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10 Most Tax-Friendly States for Retirees

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Just as you shouldn't let tax considerations drive your investment decisions, you shouldn't move to a state just because its taxes are low. But if you're considering several retirement destinations, taxes should certainly be a factor because they can have a significant impact on the amount of income you'll have to spend in retirement.

Likewise, if you have homes in more than one state, you could save money by establishing residency in the state with the lowest tax burden. If you opt for that strategy, be careful, because states are increasingly scrutinizing part-year residents, says Kathleen Thies, state tax analyst with CCH, a leading provider of tax information and software. In addition to spending more than half of the year in your chosen state, she says you should register to vote and obtain a driver's license there.

These ten states impose some of the lowest taxes on retirees in the U.S., according to Kiplinger's analysis of state tax rules.

SOURCES: State tax departments, CCH and the Tax Foundation.

10 Most Tax-Friendly States for Retirees
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