Retiree Tax Heavens (and Hells), 2009-2010

Federal taxes will be about the same no matter where you live, but state and local tax burdens can vary greatly, especially if you’re retired. Click on any state below to get a full lowdown on tax treatment for retirees. Or select a tax category that interests you, to see which states have the highest and lowest rates. For more, read Tax-Friendly Places to Retire.


STATES BY ALPHABETICAL LISTINGS

 

Where’s the best place for you to retire? A lot will depend on your sources of income. Many states that have an income tax exempt certain types of income—such as government and military pensions, Social Security benefits or even distributions from private pensions or retirement savings up to a certain amount each year. In fact, income taxes may be the least of your worries in retirement. Property taxes can be a bigger ongoing concern, with huge fluctuations from city to city and county to county. And remember: state and local sales taxes will nick you every time you open your wallet.

Discuss

Reader Comments (103)

Posted by: ANNIE at 08/20/2009 08:42:21 PM

I LIVE IN ILLINOIS AND GET A PENSION FROM THE STATE OF IOWA WHICH IS NOT TAXED...ILLINOIS DOES NOT TAX PENTIONS OR S.S.

Posted by: Vin Capasso at 08/21/2009 08:56:11 AM

...you are...excluding NH and TN from the states with no income tax, just because these 2 states tax high dividend and interest earners still does not qaulify them as having an income tax. You also (aren't) showing an overall tax burden and cost of living; in that case NH (for example) would be a very attractive state.

Posted by: Joy at 08/21/2009 09:19:31 AM

Indiana does impose estate taxes that are high compared to other states and usually require an attorney to file which costs more. They don't like to release assets until they have their tax in hand. I would recommend retiring elsewhere if you have over 100,000 in the bank. It is a graduated system.

Posted by: Rocky at 08/21/2009 09:45:00 AM

California property taxes can be substantially higher than 1% of assessed value. The big culprits are school district parcel taxes and debt service on bond issues. They can easily add $500 or $1,000 to an annual property tax bill. In some cases, taxpayers over 65 can file for an exemption from one or more of the parcel taxes if they are owner occupants. California taxpayers will be saddled with the high costs of public employee pensions. If you are not currently a resident, don't come.

Posted by: VM - IN CT at 08/21/2009 12:17:56 PM

Close to retirement resident of CT. Your phrase "tax nightmare" is right on the mark. We already have retirement plans to move.

Posted by: FloridaResident at 08/21/2009 02:08:29 PM

If you have property in a state with estate tax where you are not a resident,(you might) put it in an LLC to change the character of the property to untaxable for estate tax. May be difficult in the state of tax Dracula (NY)

Posted by: ExCalifornian at 08/21/2009 02:10:41 PM

If you unresident yourself from California don't give them any excuses to keep taxing you. Close all accounts, relationships, property and keep out of the state as much as possible. They are famously aggressive, like NY.

Posted by: Kengsr at 08/21/2009 02:26:21 PM

I can not imagine a lower tax burden than retiring here in rural NH. Cost of heating is perhaps or biggest concern here in the snow belt. Our property taxes are not high since vacation homes of Mass residents add significantly to tax base. All you need to do is pick a low tax town.

Posted by: NormoftheNorth at 08/21/2009 05:41:12 PM

This webpage does not do justice to just how low the taxes are here in Alaska. For instance, it does not state that there are huge areas of rural Alaska that do not have ANY property taxes on real estate. You could have a beautiful retirement home on Prince William Sound and pay zip in property taxes on it. Also, not only does Alaska not have any income tax, but the state pays every man woman and child free money every year (the Permanent Fund Dividend). Last year it was $3000 EACH. Finally, shopping in Anchorage is a dream.....there are no taxes whatsoever on sales here. Buy a car for the actual price listed on the sticker, and save thousands in sales taxes. What a concept. BTW, don't share this information with anyone else; it's secret.

Posted by: Calif_Refuge at 08/21/2009 06:43:38 PM

Goodbye Calif. Not one more dollar from this high income retiree. I won't even come back to visit.

Posted by: Jeanne Williams at 08/22/2009 03:46:07 PM

How about any information on best towns to both retire & start a young family ( preferable in the West. One daughter in Seattle, one son in Western AZ, and one daughter with three little ones trying to get out of California with little money.

Posted by: CNMI Resident at 08/23/2009 03:18:14 AM

There are other "states" in the U.S. to retire to besides the 50 states. There are U.S. Territories in the Carribean and Pacific. Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, and Commonwealth of Northern Mariana Islands. I know our income taxes in CNMI are much lower (no federal income tax), no property or sales tax either. No heating bills, but electricity (for air conditioning) is very high. Health care not so good though.

