With retirement comes a lot of questions, with one of the most significant being where to live. There are a lot of factors to consider when it comes to relocation but retirees usually aim for states where they can get the most bang for their retirement buck. And probably very little snow too! But no matter where you live, you can’t guarantee 100% that snow won’t happen. There is one thing you can always count on though -- taxes.
Taxes are a major part of a retirees relocation equation for determining which state to live. According to Kiplinger, a popular finance publisher, the state of Georgia is one of the best. In fact, it ranked seventh on their list of the top 10 most tax-friendly states for retirees! Here’s why:
State sales tax
Georgia state sales tax rate is currently 4%. Depending on local municipalities, the total tax rate can be as high as 8%. Also, the state doesn’t tax grocery food sales (but several local governments can, and do so around 2-4%.) Overall, the sales tax is moderate compared to other states.
Georgia has six marginal tax brackets, ranging from 1% (the lowest tax bracket) to 6% (the highest tax bracket). The percentage you pay depends on your income and how you file your taxes (individual, married filing jointly, etc.). You can find a list of the Georgia income tax rates here.
Social Security tax
In Georgia, your social security benefits are not taxed.
Exemptions for other retirement income
For anyone age 62 to 64, the exclusion is $35,000 per person. For individuals over the age of 64, the exclusion is $65,000 per person. That applies to all retirement income, including pensions and annuities, interest, dividends, net income from rental property, capital gains, royalties, and the first $4,000 of earned income, such as wages. IRAs, 401(k)s, private pensions and public pensions all qualify for a retirement income exemption of up to $35,000 or up to $65,000, depending on your age.
Georgia property taxes are somewhat below average. Property tax rates vary by county, with a range from 0.44% to 1.29%. Homeowners pay about $940 in annual property taxes per $100,000 in home value. Georgia homestead exemption is available to every homeowner who occupies his or her home as a primary, permanent residence. It exempts the first $2,000 in assessed value (equal to about $5,000 in market value) from property taxes.
In Georgia, inheritances are not taxed.
There is no estate tax in Georgia.
We also want to mention that Georgia’s cost of living is about 8.5% lower than the national average. That means that retirees can expect their everyday costs to be fairly low.
With so many tax benefits for retirees, it makes sense to take a close look at Georgia as an excellent place to live. And better yet, check out Harbor Club on Lake Oconee. We’ve got brand new, beautifully designed right-sized homes available now (with maintenance included!) in our fantastic, debt-free lake and golf community.
Contact us today to arrange a personal tour. We’d love to show you what Southern hospitality is truly like!