Fidelity crunches the taxes for each state with the assumption that a retiree withdraws $100,000
annually from a traditional IRA.
Although the results are interesting and useful, I wish Fidelity would have included property and sales taxes
in their analysis for a more holistic view.
Key takeaways• State taxes can have a big impact on your retirement nest egg and choosing a lower-tax state could save you thousands annually.
• Despite their reputation for high taxes, some northeastern states may be highly favorable states for retirees who withdraw from IRAs.
• Often seen as retirement-friendly, some Sunbelt states can have relatively high taxes on IRA withdrawals.
• Married couples often pay much less in taxes than single filers on the same IRA income—about 6 percentage points less.
https://www.fidelity.com/learning-center/personal-finance/best-states-to-retire-for-taxes
Comments
Disregarding T-IRAs, one could use Roths. Contributing to Roths instead of keeping one's retirement savings in taxable accounts seems like an obvious win. Income in Roths is taxed at 0%; income in taxable accounts is taxed at 15% or more.
That is, unless one qualifies for 0% tax on cap gains. One way to do that is to have relatively low taxable income to take advantage of the 0% cap gains tax bracket. Another is to never sell but to bequeath appreciated assets to heirs.