Posted by: petey at 08/23/2009 08:47:04 AM

Not sure where they got there info for state income tax but I live in Tennessee and we dont have one.

Posted by: john lagace at 08/23/2009 09:10:26 AM

How can anyone live in the northeastern states or california? Seems the most liberal states have ridiculous taxation and nothing beneficial to show for it. Texas has low taxation, maximum freedom, more arts and culture than all but NYC and it's affordable. Come on down, but you have to vote conservative or we shoot you.

Posted by: Mass. Retiree at 08/23/2009 12:21:09 PM

Correction: Mass. sales tax went up Aug. 1, not 2010. No complaints here. Don't forget, our taxes provide for services the private sector doesn't. Waste and inefficiency? No worse than in the private sector. Oops, are my political views showing?

Posted by: vertiz at 08/24/2009 07:37:27 PM

[Mass. Retiree: Waste and inefficiency? No worse than in the private sector.] I don't know of many businesses that can run a $1.4 billion deficit and stay in business; that level of ineptness is reserved for governments. ...Excepting, of course, businesses propped up by governments because they're "too big to fail". [Mass. Retiree: Oops, are my political views showing?] Indeed. It takes a very special ideology to overlook "inconvenient truths" like fiscal insolvency.

Posted by: Frosty Autumn at 08/27/2009 12:17:11 PM

For john lagace - I lived in Houston, would not go back for any amount of money. While there is no state income tax, real estate taxes were higher than what I paid in NY for half the land. My insurance premiums, especially for automobile, more than doubled when I moved to Texas. And I lost personal freedoms - the freedom to enjoy a meal without smoke in my face, the freedom to enjoy my home and property without the threat of a neighbor's stray bullet or exploding firework piercing my window, the freedom to read about news other than in Texas without a special subscription.

Posted by: frankania at 09/01/2009 12:51:15 PM

What about central high-altitude Mexico? Why stay in the USA when you can have a perfect climate, low living cost (maid and gardener), and a weak...govt. who doesn't intrude in your life?

Posted by: paradiselost at 09/03/2009 06:37:03 AM

As a native Floridian I have seen a marked increase in taxes lately. This state has been invaded by the NY crowd and their high tax ideas. I would recommend a second thought before locating here. The hidden fees will destroy wealth and the big brother attitude is growing. Time to live on a boat and only come ashore for short stays.

Posted by: rick at 09/03/2009 08:03:14 AM

SOUTH CAROLINA get rid of your personal property taxes on vechicles and real estate it is holding this state back from being affordable place to retire .

Posted by: old geezer at 09/03/2009 08:29:54 AM

THE NUMBERS FOR NORTH CAROLINA ARE MISLEADING. THE SALES TAX JUST WENT UP 1 PERCENT AND THE INCOME TAX RATE JUST INCREASED AS DID THE GASOLINE TAX, TOBACCO AND ALCOHOL. NC NOW ENJOYS A PLACE NEXT TO CALIFORNIA WITH SOME OF THE HIGHEST TAXES IN THE NATION.

Posted by: Lisa in Tennessee at 09/03/2009 08:30:51 AM

Tennessee doesn't have any income tax. You left that one off your list. Editor's Note: Tennessee doesn't have an state tax on most income, but it does tax interest and dividends. Hope this helps.

Posted by: dxbl at 09/03/2009 08:42:24 AM

Franfania: Like your Mexico idea. Would you be more specific on location/cities?

Posted by: El-MA at 09/03/2009 08:55:10 AM

MA retirees who retire from a government job (state, fed, local - including teachers) have their social security cut (Government Pension Offset. Lucky us we're one of 7 states that do this. If you are receiving a small pension and have your SS cut it's really difficult to make ends meet.

Posted by: george roberts at 09/03/2009 09:03:42 AM

Actually most large companies run huge deficits - think bond issues...essentially IOU's.

Posted by: houstonian at 09/03/2009 09:25:34 AM

Frosty Autumn - where the hell did you live in Houston? Yes Harris County has higher taxes than surrounding counties in Texas - that's life in the big city? What are you comparing "half the land" of in Texas vs. New York? How much did you pay for double the land in NY? If you get away from the big city land in Texas is a steal compared to NY. Personal freedoms from stray bullets, fireworks?? - give me a break. Sounds like you need to be tucked away into a little apartment. Subscription for news? What!?

Posted by: RAY at 09/03/2009 09:30:39 AM

NY DOES NOT TAX SOCIAL SECURITY BENEFITS

Posted by: drchirom at 09/03/2009 09:39:05 AM

Mexico is a god idea Frankania, where do you live in Mexico?

