If you’re looking for a place where your retirement funds will go the furthest, consider moving to a state that won’t tax your income. Of course, taxes shouldn’t be one of the only factors to consider when deciding where to retire. But moving to a state with no income tax could leave you with more money to cover other costs in retirement.
There are seven states with no income tax on wages, earnings or investment income: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. New Hampshire and Tennessee also don’t tax wages but do tax investment income. If any of the no-income-tax states sound appealing, the question then is: Which city is the best to retire to in each of these no-tax states?
To pinpoint the best places to retire, GOBankingRates identified the three largest cities in each no-income-tax state and considered four factors:
- Percentage of the population 65 and older
- Median monthly rent
- Monthly cost of basic utilities
- Cost of a meal at an inexpensive restaurant
Click through to see the best cities to retire in states with no income tax. Choosing one of the best retirement cities in these states can help you keep more of your money and retire rich.
Bernard Spragg. NZ / Flickr.com
Best City to Retire in Alaska: Juneau
- Percent of the population 65 and older: 8.4%
- Median rent per month: $1,837
- Utilities: $295
- Meal at inexpensive restaurant: $15
If you want to save money in retirement, Alaska is a great choice. However, keep in mind that senior care might cost you a small fortune — it’s one of the most expensive states for senior care services.
Still, retiring in Alaska can be financially beneficial. Not only can you escape state income tax by living in Alaska, but also you can get paid for living in this state thanks to its oil wealth. Residents receive an annual dividend from the Alaska Permanent Fund, which was created in 1976 to share the state’s oil income with people who’ve been a resident for at least a year before applying. The dividend currently is $1,100.