3 Worst States for Taxes Everyone Should Know Before RetirementMarch 5, 2017 / by Emily Chambers
When a person nears retirement, he or she often starts hunting up the best places to retire. The most common criterion for choosing a place is the tax laws of the state. If the taxes are more, a person usually avoids that state and seeks a place where the taxes are lower. Kiplinger recently prepared a list of top 50 places to retire in the U.S. Here the worst three states are mentioned.
Where not to live after Retirement?
The study done by Kiplinger recently has created a list of all the 50 states in order of their preference that would be preferred by a retiree. The tax laws of all the states played a key role in assigning them a position in the list. States that have lower taxes gained a better position and states that have higher taxes were low on the list. The worst states for retirement are New York, New Jersey, and California. Another key factor that was used rank states are the health care facilities. Some other factors like the cost of living were also used.
The Last Option
The worst state to retire according to the Kiplinger list is New York as the living expenses are 29 percent above the national average. A sad fact is that the state is so expensive, the percentage of residents over the age of 65 and living in poverty is above average.
The Second Last Option
The runner-up is the state of New Jersey where the tax policies are tough on the retirees. The state sales tax is 7 percent and the local property taxes are also too high. When one combines the local tax and state tax burden, the result is second highest in the country.
The Third Last Option
The 3rd worst state for retirement is California. The state has expensive housing and the taxes are enough to put a dent in the retirement nest egg of a person. Most parts of the retirement income of a person are taxable. The income tax rates of the state are highest in the country.
It seems that the people who are nearing retirement would be smart to stay away from these three places when they are looking for a new home and new beginnings. After all, what’s the benefit of moving into a new place when one has to pay so many taxes?