Mississippi
New Jersey
Rhode Island
Tennessee
Next: Property Taxes - Tax HeavensMore on Retirement From Kiplinger:
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Property Taxes - Tax Heavens
Based on data from a 2006 Census Bureau survey and Tax Foundation calculations these are the five states with the lowest median real estate taxes.
5 Best States for Propert Taxes
Louisiana
Alabama
West Virginia
Mississippi
Arkansas
Next: Property Taxes - Tax HellsMore on Retirement From Kiplinger:
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Property Taxes - Tax Hells
At the other end of the spectrum, these five states have the highest median real estate taxes. (from highest to lowest according to 2006 Census Bureau survey and Tax Foundation)
5 Worst States
New Jersey
New Hampshire
Connecticut
New York
Massachusetts
Also: Retire on Time? Sure You Can
Also on AOL: Answers to 10 Tough Retirement QuestionsMore on Retirement From Kiplinger:
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10 Toughest Retirement Questions
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