Once you’ve concluded your working years and are ready to retire, you must still deal with income taxes. Depending upon how you structured your retirement plans, some of your income might not be taxed. But surprisingly, Social Security benefits can be taxed, depending upon your income. That rule is true for both federal and state taxes.
Many states do tax Social Security benefits, but some do not. It’s no wonder this often becomes a consideration for retirees. If you’re considering a relocation in retirement, you would be wise to investigate the tax rules for any state that you’re considering, because state income taxes can actually vary quite a bit from one to another.
A few states don’t impose a state income tax at all. But of those that do, here are the ones that don’t tax Social Security benefits at all:
- New Jersey
- North Carolina
- New Hampshire
- South Dakota
Do remember that property tax and sales tax can vary quite a bit from one state to another. Just because a state does not impose an income tax, or at least does not tax Social Security benefits, does not mean it is necessarily a “low tax” state overall. Do your research carefully, so that you can choose a retirement destination that most benefits your particular situation.
As you continue to plan for retirement, we can help. Schedule an appointment with us, and we can help you plan around income taxes, your retirement destination, and all of the other factors that contribute to a happy and successful retirement.