Josh Scandlen Podcast

Mississippi is VERY favorable for retirees when it comes to taxes.  In fact, it's going to incredibly hard to beat the great state of Mississippi in terms of the taxes retirees pay.  Let's start with income tax.  Yes, Mississippi has an income tax.  And so many people will overlook the state for retirement.  BIG MISTAKE! Mississippi exempts ALL retirement income from tax, not only Social Security but IRA, 401ks, 403bs, TSP and pensions.  Are all exempt from taxation! That is amazing.  Think about it, you have $50k in Social Security and $50k in pension/IRA distributions.  You pay ZERO tax.  That's right, NOTHING. Again, just shows you have to look beyond the top line tax rate.  "Oh, but Josh, they have a high state sales tax of 7%, which is the 2nd highest in the nation," you say.  Nope. You need to look beyond that top line rate too. Because in Mississippi only two localities have an additional tax.  So, all in all, Mississippi is only the 21

Minnesota is tough on taxes for retirees.  No other way around it.  High tax on income.  High tax on property.  High tax on sales too.  Factor in all three and you're in a very unfriendly state tax-wise.  Now, again, if you are going to retire in Minnesota, it makes sense to be  engaging in proactive tax planning.  The source of your income stream is HUGE. $50k in say IRA distributions plus $25k in Social Security = a tax nearly $3k Switch those two numbers though and you have basically NO income tax! Critically important to understand the tax code and what income is taxed.  --- Support this podcast: https://anchor.fm/josh-scandlen-podcast/support

Once again you have to look beyond the top line numbers to factor how Michigan taxes retirees.   No tax on Social Security income.  A large standard deduction of $20k per person who is over the age of 67.  So, say you have $40k in Social Security and $40k in IRA distributions, you pay 0 income tax to the state, even though it appears they are a "high tax" state.  Property tax RATE is high, but actual dollar amount of property tax will be quite low comparatively speaking because the  housing values in Michigan are relatively low.  Sales tax is a flat 6%.  From the state side of things that seems high. But there is NO OTHER sales tax added. No county or local sales tax.  What does that mean? Your sales tax in Michigan is pretty low.  All in all, a retiree with less than $100k income is going to do just fine in Michigan, at least in terms of taxation.  The cold is a different thing altogether! --- Support this podcast: https://anchor.fm/josh-scandlen-pod

From a tax perspective, California, by and large, is not as punitive as one may think, especially for retirees.  The state does NOT tax Social Security income.  They have no estate or inheritance tax.  And believe it or not, income tax rates are not considerable for average taxpayers. Yes, the wealthy, those making over $1mm will get hammered. But for the vast, vast majority of taxpayers CA tax rates are reasonably. Property taxes on a percentage basis of assessed value are actually low. The problem is that the median home value in CA is over 400k.  So, while the percentage of value is low the actual dollar amount is quite high.  Where CA really gets you though is in sales tax.  Sales tax are HUGE in the Golden State. No getting around that.  And if you smoke or drive a car that uses an internal combustion engine you pay through the nose.   One thing you need to consider though is that CA DOES charge its own premature distribution penalty of 2.5% on IRAs, Qualifie

Alabama has the 2nd lowest property tax in the United States.  Which is a huge win for the residents there.  But citizens of Alabama pay among the highest sales taxes in the nation too.  However, if you just looked at the state sales tax, you may think you wouldn't pay much in Alabama.   But you'd be wrong.  As the localities can put their own sales tax. And they do, more than double the state sales tax actually. Lastly, when it comes to income tax Alabama is very favorable for retirees.  Social Security is exempt. As are all government pensions AND, and this is huge, qualified private pensions.  What is a qualified private pension?  Well, here is what the state says. "Payments from a Defined Benefit Retirement Plan in accordance with IRC 414(j)." And here is a 29 page list of various companies who have NOTIFIED the state that their pension is qualified. https://revenue.alabama.gov/wp-content/uploads/2017/07/DEFINED.BEN_.pdf  AL says that this list is by no way

Retiring in Massachusetts? You need to be doing some serious tax planning before you hang up your boots.   If you do, you can actually have a rather favorable, all-around, tax situation.  If you do nothing though, you're going to be in a world of hurt.  First off, Massachusetts does not tax any Social Security income.  That right there should give you a HUGE incentive to maximize your Social Security benefits.  MA also doesn't tax state and local government pensions. It appears they do tax Federal pensions though.   All other income is fully taxed as ordinary income. IRA distributions, 401k distributions, private pensions, annuities, etc.  And these are taxed at a flat rate over 5.1%. But it gets worse. They not only tax your income at 5.1% but they tax you on your Federal AGI. Not your taxable income!!!  If you don't know the difference you haven't been watching my videos... :) Let me give you a simple example how this works.  You have $100k in Fed AGI. &nbs

