Five Tax Friendly States and Private Communities for Retirees
Everyone from economists and accountants to hedge fund managers and financial planners have levied predictions about the impact of the recent Presidential and Congressional elections on taxes. The predictions range from nominal to seismic, depending on the source and the current events of the day.
But those considering retirement in 2021 can take comfort in the fact that there are several states that offer myriad of tax benefits for all residents, in general, and retirees, specifically. Here's a look at five tax-friendly states and private communities that will leave ample disposable income for living the good life.
The Sunshine State has historically been a haven for retirees, but it's not just the beautiful beaches and balmy winter weather that attracts those entering the third act. Florida doesn't levy state income tax, so if you opt to work part-time you'll keep more of your money. There's no tax on Social Security benefits or pension income, the average property tax was $2,035 statewide in 2019 and sales tax is a reasonable 6%. It's of little wonder that tens of thousands of people are still moving to Florida each year.
Community Spotlight: Cresswind Lakewood Ranch - The master planned Lakewood Ranch area of Sarasota is exploding with new restaurants, retail shops, residences and Cresswind Lakewood Ranch is conveniently located in the heart of it all. This new, 55+ community will feature 648 homes at build-out, ranging from two to five bedrooms. Amenities will include tennis and pickleball courts, a resort swimming pool, fitness center and more. Vibrant downtown Sarasota is only minutes away, as are pristine Gulf beaches.
2. South Carolina
It's no secret that the Palmetto State bends over backwards to attract retirees to its diverse landscape of mountains, midlands and coastal regions. While the state does tax income, Social Security benefits are completely exempt, and taxpayers age 65 and over can exclude up to $10,000 of retirement income. What's more, seniors can deduct $15,000 of other taxable income, and veterans up to $30,000 from military retirement plans. Property taxes are among the lowest in the U.S. and there's a homestead exemption for the first $50,000 of home value.
Community Spotlight: Latitude Margaritaville Hilton Head - Parrot Heads flock to this 55+ community situated in Hardeeville, just 30 minutes west of storied Hilton Head Island. Inspired by the music and Caribbean lifestyle of Jimmy Buffett, Latitude Margaritaville features island-style homes wrapped in pastel-colored palettes that conjure images of the tropics. Amenities include a Paradise Pool, FINS Up! Fitness Center, Last Mango Theater, Latitude Bar & Chill Restaurant, sports courts and more.
The Volunteer State is as hot as Nashville's famous fried chicken these days, and soon-to-be retirees have taken notice. Tennessee doesn't tax Social Security, pension or employment income, and dividends and interest are the only forms of income that are taxable. And did we mention there's no state income tax? Property taxes are incredibly low and there's no estate or inheritance tax, making Tennessee very appealing for the affluent.
Community Spotlight: WindRiver - This lakefront community in Lenoir City near the bustling college town of Knoxville is a dream come true for retirees who enjoy playing golf and boating. Generous homesites range from a half-acre up to almost two-acres and resale residences are available from $400,000 to $3 million. As if five miles of shoreline and a marina on Lake Tellico wasn't enough, amenities abound, including a Bobb Cupp-designed layout that appeals to avid golfers.
Everything is bigger in Texas, as the saying goes. But you can make the tax argument that everything is better, as well. No state income tax? Check. No taxes on Social Security income, pension payments or 401 (k) and IRA distributions? Check, check and check. Sales and property taxes are higher, on average, than other states on this list. But with such a wide variety of cities, towns and rural areas, retirees can enjoy a ton of Texas-sized value in the Lone Star State.
Community Spotlight: Cimarron Hills - Located 15 minutes north of burgeoning Austin in quaint Georgetown, Cimarron Hills' amenity centerpiece is a highly-regarded Jack Nicklaus Signature Golf Course the Golden Bear referred to as "the finest, purest experience of golf in all the Hill Country - perhaps in all of Texas." The 1,000-acre community blends Hill Country architecture with a touch of Tuscany for the perfect blend of old-world design and modern amenities.
It's nearly impossible to discuss tax friendliness without including Delaware. "The First State" may not be (excuse the pun) the first state that springs to mind for those looking to relocate for retirement. Snow and freezing temps are common from December into March. But for those who're all about saving money, there's no state or local sales tax, no estate or inheritance tax and property taxes are among the top 10 lowest in the U.S.
Community Spotlight: Heritage Shores - With homes ranging from $240,000 to $329,000, this 55+ community in Bridgeville is under an hour from Rehoboth Beach and less than two hours from Washington D.C. Have-clubs-will-retire types will enjoy Heritage Shores' Arthur Hills designed golf course, crafted specifically with senior-based play in mind. The Sugar Beet is the community's gathering spot, with a full bar, handcrafted menu items and smoothies.