Posted by: SUE at 09/03/2009 09:40:58 AM

TENNESSEE ALSO HAS NO STATE INCOME TAX AND A LOW PROPERTY TAX.

Posted by: PDT at 09/03/2009 09:53:53 AM

Frankania, Tell me more about Mexico. Is there a single source to educate myself on relocating?

Posted by: terrie at 09/03/2009 10:10:41 AM

you might not have to pay SS tax in wisconsin, but they will get you every other way they can, I'm looking to head out so I can enjoy my retirement.

Posted by: Ali at 09/03/2009 10:37:42 AM

NEW HAMPSHIRE HAS NO INCOME TAX!! That makes it 8 states w/o.

Posted by: george at 09/03/2009 10:50:49 AM

Retired in Delaware. Have lived in 10 other States and this one is great. State and Local government officials and employees are first rate. Taxes are low and service is excellent and professional. Not many negitives except that it can get lonely in the winter down here at the shore.

Posted by: RS at 09/03/2009 11:00:12 AM

Why is Pennsylvania not on your list of states that impose an estate tax? I paid a Pennsylvania inheritance tax bill in 2008 -- did they stop collecting inheritance tax in 2009 ?

Posted by: TexRex96 at 09/03/2009 11:03:33 AM

The IL information on sales tax in this article inaccurately states: "Local government taxes can raise the total to a high of 8.75%." Maybe in 1999. In parts of Chicago today, sales tax exceeds 11% and is scheduled to rise again later this year. Chicago has the highest sales tax in the country.

Posted by: radams at 09/03/2009 11:35:56 AM

...Alabama does NOT tax social security benefits but they are not listed in the list of states that do not tax the social security so you HAVE to look at each state separately. Also, on property taxes a lot of states --Alabama for one and Maryland for another--have exemptions for people with disabilities (100%) so again the lists are misleading. Look at each state individually.

Posted by: Micheal at 09/03/2009 11:44:21 AM

No mention was made scpecifically for the recent disabled veteran of 100% having NO land or school tax in the state of Texas. This law retroactive to January 2009.

Posted by: Barry at 09/03/2009 12:42:25 PM

NJ has got to be the worst state for retirement. Corrupt politicians and high taxes are the order of the day. We will not be satisfied here until we turn the entire state into a Detroit-like situation. Nobody who earns a salary will want to live here.

Posted by: Linda at 09/03/2009 01:00:17 PM

Please note, NH does not have an income tax! Editor's Note: Hi Linda and other folks from New Hampshire. Just to clarify, New Hampshire doesn't have a broad-based tax on income, true, but it does tax interest and dividends, with puts it in the same category as Tennessee. The states we list with no state income tax have no tax on income, period. Hope this explains our methodology.

Posted by: Fred at 09/03/2009 01:11:21 PM

I live in Oklahoma and they do tax a portion of your Social Security Benefits.

Posted by: Dale Dugan at 09/03/2009 01:30:18 PM

You need to add New Hampshire to your list of states without income tax and as reported no sales tax. Editor's Note: Hi Dale, NH and Tennessee tax interest and dividends as income, which is why they are not included among states without an income tax. Hope this helps.

Posted by: VICKIE at 09/03/2009 02:02:23 PM

In Georgia in Floyd County this year they took away our Homestead exemption due to the economy??? Which hurts older property owners on a fixed income ...cant get the senior discount til age 65 then it is only on the portion of your home and small acreage which I happpen to own 18 acres so doesnt apply to my whole homestead whata rip off when you work hard to own something then the school tax and no homestead makes my tax bill over 1600.00 this year OUCH!

Posted by: Kathy Tolbert at 09/03/2009 02:50:07 PM

WV is another state where they are not very generous in retiree tax breaks. Federal and other public employee retirees only get $2000 break on their state taxes and $8000 when they reach 65. I have nothing against military people, I support them, but they get $20,000 exemption from their State taxes, even the Supreme Court calls this illegal that is not given to all public retirees. I hope they get sued big time by someone and make it fair and equitable to all public employee retirees.

Posted by: Nancy at 09/03/2009 06:23:15 PM

I feel bad for you losing your homestead exemption, Vickie, but my taxes were $3900 on my $135,000 home in Wayne Co., NY on 1/2 acre last year. That is a real ouch! I wish mine were only $1600!

Posted by: Joan at 09/03/2009 07:57:14 PM

How do Puerto Rico and the US Virgin Islands stack up?

Posted by: Ken Gill at 09/04/2009 11:26:50 AM

In Ohio, if they can see it or feel it, smell it, hear it, tast it then they tax it. Not only do you have state tax, but sales taxes, property taxes, estate taxes, city income taxes, school income taxes but not taxes on liberals.

