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Do most people when picking retirement locations consider whether or not the state has an income tax. I have a federal pension but I am not old enough yet for social security. So I would assume I would not get a deduction age wise at tax time until I was of age.
I have found information on this subject, but really not enough to get a complete picture of how one is taxed state to state. Is it really that much of a tax burden on a pension from state to state when there is an income tax?
For anyone that receives a retirement and relocated. Was the lack of an income tax part of the criteria for where you retired.
Location: Prescott Valley,az summer/east valley Az winter
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Originally Posted by Jimrob1
Do most people when picking retirement locations consider whether or not the state has an income tax. I have a federal pension but I am not old enough yet for social security. So I would assume I would not get a deduction age wise at tax time until I was of age.
I have found information on this subject, but really not enough to get a complete picture of how one is taxed state to state. Is it really that much of a tax burden on a pension from state to state when there is an income tax?
For anyone that receives a retirement and relocated. Was the lack of an income tax part of the criteria for where you retired.
It's definitely a consideration, but only one factor out of many... for example: real estate tax rate, personal property tax, sales tax rate, over-all cost of living, real estate prices, crime rate, climate, walkability, recreation areas, etc. etc.
I bought a book about tax heavens and hells, which analyzes the total tax burden all over the country for different house values and income. They are all over the place and it really takes some digging to find out all the areas they will bleed you dry.
Thanks for all the inputs. No tax on my pension is definitely part of my criteria for my retirement location. I found with the popular sunbelt states Fla, Tenn, Texas are the only ones that don't have income tax so that is safe there. The rest of the southern states except Ala tax pensions. In the west Colorado gives a nice exemption on most of the pension. California, Arizona and New Mexico tax it. Its no wonder besides the warm weather in Florida, no income tax has been a draw to that state for decades now. I know the migration by retirees to Fla has slow downed some, but Im sure for some no tax is still part of the draw.
you have to look at all taxes to really tell. some states like florida have a reputation of having no state tax but when all is said and done they seem to be right in there with the higher tax states as everything else they can get to gets taxed
Personally, taxes will be a consideration in where we move, assuming the market recovers and we can sell the house we're in!
When I first started planning for retirement, I think I concentrated too much on income tax and not enough on the total tax burden. It's really important to look at the big picture.
Generally speaking, there are two types of states where you can avoid state income tax on your federal pension. The first type is a state that has no state income tax, and the second type is a state that does not tax your federal pension. We're looking to retire to the northeast (can't stand the heat, and I'm originally from Boston). New Hampshire doesn't have a state income tax (for the most part), but New York and Massachusetts don't tax federal annuities. It's possible that we would do better in NY or MA than we would in NH, since to make up some of the money they lose in state income tax, NH generally has high property tax.
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