Maryland is another of these states where you need to look beyond the top line tax rates and actually dive into what your locality can add to your burden.  For instance, Maryland income tax is 5.75%.  Which may or may not be reasonable depending on your perspective.  Yet when you through local taxes into the mix, the overall burden is over 10%!   Sales tax though is an 'all-in" 6% with localities adding NOTHING to that tax.  So, what looks to be an expensive state sales tax is actually rather cheap when you factor what localities can add.  Property taxes are high from an overall dollars paid due to Maryland being a high cost of living state.  But from a pure percentage perspective Maryland is towards the middle in overall property tax rate.  So, all in all, Maryland is not nearly as burdensome as some might believe.  Social Security benefits are not taxed. And there is a SIGNIFICANT tax exclusion from pensions and qualified plan distributions.  $29k per t

Louisiana is very favorable tax-wise for retirees.   State and local income tax burden is among the lowest in the nation.  With lots of exemptions added to the mix too and even some of your IRA distributions are free from taxation as well.  Property tax is all of .51% and with median housing values only $143k you're just not going to pay much in property tax in LA.  However, the sales tax they get you.  10% all in sales tax!  That's literally the highest in the nation. But you can easily pay that tax with the money you save on low property  and income taxes indeed! Oak RIdge BOys "leaving Lousiana" https://www.youtube.com/watch?v=zbl7tSluOrU --- Support this podcast: https://anchor.fm/josh-scandlen-podcast/support

The great state of Maine is VERY favorable from a tax perspective for most retirees.   Unfortunately, unless you dive into the numbers many people will not realize this.  They'll see the state and local tax rate of 10.2% and go running for the hills! But as we show you in the video, very few Mainah's are going to pay anywhere near that kind of income tax rate. In fact, the vast majority of retirees in Maine won't pay ANY income tax at all. From a sales tax perspective, Maine is pretty good as well. Not quite as good as their friendly neighbor to the south, New Hampshire. But their 5.5% 'all in" sales tax rate puts Maine in the top 10 of sales tax minimization of all the US. It's their property tax where they can get you.  1.23% on assessed value. This rate puts Mainers in the top 10 for most UNFAVORABLE property tax.  But, as I've said many times, of the 3 primary sources of taxation, sales, property and income, having 2 out of 3 being favorable is quite a good place to be.   An

Delaware is VERY favorable for retirees in terms of the tax they pay. No sales tax at all.  Property taxes among the lowest in the nation and a decent-sized exemption of $12,500 per taxpayer over the age of 60 on retirement income. And Social Security is exempt too. Delaware may actually be one of the most favorable states for retirees to live in.  --- Support this podcast: https://anchor.fm/josh-scandlen-podcast/support

Indiana is in the LOWEST tax favorable quintile of all the United States.  Can you believe that? Indiana is actually 2 quintiles behind...Illinois!  Crazy...I know it.  Pulaski County adds 3.3% tax on top of the tax the state assesses as well.  Which means you really need to look at the county you're going to live in to get a better gauge of your total income tax in Indiana.  The state of Indiana doesn't tax much, only 3.3%. But man, oh man, the county can hammer you. Bigly! Not much in terms of exemptions either. IRAs, 401ks and out of state pensions all fully taxed.  Homestead exemptions is beyond my ability to comprehend here. So, if you live in Indiana DEFINITELY go to your county office and make sure you're getting all the exemptions you are entitled! Maybe even ask a local realtor if they know how to figure out the exemptions you may get in your county.  Cars sales tax is based on MSRP!  It is NOT based on your purchase price.  Crazy. It appears there i

Iowa is not a tax friendly state for retirees. Not in the worst quintile, but in the 2nd worst quintile.  Pretty high income tax with moderate income. Big marriage penalty too. 7.6% is the effective tax rate to married filing jointly.  That's a big tax, my friends. But at least there are some exemptions for IRA and other retirement plan distributions about $12k if you're married filing jointly.  High property tax though.  And there is no real homestead exemption for seniors either.  There is a large inheritance tax too! Lineal family members receive inheritance tax free. All others...taxed. And the tax is not small either.  Iowa has a rather low sales tax though, when you factor in the state AND the localities.  Basically, income tax is pretty high. High property tax. Sales tax is moderately low.  There is an inheritance tax too. Just keep that in mind as you plan your estate.  --- Support this podcast: https://anchor.fm/josh-scandlen-podcast/support

Whoa!  Kansas is NOT a tax haven for retirees no matter how how you cut.  From taxing Social Security to all private pensions, high property tax rates and top 10 in the nation for sales tax rates, Kansas leaves a lot to be desired from the tax perspective. Here is one thing that jumped out at me regarding Kansas tax that you need to be aware of. Your Social Security is taxed based on your AGI...NOT your taxable income. Why is that important? Well simple.   Let's say you're a politician in Kansas.  You can say "We don't tax your Social Security until your AGI is above $75k."  That sounds reasonable, no? But that also means if you have taxable income above $49k you will pay tax on your Social Security benefits.  Same exact scenario. But the code discussed AGI as opposed to taxable income as a way to minimize the initial affect a citizen will have when they hear how the taxes work. Yet, it doesn't stop there. In other areas, Kansas DOES say explicitly they will tax you if you