Posted by: Richard at 09/04/2009 10:26:30 PM

We are considering moving to an adult community in Delaware. Is the ovferall tax burden on retirees one of the lowest of all the states? How does it rank?

Posted by: Mori at 09/05/2009 11:33:07 AM

Like the estate tax? Tennessee is your kind of state. Tennessee gets top billing as a "must to AVOID" for retirement. All dividends are taxed as is most interest. Property tax is not cheap and sales tax is about 7-8%. In addition there is a 9% estate tax on all assets above 1M even for assets going to your spouse!. So Bill Gates would pay $0 in Federal estate tax leaving everything to Melanie but in Tennessee he would pay 9% on everything over 1M. Sound good to you...pack up and head to the Volunteer State where you'll get a financial lesson on the volunteer nature of taxation.

Posted by: BILL BIDDLE at 09/05/2009 12:46:08 PM

...NORTH CAROLINA HAS A SALES TAX OF 8.75 PERCENT ONE OF THE HIGHEST IN THE U.S. THE NC INCOME TAX RATES HAVE JUST GONE UP ANOTHER 1 PERCENT SO THESE NUMBERS ARE NOT RIGHT. OVERALL ALL TAXES COMBINED AND NORTH CAROLINA IS ONE OF THE HIGHEST TAXED STATES IN THE U.S.

Posted by: Ken at 09/05/2009 12:55:28 PM

Try living in New Jersey...50'x 125' 2 ba,4br,kith,DR,LR,basement,utility,1car gar...$248k value & $8k in property taxes! Can't wait to LEAVE..!

Posted by: ED at 09/05/2009 01:16:39 PM

I would like to copy this information but you show no print friendly method.

Posted by: FRED GARVIN at 09/05/2009 05:14:38 PM

DO NOT MOVE TO TENNESSEE - I live in Nashville - Sales Tax is 9.25% - Housing costs are INSANE!!!! - worse than Florida - other costs - gasoline/food/etc. are higher than Florida - They also have various other ridiculous taxes like a professional sales tax of $400 per year for professionals (architcts/lawyers/etc.)-finally - the people are friendly - but Tennessee has the sophistication of a back porch barbecaue with your least favorite relatives!!!!

Posted by: Steve in CT at 09/06/2009 12:16:56 PM

After reviewing so many options...we are moving to Delware from Connecticut. Real estate taxes are about 75% less, there is no sale tax, a $12,500 pension exemption, no tax on autos and lower home prices.... along with the 4 seasons and not far from the ocean... makes this a great choice... Bye Connecticut....

Posted by: Ed at 09/07/2009 09:01:23 AM

Check out Pennsylvania. Believe you will find it an excellant retirement haven close to EVERYTHING.

Posted by: Duane Custer at 09/07/2009 10:41:04 PM

Kansas taxes me on my state pension (KPERS) on my paycheck. So they already get the state tax on it. When I retire and IF I stay in KS, the income tax is already paid. It looks like KS is giving state retirees a good deal when they are not.

Posted by: Ralph Gonzalez at 09/07/2009 11:04:33 PM

Those interested in central Mexico retirement possibilities can get valuable info at michoacan_net@yahoogroups.com. Site is run by ex-pats that made the move.

Posted by: Hollis at 09/09/2009 08:23:32 AM

TN has no income tax

Posted by: denise at 09/10/2009 01:18:48 PM

All states collect the amount of money they need. Some use a multifaceted approach trying to balance tax on income, real estate, and sales. Others collect from primarily one revenue stream. So...if you are a high income earner/high net worth individual avoid the states that attack you on income and estate tax. If I had retired in a small inland town in SC (Greenville) I would be paying about 14-20K (7%) in income tax and 2500 in property tax. If I move to Amelia Island, FL I may pay three times the property tax and twice the insurance premium but it won't begin to equal the SC income tax and Amelia Island is a lot more enjoyable to me than Greenville for retirement.

Posted by: Ray Joiner at 09/12/2009 02:03:32 AM

In addition to the tax and cost reasons for not coming to California, we are over-crowded here. I agree with previous comments to stay away if at all possible. This would be a great place with half the current population.

Posted by: Ray at 09/16/2009 11:36:55 PM

Oklahoma is eliminating State income tax on federal pensions at the rate of 20% per year plus $10,000. This year it's 60% plus $10,000. Two more years, nothing. State sales tax is 4 1/2%, property taxes less than half on twice the house compared to Michigan. State Constitution prohibits deficit spending so Oklahoma maintains a substantial "Rainey Da"y fund it builds up during good years to cover the not so good years. Oklahoma is not even on the map as a retirement destition, but is should be.

