About States That Don't Tax Pensions
Many states that are wonderful to work in are terrible places to retire. Some of the most bustling cities and suburbs are cold and noisy for retirees. But these conditions should not be the only ones you heed when choosing a spot to live out your sunset years. Pensions are taxable in 80 percent of the states in the U.S.; here's in-depth info on the states where they are not
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Southern States
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Retire down south if you are looking for warmer weather. Alabama and Mississippi do not tax pensions. Alabama has sales taxes that range from 4 percent to 12 percent and a gasoline tax of 20.2 cents per gallon. Mississippi has sales taxes that range from 3 percent to 8 percent and gasoline tax of 37.2 cents per gallon.
Big-City States
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Retire in the big cities if you always want to have something fun to do. New York State and Illinois do not tax the pensions of retirees. The sales tax in Illinois is 6.25 percent, and the gasoline tax is 57.9 cents per gallon. The sales tax for New York is 4 percent, and the gasoline tax is 59.6 cents per gallon.
Midwest States
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Midwest states are preferable if you're sick of more crowded states. Louisiana and Kansas do not tax pensions. Louisiana has a sales tax of 4 percent and a gasoline tax of 38.4 cents per gallon. Kansas has a sales tax of 5.3 percent and a gasoline tax of 43.4 cents per gallon.
New England States
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New England states can be very beautiful during the fall, though the weather isn't always very pleasant. Massachusetts and Pennsylvania do not impose taxes on pensions. Massachusetts has a sales tax of 5 percent and a gasoline tax of 41.9 cents per gallon. Pennsylvania has a sales tax of 6 percent and a gasoline tax of 50.7 cents per gallon.
Miscellaneous States
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Though Hawaii is an expensive place to live, the state does not tax pensions. Neither does Michigan. Hawaii has a sales tax of 4 percent and a gasoline tax of 51 cents per gallon. Michigan has a sales tax of 6 percent and a gasoline tax of 54.4 cents per gallon.
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