Alaska top state for retirees

Americans planning their retirement may want to consider moving north - way north - to Alaska.

That's because Alaska does not levy an income tax, inheritance tax, or even a sales tax on its residents. For that reason, Kiplinger put the state at the top of its list of 10 tax-friendly states for retirees that are intent on keeping as much of their earnings as possible. The report added that simply looking at whether or not a state has an income tax could be a mistake for seniors, because even states that do impose income taxes sometimes offer certain benefits - such as large exemptions for Social Security benefits - that could pay off for retirees moving there.

For instance, those moving to Wyoming won't pay income or inheritance taxes but will encounter a 4 percent sales tax. At the same time, prescription drugs and groceries are not taxable in Wyoming, and the state offers favorable property tax conditions. Additionally, the report highlighted Michigan, which offers enough retirement-income exemptions to make paying the state's 4.35 percent income tax worth it.

Texas and Florida have also traditionally been popular states among relocating seniors, both for their absence of an income tax and for their warmer temperatures.
 

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