Does Sales Tax Impact Where Folks Retire?
- Oct 31, 2013 | Gail Cole
The G.I. generation—men and women who lived through the Great Depression and served during World War II—retired in place. Surveys indicate that when they retired, 80% of the G.I. generation wanted to stay in their homes and home towns. Not so their children, the Baby Boomers.
60-80% of boomers want to move when they retire. Some seek more temperate climates, but many are moving to surprising, less expensive places, such as Oxford, Mississippi and Durango, Colorado. Overall, retirement is less financially stable for boomers than it has been for their parents. Moving to less expensive locations allows many retirees to live more comfortably with less worry.
Taxes are always a consideration for retirees, which is why CNN Money’s most recent list of 10 Best Places to Retire includes a “Taxes” section. Are retirement benefits taxed? Is there a deduction for pensions? What about inheritance and estate taxes? Savvy retirees want to know.
The highest income tax bracket, the median property tax and the rate of sales tax are often included in the CNN list. The high rate of sales tax in Spokane, Washington (number 9 on the list), is noted, along with the fact that the state has no income tax. Number 1, Raleigh, North Carolina, has a sales tax rate of 6.75%.
While it’s unlikely a person will move solely for sales tax, sales tax is frequently a consideration. Knowing the different state sales tax rates is a good place to start.