Posted by: Mike from VA at 09/20/2009 12:26:59 PM

In your retireetaxmap link, the tax info on North Carolina describes a $4,000 exclusion from state tax for state, local, and federal retirees. This information is out of date. Qualifying retirement income for the above is completely excluded from state income tax. Please refer to North Carolina Tax Directive PD-99-01 and subsequent supplements for more information on this.

Posted by: Notehound at 09/20/2009 02:13:35 PM

Denise says: "Amelia Island is a lot more enjoyable to me than Greenville for retirement." I agree with you, Denise. Another reason I pick Amelia Island as my top retirement destination is the fact that it is across the border from Georgia, so I can do some of my shopping (and get gasoline) across the line in Georgia, where the sales taxes and gas taxes are lower. People who live in Washington State and shop in Oregon get the same "border communit"y benefit, I think.

Posted by: HannaB at 09/21/2009 10:15:29 AM

Re check your info on Calif. property tax, we do have prop 13 that helps greatly. The prop tax is 1% plus assessments but is limited to increases as long as you own it.

Posted by: Jason at 09/23/2009 09:25:52 AM

Ever-hungrier, the wolf disguised as a sheepish government bureaucrat takes an ever-greater portion of the sweat of your brow, and delivers high salaries and over-generous pensions to fellow government employees, pays over the odds for union labor so as to garner suppport for their re-elections, and throws money at extravagant projects - all in the name of getting re-elected. Awake, takpayer, and observe your ruling masters as they fleece you.

Posted by: R.A.Mc at 09/23/2009 11:18:29 AM

You need to check your information regarding the Homestead tax exemption in Colorado. Our illustrious governor, Bill Ritter, has just passed a bill eliminating this exemption for seniors. At a time when the economy is in shambles, this was a cruel and unnecessary move, further burdening seniors on fixed incomes. You may be sure he will be out of office come next election!

Posted by: Dave at 09/23/2009 11:26:19 AM

Vin: ...interest and dividend payments are not income?

Posted by: Wyo Woman at 09/23/2009 11:52:17 AM

The state of WY is one of the best for retirement. Small town values, beautiful views, no state income tax, no inheritance tax, low property tax. I can not imagine living anywhere but here!

Posted by: Linda at 09/23/2009 12:25:34 PM

We live in Michigan,and we are not sure if we should stay.My husband will rec his first SS check at the end of this Nov. We will only have SS and his penison from work (from the local PD). What other state should we look at "if" we had to move.. Thankyou

Posted by: Beanship at 09/23/2009 12:41:15 PM

Left out is that Ohio no longer taxes military retirement pensions. However, if you are eligible for the military pension exclusion, you cannot also claim the $200.00 tax reduction for pensions.

Posted by: eric mayus at 09/23/2009 01:09:14 PM

Cna anyone advise me about Puerto Rico as a retirement destination?

Posted by: Alex Demarco at 09/23/2009 02:02:29 PM

I never understood the allure of Florida. Besides having annoying and arrogant northerners everywhere, you also have the dumbest of the dumb from the south...factor in the horrible heat, bugs and humidity in summer, it hardly tempered by a few weeks of nice weather in the winter. Homeowners insurance is ridiculous as is property taxes and the sales tax. I lasted 3.5 years in Tampa area and escaped...but will not mention where! My living costs were halved and it is a very nice "coastal" place...shh....don't even try and find me!

Posted by: Richard Crump at 09/23/2009 02:09:50 PM

You might wish to re-check your comment about North Carolina not taxing Social Security.

Posted by: Tom at 09/23/2009 08:41:18 PM

Linda: Florida is warm, sunny, and friendly. Moved here from the "mitten" a few years ago, I miss my friends, family comes to visit often. No dreary and wet spring and fall days here. Heck its even sunny in January and February. Check out North Central Florida, close to the beachs, aways from the coast and hurricanes.

Posted by: john thoden at 09/24/2009 08:07:21 AM

Fla not what it was when we moved here in 1998,but it beats the period of weather that is about to hit the northeast. Costs are higher than they were then but where are they not? Take the politicians out of the picture and it would be grand retirement place!

Posted by: Will Miller at 09/26/2009 10:16:51 AM

Curious, California is given "bad marks" yet it is the location that my sister settled after "roaming". For whatever reason she's able to live better with all of the negatives, makes one pause and think. Maybe the quality of the life is better, she thinks so.

