Even if you don’t pay state taxes, keep in mind that federal taxes may still be due on retirement income.
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During retirement, taxes can become one of the most significant expenses for retirees, and this can vary depending on where you live. Some regions offer tax advantages to retirees, as is the case of 9 states that do not tax this type of income.
The nine states that do not have retirement income taxes are:
1. Alaska
2. Florida
3.Snowfall
4.South Dakota
5.Tennessee
6.Texas
7.Washington
8.Wyoming
9.New Hampshire
Although New Hampshire does not have a retirement income tax, it will tax interest and dividends, which can be a significant part of the income streams of many retirees.
However, if all of your interest and dividends are earned through retirement accounts, then you still may not have to pay New Hampshire state income tax on this income, as explained in Forbes.
It is important to note that tax planning is a key aspect to consider even after retirement, although it is not recommended to base the decision to retire solely on the intention of reducing the tax burden.
You should also keep in mind that federal taxes may still be due on pension income during retirement.. In addition, there are other ways in which you can have tax obligations at the state level, such as in the payment of property or sales taxes.
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