Believe it or not, from a pure income tax perspective, it's going to be hard to beat Illinois.  Yes, I did just say that.  Illinois is VERY favorably in taxing income.  In fact, the state does not tax ANY retirement income.  So, if you're income consists of $50k in IRA Distributions, $25k in Social Security and $25k in pension, you hav 0 income tax.  Now, don't get me wrong. Illinois does get you in other perspectives. Sales tax and property tax are not low.  In fact, those two areas are among the highest in the Union. Unfortunately, of the 3 taxes, Income, Sales and Property, I'd rather have your income tax the higher of the three.  You can manipulate your income so much easier than your sales and property tax. So, while Illinois is favorable for income tax, it would be hard to recommend moving there for a soon-to-be retiree.  But with that said, it's not nearly as bad, tax-wise, than what may be commonly thought. At least not for those whose income mainly comes f

Idaho does their taxes the EXACT way I prefer, low property and sales tax and a bit higher on the income side.  Obviously, low for all three is ideal, but the state has got to get its money from somewhere.  Idaho is VERY favorable on property taxes.  Now, if you just look at the state tax rate on sales tax you may be disenchanted. Don't do that! You've got to look at the tax rate for state AND the localities!  In this case, Idaho is extremely favorable.  Income tax is a bit high.  Not extraordinarily high.  But higher than I'd prefer.  However, income tax can be manipulated with some basic financial planning. So, Idaho, great french fries and a very favorable tax code as well.  --- Support this podcast: https://anchor.fm/josh-scandlen-podcast/support

Wow!  Hawaii taxes for retirees are VERY favorable.  From sales, property and income taxes, you're going to have a tough time arguing with what Hawaii is doing. I am actually stunned!  Because you hear so much that Hawaii is a high cost state, and that is true. Real estate there is through the roof.  But once your mortgage is paid off, a lot of the other areas in which you get hit hard in your working career are minimized in the great state of Hawaii.  At least from a tax perspective. Their property tax rate is literally the lowest in the country.  Now, don't get me wrong, the actual dollar amount you pay in property tax won't be the lowest in the country, due to the high property values, but even the dollar amount isn't a huge burden.  If you follow my Youtube channel, you'll know that of the three main taxes retirees pay, Income, Sales and Property, it's the property tax I adhere to pay most attention to, followed by the sales, and lastly the income. You can do a lot

Military pensions and maybe some of your Social Security are exempt from taxes in Connecticut but other than those two things, EVERYTHING else is.  Too bad too because it wasn't that long ago when Connecticut had no income tax.  My how quickly things changed for the residents of that great state.  However, Connecticut's sales tax burden looks much worse than it actually is, once you factor the local sales taxes.  In fact, while the state is ranked quite high in overall state sale tax burden, once factor in local sales taxes, CT comes in rather low relative to the rest of the US. Property tax burden as a percentage of assessed value and in terms of total dollars collected is in the top ten of highest taxed states.  And there is not much of a homestead exemption or property tax credit for seniors either. All in all, Connecticut is painful for retirees.  High income taxes, high property taxes, lower sales tax with very minimal deductions or exemptions to take advantage of. 

Colorado is quite reasonable for retirees when it comes to the taxes they pay.  I was somewhat surprised by this given what I thought was the political shift to the left in CO due to the amount of transients moving in from California.  From a property tax perspective the tax rate is VERY low.  If you've been following my channel you know that my preference for retirees is a LOW property tax even if you're in a state with a high income tax.  The reason for this is that the tax you pay on income can be easily manipulated, to your benefit.  But your property is your property.  You can't move your home.  So, given Colorado's favorable tax on property, this is a good thing.  Secondly, they have significant deductions and exemptions for income tax for retirees as well.   I ran a calculation for a couple born in 1953 with $25k Social Security and $25k IRA distributions and they pay all of $98 in income tax.  That, my friends, is not too shabby.  Where CO

Whoa, Arkansas is not friendly at all when it comes to income taxes.   Social Security is not taxed, which is good, but once your total income (Gross income essentially) breaks $75k you're going to be a 6.9% bracket.   On top of the high bracket too, taxpayers only get $6k in total retirement account exemptions.  As of 2018, military pensions are not taxed either.   Property taxes are among the lowest in the nation though.  However, sales tax is the 3rd highest in the US.   So, of the three tax buckets, income, property and sales, Arkansas fares poorly in two.   With proper planning, of course, you can minimize your income taxes. And while you're stuck with high sales tax, having a low property tax is probably one of the smartest moves you can make in retirement.  --- Support this podcast: https://anchor.fm/josh-scandlen-podcast/support

Wow, Alaska is VERY favorable from a tax perspective for retirees! NO sales tax. NO income tax.  First $150k of ASSESSED value of your home exempted for folks over 65 and widow(er)s over 60. Gas tax is very low.   Property taxes aren't low, but they're not extraordinary like in Texas or New Hampshire.  So, other than having to deal with the cold, you'd be hard pressed to beat Alaska from a tax perspective.  Now the question is:  How much does it cost to heat one's home?? Something tells me, heat pumps and Solar panels, thermal or PV, are not going to be sufficient!  --- Support this podcast: https://anchor.fm/josh-scandlen-podcast/support