Posted by: knowphish at 09/26/2009 04:37:58 PM

Ditto what Demarco said. I've lived all over the country, due to my job, and Florida is the WORST!!! If I hadn't met my wife, who's a native Floridian, I'd been gone long ago!!!!

Posted by: Debbie Jordan at 09/27/2009 06:56:00 AM

Illinois has got to be the worst state to live in hands down...I am heading to Delaware!!!!!

Posted by: helen at 09/27/2009 07:28:17 AM

Live in NJ; downsized to a small retirement home; RE taxes are over $9000 on this small abode; taxed to the hilt; weather is "okay"; only reason for staying is family. Otherwise we'd be heading out of this state as others are doing. To those wondering about Mexico, a former co-worker retired to Guadalajara and enjoyed a wonderful retirement until his death. He had a maid who came in three times a week, a gardener who looked after the outside of the beautiful place he had built, a wonderful community of both native Mexicans and Americans from the area--all for less than $600 a month. Other places to consider are areas of Costa Rica, Dominican Republic, Belize, and even Nicaragua. Things are changing and many Americans enjoy living in these countries as well as others in the Caribbean.

Posted by: David at 09/27/2009 11:37:32 AM

For info on retiring outside the US check internationalliving.com

Posted by: Paula at 09/27/2009 04:18:49 PM

Hey Demarco:...Having doubts about transplanting here in FL, from PA, where would you suggest I look? Your coastal place sounds nice. Knowphish, since FL is the worst, where would you move to or go back to? Ready to buy a home but not sure about FL anymore!

Posted by: ron at 09/28/2009 02:12:45 AM

florida has changed for retired seniors on a fixed income for the worse. florida's budget went from $47 to $74 billion from 1999 to 2006. a huge $27 billion increase, all on the backs of property owners. they expanded the government tremendously & tripled & quadrupled our property taxes to pay for it. this has killed real estate, construction & the economy. south florida was the hardest hit by very high property taxes because it has higher valued real estate. if you're going to buy in florida, the property tax will be your biggest bill, along with home owners insurance. a $200K property could pay $4,000 or more in property tax anywhere in florida. a $400K house $8000 in property taxes. more or less multiply the sales price by 2%. florida has the 2nd highest forclosure rates in the country but don't think that they're going to base your property tax on the low forclosure sales price. forclosure sales prices are not taken into account & you'll pay almost the same property tax as the former owner. our huge florida government is running huge deficits & they're going to squeeze every dime out of property owners. home owners insurance is also very, very high especially in south florida. you can pay 2,4,6,10,15,20,30,000 & it's going up. many retired seniors who are on a fixed income are moving out of florida & not retiring to florida. it has become expensive to lve here. the very high property tax & home owners insurance alone has made it impossible for many retired seniors. the politicians in power have blocked every property tax cut proposal, especially the ones for seniors. forida is now in the same boat as california. a huge government, super government spending & super high property taxes...

Posted by: Wendy Davis at 09/28/2009 09:46:10 AM

Florida is the worst. I am going to try North Carolina. Asheville is beautiful, mild winters and low property taxes (outside the city). They do not have an income tax on retirement although they do have a hefty sales tax. Property values are great and affordable. I like the four seasons although not a big winter wonderland fan. So, NC may be the best kept secret. On the east coast, if you would prefer fresh air, mild climate and central location, NC is a great option.

Posted by: sue at 09/29/2009 06:06:55 PM

Ha, Ron, you are complaining about paying $4000 property taxes on a 200k home??? I pay a little over $2700 taxes on a home that is assesed 100% at 123,000 IN NEW YORK STATE...also, I have friends that have a home worth around 225,000(in florida) and only pay about 1200 a year in taxes...

Posted by: Beverly at 10/02/2009 11:37:07 AM

I just have one thing to say about Florida, whatever the price you pay for your home, you get a $25,000.00 exemption right off the price you pay for your home if you are a full time resident of Florida.

Posted by: WIllie at 10/02/2009 01:44:46 PM

Try Texas where that $200k house will pay over $6k in taxes. And no, property values don't ever decrease regardless of the economy. Even if they did, communities would just hike up the tax rate. Bring on a state income tax!!!

Posted by: Phil at 10/04/2009 02:20:42 AM

You failed to mention that Hawaii property taxes are assessed by county. Maui resident homeowners get a $300,000 exemption on assessed value for property tax, and then are taxed at the low rate of 0.2% on the remainder. (for instance, a $1M homeowner would pay about $1400 annual property tax) Plus all qualified pensions are exempt from state income tax. Much better than most states.

Posted by: kevin at 10/07/2009 07:14:42 PM

...i am looking to get out of N.Y. my taxes just went up i am now paying over $3000 IN STATE and federal and over $7000 in school taxes thats right $7000 in school. I NEED OUT. WHERE DO I GO?

