10 Best States for Taxes on Retirees

Retirees have special concerns when evaluating state tax policies: Are Social Security benefits taxed? Does the state impose its own estate tax? Are there property tax breaks for seniors? The answers can greatly affect the financial well-being of someone living on a fixed income.

These 10 states impose the lowest taxes on retirees, according to Kiplinger’s 2015 analysis of state taxes. All of them exempt Social Security benefits from state taxes. Most exempt at least a portion of other retirement income, such as pensions and withdrawals from tax-deferred retirement plans. (To see how retirement income is taxed by state, go to the Retiree Tax Map.)

Before packing your bags and moving to a state with no income tax, though, pay attention to the trade-offs. Some states with no income tax impose above-average sales taxes or tax a broader array of goods and services. Property taxes may be higher, too. Take a look.

SOURCES: State tax departments, CCH and the Tax Foundation

Read more at http://www.kiplinger.com/slideshow/retirement/T055-S001-top-10-tax-friendly-states-for-retirees/index.html#DHO7AcVMQzdYIHuK.99