Wednesday, June 22, 2011

Kiplinger's: Oklahoma A Top Retiree-Friendly State

From Kiplinger's Personal Finance ~ Every year, thousands of Americans search for a “tax-friendly destination” where they can enjoy retirement without worrying about financial constraints.

Federal taxes will be about the same no matter where you live, but state and local tax burdens can vary greatly, especially if you’re retired.

Today, Kiplinger’s Personal Finance launches an exclusive interactive map to point you to the states that will take the smallest—and biggest—bites out of your assets in retirement.

Which states impose their own estate taxes? Which nine states have no income tax? What are the most pension-friendly states? Find out the answers to these questions and more at

10 Most Tax-Friendly States for Retirees · Wyoming – Wyoming is a tax haven for cowboys and retirees alike. There is no state income tax. · Oklahoma – Oklahoma does not tax Social Security benefits or Civil Service Retirement system retirement benefits for those who receive a federal pension in lieu of Social Security. · Louisiana – Louisiana offers a bayou full of tax breaks to retirees. Social Security, military, civil-service, and state- and local-government pensions are exempt from state income taxes. · Mississippi – Mississippi offers a sweet income-tax deal for retirees. It not only exempts Social Security benefits from state income taxes, but it also excludes all qualified retirement income from state income taxes. · Alabama – Alabama is very tax-friendly to retirees. Most retirement income is exempt from state income taxes. · Georgia – Georgia is a peachy tax environment for retirees. Social Security income is exempt, and so is up to $35,000 of most types of retirement income. · South Carolina – South Carolina extends its Southern hospitality to retirees. The Palmetto State exempts Social Security benefits from state income taxes, and it allows residents 65 and older to deduct up to $15,000 per person ($30,000 per couple) of qualified retirement income when calculating their state income tax. · Kentucky – Kentucky exempts Social Security benefits from state income taxes plus up to $41,110 per person of a wide variety of retirement income, including public and private pensions and annuities. · Pennsylvania – Pennsylvania shows its Quaker roots and extends a friendly hand to retirees. It is one of the most generous states in the nation when it comes to offering income-tax exclusion on a wide variety of retirement income. · Delaware – Delaware is one of the tax-friendliest states for retirees. It has no sales tax. Its income-tax rates are modest. Social Security benefits are exempt.

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