| When retired, you can do anything you wish to | | | | estate taxes are what most people are |
| do. But penny-pinching where possible is a | | | | concerned about. The problem with these two |
| requirement because you will be thriving on a | | | | types of taxes is that when you retire, they |
| fixed income. The taxes you pay the IRS are no | | | | actually function in an opposite fashion. Your real |
| exception. You can either claim every possible | | | | estate taxes generally increase while your income |
| deduction that you can claim legally, or relocate to | | | | reduces. So while you'll be receiving less money, |
| one of the 9 income tax-free states. If that is | | | | you'll be asked to pay more taxes on your home |
| not enough, you can even move to one of the 5 | | | | and property. If you are doing home renovations, |
| states that don't collect sales tax. | | | | you'll need to determine how that will increase |
| Both categories include Alaska. And if you can | | | | your property taxes. For retirees who are living |
| hurdle the climate change, relocating to Alaska is | | | | on a fixed income, this could become a serious |
| the perfect choice. However, this could cause IRS | | | | financial issue, or even cause IRS issues. |
| problems because it's not as tax-free as it may | | | | Of course, many people choose to live in a small |
| look at first glance. | | | | apartment rather than worry about the upkeep |
| Specific municipalities charge local sales tax, though | | | | of a big house. Selecting this option means that |
| the state does not charge it. There are some | | | | they will not be required to pay any property |
| boroughs, which are essentially counties and cities, | | | | taxes, but if they're getting a considerable income |
| that collect property taxes. However, your initial | | | | from pensions and other sources, they may end |
| $150,000 will be exempt if you're 65 or older. | | | | up having to pay considerably higher income tax |
| Also, there is an estate tax in Alaska. If you are | | | | rates. This is primarily decided not by where you |
| concerned about what your children will receive | | | | opt to live, whether it's Florida or Alaska, but |
| from you as inheritance after the government | | | | particularly where your money comes from. |
| takes its share, this can be a severe issue. | | | | Wyoming, South Dakota, Tennessee, Nevada, |
| Of course, since retirement is about more than | | | | Texas, Washington, New Hampshire, Florida, and |
| taxes and money, selecting a place to live simply | | | | Alaska are states that do not collect income |
| because of their local tax law may lead you to | | | | taxes. Bear in mind, though, that states such as |
| commit a substantial mistake that could have | | | | Tennessee and New Hampshire charge taxes if |
| easily been avoided. However, income and real | | | | you're deriving income from bonds or stocks. |