The Best and Worst States to Retire

Wyoming: the home of hot springs, buffalo, mountains, and… retirees? Personal-finance publisher Kiplinger thinks Wyoming could be the next Florida as retirees can avoid higher taxes in this tax-friendly state. The bottom of the list is surprising as well, as states such as Nebraska, Connetitcut, and Kansas top the list above expected contenders for the least-friendly tax states such as Illinois and New York.

It’s less taxing to retire to Wyoming.

While retirees flock to Florida in part for its tax-friendliness, those who really want to save big on their tax bill may want to head west. An analysis released this week by the personal-finance publisher Kiplinger revealed that the state of Wyoming was the most tax-friendly for retirees.

“For Wyoming, it starts with the fact that there is no state income tax,” explains Rocky Mengle, the tax editor at Kiplinger. That means the state does not tax Social Security benefits, pension income, 401(k) plan withdrawals and IRA distributions, or other income. “You can’t beat that,” he says, adding that property and sales taxes are also relatively low in Wyoming. “When you add it all up, Wyoming offers retirees the most tax-friendly environment around.”

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