If you are planning to relocate in retirement, finding a low-tax haven can provide you with more money to spend. What to look for:
Income taxes. Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming have no state income tax. New Hampshire and Tennessee tax only dividends and interest. Other states have low tax rates and special breaks for retirees.
Property tax. In many areas of the U.S., property values are higher than they were 10 years ago. Higher values often mean higher property taxes.
If you buy a home after you move, relocating to an area with high property taxes can more than offset any income tax savings. Why cut your state income tax by $5,000, for instance, if that means paying an extra $15,000 a year in property taxes?
Property taxes are assessed by cities or townships, not by states. Therefore, you should investigate local property tax rates before you decide to buy a home after moving in retirement.
