10 of the worst states for retirees

New York: 8.49% sales tax

Topping the list is the great Empire State. The trouble with this is that everything costs more and not by a little. In Manhattan, you will find the highest cost of living than any other city in the U.S. The average apartment there costs $3,984, 4 times the national average. Everyday activities commonly cost more too, like bowling or a haircut. Another huge burden on retirees are the high tax rates. New York has the highest state and local tax burden of any other nation. It sits at 12.7% which is much higher than the national average of 9.5%.

http://www.osc.state.ny.us/retire/

California: 8.48% sales tax

The Golden State is among the worst for retirement security because of low retirement income scores and high retiree cost scores. The state’s 8.5 percent unemployment rate for workers over age 55 is the second worst in the country (after Nevada).

https://www.calpers.ca.gov/

Minnesota: 7.27% sales tax

This state full of lakes is commonly on the list of the least tax-friendly states for retirees. The state seems to tax everything they possibly can, including social security benefits. Although the average household income for people who are 65 and older is beneath the thresholds for the highest tax bracket, the cost of living in Minnesota is far above the national average. Lifetime health care and median home value for people 65 and older are higher than the national average.

https://www.msrs.state.mn.us/

New Jersey: 7% sales tax

The Garden State is a very popular place for retirees although almost half of it’s residents age 55 and older spend more than 30% of their income on housing costs. This is the highest rate of any state. New Jersey is among the worst states for taxes due to its high income, sales and property tax rates.

http://www.state.nj.us/treasury/pensions/

Nebraska: 6.87% sales tax

Although Nebraska recently stopped taxing Social Security benefits they continue to tax most other retirement income, including withdrawals and public and private pensions. The state’s top income-tax rate applies to taxable income above $29,590 for single filers and $59,180 for joint filers. The median property tax on the median home value ($133,800) is $2,474. This is the seventh-highest property-tax rate in the U.S. The state’s inheritance tax is a local tax that rangers from 1% to 18% and is administered by counties.

http://npers.ne.gov/SelfService/

Utah: 6.69% sales tax

Utah does not offer many tax breaks for retirees. Incomes from IRAs, 401 (k)s, pensions and Social Security benefits are taxable at the 5% flat tax rate. They do offer a retirement-income tax credit of a maximum of $450 per person and $900 for a married couple. This credit is phased out at 2.5 cents per dollar of a person’s modified gross income. One positive is that property taxes are modest. The median property tax on a median home valued at $223, 200 is $1,480, which is the 11th lowest in the U.S.

https://www.urs.org/

Connecticut: 6.35% sales tax

Although this beautiful state offers a very appealing lifestyle with the scenery and attractions, Connecticut is a very expensive place to live when taking into consideration of property and sales tax. The average home in Stamford costs $626,189 which is double the national average. Your coffee and other everyday things will cost as much as 23% more than the U.S. average. Gas is almost 4% higher than the national average so I hope you plan to stay if you end up in Connecticut.

http://www.osc.ct.gov/empret/

Vermont: 6.17% sales tax

The beautiful green mountain state does not favor retirees. Almost all retirement income is taxed and as much as 85% of your benefits could be taxed. Vermont limits deductions to $15,000 for singles and $31,500 for married couples. If your income is $1 million then you would be paying about $5,000 in state taxes every year. Local jurisdictions can add 1% to the state sales tax. Tax on restaurant meals and lodging is 9%, and 10% if you order a glass of wine or beer while you’re there. The median property tax on the state’s median home value of $214,600 is $3,797, the eighth-highest in the U.S.

http://www.vermonttreasurer.gov/retirement/state-vsrs

Montana: No sales tax

Even though you will not have to pay sales tax in this gorgeous state you won’t be thinking about that when you receive your state tax bill. Montana taxes almost all of your retirement income and it’s 6.9% top rate starts when your income exceeds only $17,400. The property tax rate will brighten your mood a little when you find out that the median property tax on the median home ($196,800) is $1,653 which is below the average for the U.S.

http://mpera.mt.gov/pers.shtml

Oregon: No sales tax

Oregon has appealing qualities for those who love the city but also have a passion for nature. Portland is a popular place for coffee shops and craft breweries. If you are craving the great outdoors you can visit Mount Hood and the rugged coastline. The major downside of this beautiful place is the high cost of living. Apartment rent in Portland averages $2,211 per month which is more than double the national average. Oregon also has high taxes. Oregon’s top personal income tax rate is 9.9% which puts it at the 3rd highest in the country.    

http://www.oregon.gov/PERS/Pages/index.aspx