Sometimes it pays to shop around when deciding which state you want to live in during retirement — particularly when it comes to how hefty the tax bill will be.
That was the case for one couple who decided to sell their Fort Lauderdale home and relocate to the Atlanta area, recalled Thomas W. Balcom, founder at 1650 Wealth Management.
The move to a similar-sized house reduced the couple's property tax bill from $20,000 per year to about $5,000, due to the fact that they did not have to pay taxes for schools in Georgia. In addition, the first $130,000 of the couple's retirement income from pensions or investments was exempt from taxes in their new state, as well as their Social Security income.
Florida is a popular retirement destination in part because it has no tax on individual income. Other states with no individual income tax include Alaska, Nevada, South Dakota, Texas, Washington and Wyoming. New Hampshire and Tennessee charge income taxes only on dividends and interest.
This map from Kiplinger shows which states are considered most and least friendly when it comes to taxes. (Click to enlarge.)