Is the cold weather making you think it is time to retire to a warmer climate, or do you want to retire right here in Delaware and continue to enjoy the changing seasons? Which state is best for you to retire in? There are tax regulations unique to each state that can impact retirees. An overall analysis of income tax, sales tax, property tax and other retiree tax rates for states that you may be interested in retiring to can be critical to your financial planning and decision making.
Some retired taxpayers spend time between two or more states when they have a vacation home in another state. It may make sense to determine if residency can be established in a “vacation home” state for tax purposes, especially if the state has no income tax, like Florida, Washington or Texas. Our home state of Delaware has no sales tax, and some of the lowest relative property taxes in the country. Our neighbor, Pennsylvania is one of two states in the country that exempt all retirement income, including IRA and 401(k) distributions.
With so many factors to consider, it is best to consult with a CPA, so you can make the best decision for yourself and your future. Let Bumpers & Company help you determine which retirement state would provide you with the most benefit for tax purposes.