Baby Boomers have driven the market for years, and will continue to do so for years to come.  We were responsible for starting trends in everything from disposable diapers and station wagons to the kind of homes we lived in over the years based on our family needs...and now that we are 50 (plus), this list has grown to include things like anti-aging products and services. We are truly a group to be reconned with based on our  numbers and buying power despite what some advertising agencies think.
  
Based on that fact alone, it isn't surprising that as 78 million of us retire and approach retirement, state governments who don't want us to flee to other states, or countries for that matter, are taking a hard look at how their current income tax policies impact us.

I doubt that what I'm about to say is a complete surprise, but not every state taxes income (and property) the same. States vary on how they tax individual retiree income.
Several mid-western states have enacted legislation to exempt the taxing of Social Security benefits, or modify how they tax that income. Many are also revamping their taxation of federal and private pension income.

Idaho now gives retirees (65 or older) an exclusion from federal pensions, and some state and local pensions of up to $25,390 for single filers and $38,088 for married couples who file jointly. Kansas exempts Social Security benefits for residents with a federal adjusted income of less that $50K.

Nevada,  Alaska, Florida, South Dakota, Texas, Wyoming and Washington have no State income tax at all. Of the states that do have income tax only Illinois, Pennsylvania and Mississippi fully exempt all public and  private pensions plus Social Security benefits.

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Eight states do not exempt Social Security income from being taxed: Minnesota, Montana, New Mexico, Nebraska, Rhode Island,  Vermont, West Virginia and North Dakota, so you might want to consider retiring in a more boomer-friendly state. Seven allow some exemptions. Social security is not taxed in 26 states, including the District of Columbia. California exempts Social Security benefits, but not pensions.

So, when you are making your retirement plans...and we should all be thinking about it in advance, consider how your state's income taxes will impact your retirement lifestyle. You may decide that a move is in your future.

Are you looking for a place to retire cheap? What would you consider to be a cheap place to retire, and what criteria would you use? Affordable housing? Inexpensive places to dine and receate? Does it have to be somewhere in the USA or Canada? Or would you consider going south?...or to Asia?