Are you ready to start life after your career? Or, maybe retirement is still a ways down the road, but you realize it’s never too early to start planning for the future. At some point, most people decide to stop working and enjoy the golden years. Exactly when that happens will differ from person to person, depending on their specific circumstances. However, no matter what kind of career you’ve chosen or when you retire, taxes will play a role in how much your nest egg is affected. In other words, the IRS is going to be dipping its hands in the cookie jar no matter what. However, there are some factors that will play a key role in how much the agency gets to take and how much you get to keep.
Location, Location, Location
There are many different components that affect your retirement income, including how much you saved, how you saved it and where you saved it. In fact, when it comes to location, not only does it matter where you keep your money, but also where you physically live. There are several factors that will help determine your tax bill depending on which state you call home and it’s not just your income taxes. For example, how bad are the property taxes where you live? What kind of property tax breaks, if any, are there for seniors? Does you state tax Social Security benefits and will there be an estate tax when you’re gone? These are all important things to consider when you decide where to live after you retire.
You Might Want to Live Here
To that end, there are definitely some states that are better for taxes in retirement than others. In fact, the best states all exempt Social Security benefits and most of them also exempt at least a part of other retirement funds. The top 10 tax-friendly states for retirement, according to Kiplinger’s 2016 analysis are: