Best Retirement States

It is true that seniors prefer the warm climate and leisure activities of states such as Florida and Texas, they are not necessarily the best retirement states where income is concerned. 

Many retirees judge the suitability of a state based on an oversimplified view of the state tax laws. This is an oversimplified way to judge the tax burden of a state Some of the states that have no income tax are actually among the most expensive tax wise in the United States.

Retirees naturally seek to preserve as much of their money each year as possible, and many are drawn to states like Pennsylvania that do not charge anything on retirement income. Although this is an understandable reaction, failure to look closer can cost these seniors a great deal of money. Ironically, Pennsylvania is actually one of the least affordable places in the United States to live. The average property tax in Harrisburg, PA, amounted to an unbelievable $6,551. Combine that with $840 on average in sales tax, and Pennsylvania residents are really paying approximately $7,391 in taxes per year.

Surprisingly, states like Arkansas and Delaware are actually the most cost effective for seniors. Living in Dover, DE, costs on average around $543 per year in taxes. Kentucky is another affordable state for seniors, with residents of Frankfort paying around $1,114 per year. This is much less than supposedly tax friendly states such as Pennsylvania and Florida. Residents of Florida pay around $3,424 per year.

Despite the importance of tax income, it is very important to research the other factors at play. Be sure to research the cost of homes, as well as cost of living. In areas with high property values, property tax can eat up a great deal of income each year. Look out for potential money sinks by researching state tax laws before making a move. The general livability of a state is also important.

Resources such as Kiplinger and Taxsites.com 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 move there, but don't neglect to check out a state's tax laws before moving. Some states, such as Pennsylvania, can make your retirement dream unaffordable if you are not careful.