Posted by: Charles Romer at 10/07/2009 09:00:15 PM

Retiree real estate taxes in Texas are not that bad. My home is appraised at a little over $200k in suburban Houston and total 2009 RE taxes are less than $3k because Over 65s get a nice exemption. If you prefer to pay income taxes, then Oklahoma has much lower RE taxes but does have an income tax. If your income is at or near poverty levels you might want to retire there.

Posted by: Frank Booth at 10/09/2009 06:01:48 PM

Wyo prop taxes have increased even as prices and sales have dropped in the ritzy northwest leftist peoples republic. 2nd home sales and construction are in a big slump. Building permits seem a little pricey for additions and new. Vehicle ins is reasonable but tags are pricey by county. 09 4-runner tag 1st yr about $750 down to about 50% after 5 years. Make sure to get glass coverage because rock chips are everywhere. They don't use salt or mag-chloride here, and they chip seal roads in summer. If you're an epicurean, good-luck. Even in resort town the FOOD STINKS. Be careful or you'll get sick. Not ONE tepanyaki restaurant. Lots of bbq and day-old lettuce. But you gotta love the low tax burden. 4wd required. Come on up, we can use the company! Low crime is an added bonus: no shootings but lock your car to keep wayward juveniles out.

Posted by: Dan Fischbach at 10/15/2009 10:08:26 AM

The Oregon info is incomplete. In 1989 I was paying $480 PER MONTH ($5760 per year) in property tax on a house I couldn't sell for loan value which was about 135K. Oregon has to be one of the worst places to retire if you plan to own a home. This was Multnomah County which includes Portland. Retirees considering moving should be aware Oregon not only has the highest income tax, it also has one of the highest property taxes. The "property tax set by county is a dodge...

Posted by: Topretirements.com at 10/17/2009 09:43:59 AM

We agree with the statement that "Property taxes can be a bigger concern". Since people in retirement tend not to make much money or spend it, income and sales taxes are usually less important. Generalizations about states should be viewed with caution, as property taxes can vary quite a bit within a given state. Investigate the property taxes in the town you are considering before you buy, and pay attention to the trend.

Posted by: E. S. Altevogt at 10/27/2009 01:53:50 PM

I would like to see Kipplinger add propery insurance rates as one of their meaasures for what makes a state affordable for retirement. Property insurance rates here in Florida have skyrocketed and in many cases have a greater impact on a retiree's budget and quality of life than the sales tax percentage. Many retirees here in Florida are leaving Florida for other states because they can no longer afford to live in their homes because of the combination of high property taxes and high property insurance rates. When you combine the facts that "declining" property taxes are not keeping par with declining home prices and fewer number of insurers will even insure homes here in Florida and high rates- the result is a scenario where retirees are being forced to move from their homes because they can no longer afford to keep them. These high insurance rates affect not only waterfront residences in coastal counties, but residences...near the water. The Homestead Exemption for Seniors on property taxes and percentage caps on Homesteaded and 2nd homes don't help seniors much when offset with higher costs to insure their residences. Our own property insurance is over 20% HIGHER than our property taxes, reulting in a monthly escrow bill that is higher than out principal and interest combined, and we are not even in a zone that requires flood insurance and don't carry it. The high property insurance seniors pay truly impacts how far their retirement dollar actually goes here in Florida. I'd bet a closer review of other coastal states, as well as inland states prone to severe weather, like tornadoes and floodinng, would yield some interesting results and would impact the affordability of retiring in many states.

Posted by: Rafa at 10/30/2009 12:45:31 PM

Answer to where in the central highlands of Mexico to retire. We retired to Queretaro with many free cultural and music events, a symphony orchestra, several universities, a lively night life. Families crowd the central plazas at night. My wife has a maid at $20USD for a 7 hour day. An hour asway is San Miguel de Alliende where about one-fifth of the population is American with an American library, American consulate, and an active social life among Americans. We are 9 hours fast drive down 4 lane divided toll roads to the US border..

Posted by: david at 10/30/2009 07:47:13 PM

wyoming is great and very tax friendly too bad its so cold and windy and the food is awful.

Posted by: coups at 11/02/2009 08:57:29 AM

Moved to N.C (mountains) from Chicago. Thought it would be cheaper. HA! No WAY!! NC is hell expensive with taxes on everything! You snowbirds moving out here are nuts! They freak and close the state down with two inches of snow. Prices are insane here, lots of heating oil (you're held at gun point for your $$) homes so the cost of winter fuel is horrible! Floridians all over the place! Sounds to me like Delaware is an option! Alaska really sounds excellent! If you like lots of taxes and -oh yes! occasional police road blocks "just to check your D.L" you'll like it here. I'm moving after being here too long. I love the people but it's toooo expensive here in NC!! You'd best get used to living and breathing Duke and NC Chapel Hill basketball!

Posted by: bigolbose at 11/02/2009 05:11:07 PM

Why do so many people wish to live where the weather is terrible, the food choices are limited, and there's not much to do just to save on taxes? I don't get it.

Posted by: Mandy at 11/02/2009 06:54:46 PM

HI all. I live in northern Florida and agree with many comments regarding the heat, humidity, bugs and expenses. The property taxes & homeowners ins on my little house are twice as high as my son's house in NC, which is 2.5 x larger than mine. I am making plans to relo to either Mexico or Ecuador in 2 years. My husband & I planned a Hawaiian retirement but his death last year makes that impossible. We would have had a great life on 2 pensions and 2 social security checks, but not on one. SSA is not giving us a COLA this year and being at their mercy, I am afraid to remain in the US as the inflation that is coming is going to really hurt those of us on fixed incomes. Taxes, utilities, food etc are going to increase exponentially faster then our pensions. I will be in a cottage on the beach sipping a margarita. Y'all can come visit anytime!

Posted by: Robert DeVere at 11/05/2009 06:34:48 PM

I have a couple of years yet before I retire from federal civil service under FERS. When I do, my total income will be from my pension, Social Security, and IRA. I own property in Vermont, which I intend to keep but not live in year-round. So my focus is perhaps different from most of the posted comments. I'll pay the onorous Vermont property tax regarless, but if I can find a permanent retirement residence that doesn't tax my income stream AND ALSO does not kill me in Estate or inheritance taxes (pun intended) I could probably live there happily. I've found that people are pretty decent all over our country. Even out of it. I'd like to avoid those Vermont Winters if I can--they would either kill me themselves or keep me vital. I'd rather not find out which.

Posted by: Donna at 11/06/2009 12:07:46 AM

I live in Texas and know the Harris Co. area gives about $160,000 exemption to those over 65. Some school districts and cities within Harris Co. also give substantial exemptions and sometimes freeze property taxes to 65 and over. It varies from county to county. We retired to Nacogdoches, TX in the eastern part of TX which is probably TX best kept secret. It's the only area where dogwoods grow. We don't have the fall color of NC but we have a lot of forest here with oak, elm, red maples, etc., much like the Carolinas. We have 3 acres, brick house about 2100 sq.ft surrounded by woods, deer, many different birds, outside the city so no city tax, county and school is now frozen at $2300 a year on a value of $200,000, no state income tax, sales tax is 8.25%. We have a 4 yr. university with an excellent Fine Arts Dept., a nice size art gallery, plays, concerts, an arboretum, native plant center, and bike and hike trails now being built in 22 acres of woods. Am 5 miles from it all. Only drawback can be lack of huge shopping malls like in Houston or Dallas but Tyler and Shreveport LA are 90 miles away. Interstate 20 is 90 miles north. Houston is 150 miles south. It's quiet and people friendly, no congestion. Fall, Winter, and Spring are great....summers can hot. Azaleas bloom here mid March to April 1. May is nice, June begins the heat wave. Population was about 30,000 in 2000. Home prices are cheaper than where we were in OH, about the same as Houston area but more land here. Homes are usually individually built, so all different. Trees are definitely beautiful here.

Posted by: Terry at 11/08/2009 08:53:19 PM

Does anyone know if you retire in one state is that the state you have to file state income tax in?

Posted by: Ralph Ekberg at 11/17/2009 01:53:02 PM

...I would like to compare retirement States in all tax catagories (property, sales, income,etc.) to help make a decision on where to retire. In our case it's the Carolinas versus Florida. Is such a service available?

Posted by: Doug Harbrecht at 11/17/2009 11:35:44 PM

Hi Mr. Ekberg, Doug Harbrecht with Kiplinger's here in response to your inquiry. We don't have a direct comparison, but you can compare the tax data from Florida with both North and South Carolina to get an idea which state would be best for you. The detailed data we provide covers all facets of taxation for retirees in each state--state and local income taxes, personal property taxes, sales taxes, etc. Everyone's tax circumstance is a little different, so the only way you determine which is best for you is to compare each state you're considering. Hope this helps. And thanks for your interest.

Posted by: Don at 11/19/2009 08:41:34 AM

To Ralph Ekberg, if you search in your browser , states with lowest overall tax burden, you will come up with thousands of lists that show what the averages are for various income levels.

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