5. Arkansas: very tax-friendly
Arkansas exempts Social Security benefits and up to $6,000 of retirement income from its state income tax. Another favorable aspect for veterans is that all military pension income is tax-exempt. How friendly is that?
- The State Income Tax Range is 2% on taxable income from $4,500 to $8,899 for people with net income less than $22,200; 0.75% on the first $4,499 of taxable income for taxpayers with net income from $22,200 to $79,300;
- The Average Combined State and Local Sales Tax Rate is around 9.48%;
- The Median Property Tax Rate is $612/$100,000 of assessed home value;
- No Estate Tax or Inheritance Tax.
6.California: tax-friendly
California can be easily difficult in matters of taxes on seniors. Also, California doesn’t tax Social Security income, but most other forms of retirement income are fair.
- The State Income Tax Range is 1%(on up to $17,864 of taxable income for married joint filers and up to $8,932 for the single filers) to 13.3%(on more than $1,198,024 for married joint filers and $1 million for the single ones);
- The Average Combined State and Local Sales Tax Rate is 8.82%
- Median Property Tax Rate is $729/$100,000 of assessed home value.
- There are no taxes on estate or inheritance.
7.Colorado: tax-friendly
You might want to consider the Centennial State for your retirement. Apart from the beauty of living at the feet of the mountains, you can also benefit from a generous retirement-income exclusion from state taxes, if you’re 55 or older.
- The State Income Tax Range is 4.55%;
- The Average Combined State and Local Sales Tax Rate is 7.72%
- The Median Property Tax Rate is $494/$100,000 of assessed home value
- No Estate Tax or Inheritance Tax
8.Connecticut: NOT tax-friendly
Connecticut is a tax nightmare when it comes to retirement, so you’d better reconsider moving there. It has the third-highest median property tax rate in the U.S., and it also imposes an estate tax and a gift tax(the only one that does that).
- The State Income Tax Range is 3%(on up to $20,000 of taxable income for married couples and up to $10,000 for single people)- 6.99%( on the amount over $1 million for married filers and $500,000 for the single filers);
- The Average Combined State and Local Sales Tax Rate is 6.35%;
- The Median Property Tax Rate is $2,139/$100,000 of assessed home value;
- It has Estate Tax, but no Inheritance Tax
