I bet you never thought of a state as a “maverick.” Merriam-Webster defines the term as, “an independent individual who does not go along with a group or party.” Well, when it comes to retirement, Pennsylvania is quite the maverick state. In comparison to its immediate neighbors – New Jersey, New York, and Maryland – all of which rank in the nation’s top five worst states to retire, Pennsylvania truly stands apart from the crowd. Ranked among Kiplinger’s top 14 states to retire in, Pennsylvania has a cost of living below the national average, low health care costs, and is extremely tax friendly for those 65 and older, making it a stellar option for retirees looking to maximize their savings and enjoy a long, care-free retirement. While the Northeast is generally considered a below average region to retire due to its high cost of living and taxes, Pennsylvania is a mighty exception to this rule. So what exactly is up with this retirement-friendly maverick state? Read on for the full scoop:
For starters, Pennsylvania does not tax Social Security income, withdrawals from retirement accounts, or public and private pension income, saving residents potentially thousands annually. In comparison, New York, New Jersey, and Maryland all partially tax withdrawals from retirement accounts. In addition, New York partially taxes private pension income and New Jersey partially taxes both public and private pension income. Maryland also partially taxes public pension income, and fully taxes private pension income.
In New Jersey, property taxes come in with the alarming distinction of highest in the nation. Retiree healthcare costs rank third highest and average $440,299 for a retired couple. The cost of living is the 5th highest in the nation, about 27% above the national average. According to Kiplinger, New Jersey also has the worst ranking for fiscal soundness in the U.S, a major red flag when considering retirement.
Manhattan, with an average cost of living that is 138.6% higher than the national average, is responsible for New York’s high average cost of living, which is about 22% above the national average. In addition, average health care costs for a retired married couple in New York are above average at $433,347.
Maryland ranks 2nd highest in the U.S in average household income for people age 65 and up, yet residents get clobbered by high taxes and costs of living. While Maryland does not tax social security benefits, distributions from individual retirement accounts are fully taxable. Maryland is also one of only two states that has both an estate and inheritance tax, making it one of the least tax friendly states for retirees. Oh – and by the way – the other state that has both is, you guessed it, another one of Pennsylvania’s infamous neighbors – New Jersey!
When considering relocation for retirement, the factors that go into the final decision are different for everyone; proximity to family and friends, weather, hobbies, culture. But one common element weighs heavily for most: where can I live most cost effectively while enjoying a fun-filled and care-free retirement? In considering cost-effective living, Pennsylvania ranks among the best states to retire in the nation. Its tax friendliness, low cost of living, and low healthcare costs make it a clear contender for a long and happy retirement – a true maverick state among its regional peers! With locations all across Pennsylvania, a Traditions of America resort-style community may be a great choice for you!
Sources:
https://smartasset.com/retirement/pennsylvania-retirement-taxes#pennsylvania
https://smartasset.com/retirement/new-jersey-retirement-taxes#newjersey
https://smartasset.com/retirement/new-york-retirement-taxes#q=new%20york
https://smartasset.com/retirement/maryland-retirement-taxes#maryland
https://www.kiplinger.com/slideshow/retirement/T006-S001-best-states-for-retirement-2018/index.html
