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Posted: Monday, 02 September 2013 6:17AM

The good times roll for retirees in Louisiana



Kiplinger's Personal Finance Magazine says Louisiana is one of the best states in the country for retirees.

The magazine says Louisiana offers a bayou full of tax breaks for the older crowd.

Senior Associate Editor Sandra Block says, in general, the south does better than the rest of the country. And, Louisiana does well for several reasons.

"It exempts, not only Social Security benefits from state taxes, but it also exempts military, civil-service, and state and local government pensions," says Block.

"And, for those who are 65 and older, it exempts up to $6,000 per person of pension annuity income and IRA distributions."

That, she says, could exclude a large part, or all, of retirees' income from Louisiana state taxes.
 
"And, what really jumped out at me is how low your property taxes are," Block said.

Property taxes in Louisiana are the lowest in the nation, according to the Tax Foundation. Median tax on a $135,400 median-valued home is $243 a year, the Tax Foundation calculates. Retirees who are 65 or older with adjusted gross income of less than $65,891 are eligible to have their home's assessed value frozen for as long as they live in the home.

"That's a very big deal for retirees because, for many people, their home is their largest asset," says Block. "And having to pay taxes on it could mean the difference between being able to stay in their home or not."

She also notes that the state sales tax is 4 percent, which is pretty low.

"So, you put all these things together and Louisiana is a very favorable place for people to retire."

And, Block says retirees can find the living is easy in the Big Easy, as well. She likes New Orleans for the older folks.

"Partly because of the low taxes, but also because there's a lot to do. It's a walkable city. And, it may not be people's first thought when they think of New Orleans, because they think it's where all the young people go to have a good time. But, it could also be a very comfortable place to spend your later years."

She says the living in Louisiana is likely more comfortable than the magazine's two top-ranked tax-friendly states, Alaska and Wyoming...both a bit cold for retirees.

Kiplinger's says, although relocating to an income-tax-free state such as Florida or Texas may sound appealing, sometimes the best retirement destination is a state that imposes an income tax but offers generous exemptions for retirement income.

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Locations : AlaskaFloridaLouisianaNew OrleansTexasWyoming
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