No matter where you retire, you'll owe the same to Uncle Sam in federal taxes. But your choice of retirement destination could have a significant impact on what you'll owe in state taxes. State tax burdens vary widely across the U.S.
Where will you retire? Will it be beaches versus mountains, north versus south, or cool versus warm? As long as you are staying in the States, your choice of location is more than a choice of geography.
Each state is different when it comes to the legal and tax environment a retiree or estate planner will face. Virginia repealed its estate tax year ago so its both a great place to live and die in!
A recent Kiplinger article titled “States Differ on Retiree Tax Burden” is well worth your read. Furthermore, you will want to save it to your “reading file” for future reference Remember, you are planning for that special place where you intend to spend your golden years. That means you will need to consider the effect of location on both your retirement and your estate.
The Kiplinger article provides a state-by-state run down on the tax basics and a colorful map to guide you. Each state offers various perks and challenges to the retirees that are well worth investigating and understanding.
Since choosing your retirement location is one of those significant life events, you should follow the carpenter’s rule of thumb: measure twice and cut once.
You can learn more about this topic as well as other strategies on our website under
the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Kiplinger (September 2013) “States Differ on Retiree Tax Burden”