Planning for retirement based on state's taxes?

[KO896]

My husband will be retiring in about 9 years. We started talking about where we want to live our last years, and one thing that comes up is taxes and how each state is different for how our investments are taxed. Where we live now, we get taxed putting money into our investments and so we need to consider whether we retire to a state where that money coming out will get taxed...meaning we'll be taxed twice from two different states for our hard-earned money. So this is a big decision to make on where we'll live.

Does something like this tax stuff effect where you live or where you will live for retirement?

 

[MrDawn]

I hear that when a lot of people retire, they move to Florida for tax reasons.

 

[DrLeftover]

If taxes are a consideration, NOBODY would move to Illinois.

This state has outrageous sales tax on Everything, including FOOD in the grocery store. The property tax will make your eyes bleed. And the cost of fees and permits will give you intestinal cramps.

And we knew that ten years ago.

But a family obligation forced us to move here, and now... we're stuck for at least the next few years.

so it goes



No. I am not kidding about the tax on food:

Illinois' general state retailers' occupation and use tax rates are:

• 6.25 percent on general merchandise, including items required to be titled or registered by an agency of Illinois state government; and
• 1 percent on qualifying foods, drugs, and medical appliances.

Note: Public Act (P.A.) 102-0700 suspends the state 1% low rate of retailers’ occupation and use tax on retail sales of groceries normally taxed at this rate from July 1, 2022, through June 30, 2023.

The sales tax rate is higher in some areas because certain local jurisdictions are allowed to impose their own taxes that are combined with the state sales tax rate. When local tax rates change, the change generally occurs on either January 1 or July 1. See also: “What local taxes may be imposed in addition to Illinois sales tax?”

Answer

If you have additional inquiries, you may submit them on the Questions, Comments, or Requests form.

tax.illinois.gov

 

[Black Angel]

Pretty sure my husband and I might end up in a foreign country where we speak the language as fluently as we speak English.

 

[Mendalla]

Here in the Great White North, taxation is mostly Federal and most provinces just tag on to what the Feds do so taxation of investments is pretty uniform across the country (save in Quebec which runs its own tax system). So if we move, it would be for other reasons. That said, there is tax planning and strategies for minimizing tax that we do look at.

 

[Webster]

I hear that when a lot of people retire, they move to Florida for tax reasons.

And Texas and Tennessee....