10 Most Tax-Friendly States For Retired Taxpayers

6th Best: Colorado

The downside: Similar to South Carolina, the average combined state and local sales tax rate is 7.72%, with groceries and prescription drugs exempt from sales taxes. Up to $24,000 in Social Security benefits or other retirement income is not taxable in the case of Colorado seniors aged 65 and more. Anything else exceeding the threshold is subject to taxes.

Why it’s still a good place to move: If the fresh, mountain air is not a good enough incentive, let’s also add the extremely low property taxes. The median is somewhere at $494 per $100,000 in home value and seniors also have access to a variety of programs that can help them save on taxes even more. This includes a 50% exemption on the first $200,000 in value for residents living in Colorado for a long time.

Read also: 26 States That Do Not Tax Your Social Security Benefits

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