The issue of income tax planning has long been a problem for many Americans and more so for retirees. After working for a major part of their lives, prospective retirees would like to ensure that they get the most out of every dollar they saved for their retirement. In her article “Retirement Relocation: State Taxes Matter More Than You Might Think” Rebecca Barsch observes that states with minimal or no income taxes are proving to be popular destinations for many retirees. One of the cases highlighted in the article is the high migration rate to Florida which has long been a popular destination for retirees. The article highlights the high growth rates of many metropolitan areas mainly due to retiree migration. The common link between these states as provided in the article is the absence of state income taxes. The issue of taxation and the financial toll that inadequate tax planning may have on a potential retiring couple are also highlighted in the article. It highlights the cost that such a couple may face by considering the combined income, sales and property taxes. Finally, the article links geographical localities to tax savings or losses depending on the selected choices. …show more content…
There are several states in the US that do not currently impose income taxes. This means that retirement funds regardless to their source of origin will not be subject to any state income tax. Taxes can be a big burden especially when effective planning is not carried out. Choosing the right location to retire is vital in retirement planning especially when state taxes are factored in. The combined tax toll on a potential couple may be north of $7500 annually.
How Geographical Location and Tax planning may impact