No. of Recommendations: 2
One has to be careful when looking at the state tax burden. My home state of Texas, for example, has no state income tax. However, the sales tax is very high (8.25% here in Harris County) and the property taxes are brutal (almost $5,000 a year for a homestead assessed at $200,000).

In fact, Texas may be one of the WORST places for retirees, depending on cirumstances. If they have a nice home, owned free and clear, and a modest income, they'll still get killed by property taxes and sales taxes, and an income tax wouldn't have hurt them too bad if they are living on a modest income.

On the other hand, if you're a renter with a higher income, Texas might be the place for you. From an RE perspective, lists of the "most tax-friendly states to retire" are useful as a baseline, but you need to plug in your own expected situation in terms of income, property values and expected comsumption to figure it out. If you're an extreme LBYMer, for example, a high sales tax might not bother you because you don't buy much that's taxed.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.