Today we are talking about states with no income tax. One question we hear a lot, especially as clients are getting closer to retirement, is, “Where should I look to relocate?” Many are thinking I don’t want to live in a cold area. I don’t want to deal with snow. I want to move somewhere warm. But does that make sense from a tax perspective? From a financial perspective? Will my money last? And how do I make it last the longest? Maybe you have thought about some of these questions as well as you are nearing retirement.
So this is really an exercise, just to show you what states don’t have an income tax. There are actually seven (with a total of nine that tax in a separate way).
Seven don’t have any type of personal income tax.
Those states are Alaska, Washington, Nevada, South Dakota, Wyoming, Texas, Tennessee, Florida, and New Hampshire. So I said seven, but I actually wrote nine.
Because there are two states, Tennessee and New Hampshire, that don’t have any income tax, but they have an investment tax. As you have interest and dividends, they’ll tax a portion of that. But all of these collectively don’t have any personal income tax.
So if you have wages, if you have retirement income, investment income, in some of these states you’re not paying a tax on the state level. You will still be taxed at the Federal level though.
So if moving to a different state makes sense to you as you are nearing retirement, consider this in your evaluation.
There are so many things to consider and questions you may have as you near retirement. And as always if you have any questions about your financial plan or getting one started please reach out to us we would love to help you get started!
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It’s time to do a really quick check of your beneficiaries. This is something that is really easily overlooked. I want to review some of the common accounts where you need to set a beneficiary because this is what states who inherits the funds that are in these accounts.
Steve enjoys getting to know clients and hear their unique stories and the lessons learned which has brought them where they are today.
One of the reasons he enjoys what he does is the ability to show the outcome that can be achieved with different choices. He also enjoys continually learning.