10 Places To Retire and Pay Way Less In Taxes

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When you’ve retired, the last thing you want to worry about is how much of your pension, Social Security or retirement savings you will have to hand over to Uncle Sam. What if you could find a place where the money you’ve socked away for your golden years is safe from the grabbing hands of the government? Is there really a tax haven where you get to keep more, if not all, of your retirement money? Well, pack your bags.  There are such places both in the United States and overseas. Let’s start first with the places in the United States where a retiree’s tax burden is lowest and then travel abroad.

1) Alaska, USA

Alaska is arguably the best state for retirees to settle and it is certainly one of the most picturesque. There’s plenty of recreation, miles of wilderness, fishing, boating, scenic touring and more. If you have a yearning for wide-open wilderness, the 49th state has plenty of that. There are retirement communities among the spectacular wonders that Alaska has to offer. Granted it has a cold climate, and spring comes later. However, there are places in the southeastern part of the state that offer a more moderate climate. What’s even better is that its residents pay no income or sales taxes, nor does the state tax the pensions or Social Security income for retirees. Some localities do have sales taxes, but when you become a permanent resident you can look forward to a yearly check from the state thanks to its vast oil wealth.

 

2) Florida, USA

Florida Unless you’re into Alaska’s long, dark winters, a better choice may be Florida, where there is no state income tax and your Social Security and pension income are off-limits. The state sales tax rate is 6 percent and you can enjoy a warm climate but beware of the threat of tropical weather.

3) Mississippi, USA

Mississippi is another Southern choice which is very friendly towards retirees. Social Security income, annual retirement account income, withdrawals from retirement accounts and public or private pension income is not taxed. You may also consider Texas, Illinois, Nevada, Pennsylvania, South Dakota, Washington and Wyoming for their exclusion of taxes on retirement income. A few of these states do levy higher property and sales taxes to make up the difference.

4) Costa Rica

This tropical Central American country lays out the welcome mat for retirees from all over the world. The cost of living is generally a fraction of what you shell out to live comfortably in the U.S. or Canada. If you’re living in a luxurious apartment or home in North America and paying $1,000 or more per month, pack up and go to Costa Rica and pay half as much for many of the same amenities. Leave your money in the bank back home and you’ll only pay taxes on income earned in Costa Rica, but your retirement money won’t be touched by taxation. If you buy a home there, property tax will run you about .25 percent, there’s no capital gains tax if you sell but the country has a 13 percent sales tax. According to CostaRica.com, ex pats can live simply on a budget of about $1,500 a month. When you consider you can hire a housekeeper for $2 an hour, living simply just got a whole lot simpler.

5) Malaysia

Retire in this beautiful Asian paradise and enjoy sandy coastal beaches where sea creatures are plentiful, lush rainforests and sprawling metropolises with some of the tallest skyscrapers in the world. The country offers excellent and affordable health care as well as a very low cost of living. A top-notch apartment with all the amenities can be had for as little as $500 per month. Have it all and enjoy maid service four times a week for the very low price of around $1,200 a month. Retirees can keep most of what they earn since there is no tax on retirement income. If you choose to work there, however, you will pay up to 26 percent in taxes. Buy a home and pay just 5 percent for property tax and there is no capital gains tax. National sales tax is a low 5 percent.

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