Tags: Retirement | retirement in new york | taxes

Taxes for Retirees in New York

By    |   Friday, 12 Jun 2015 11:00 AM

It’s difficult to think of New York State without envisioning miles of traffic and crammed sidewalks. This is probably due to the fact that the Empire State is home to the nation’s largest and busiest city, New York. However, certain corners of the state are retirement havens for seniors looking to escape the busy life.

As it turns out, a number of cities in New York feature plenty of culture, gorgeous scenery, and a chance to escape the fast life. That is, if retirees can escape the taxes.

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The New York Daily News first line in a 2014 article instructs residents of the state to, “Get out while you can.” The article goes on to explain that “The state ranked poorly (in a study from Bankrate.com) when it came to the general well-being of its retiree population.” High taxes are one of the primary culprits for this dubious distinction.

Others figure that the high cost of living is preventing the state from holding on to its seniors. As stated in a 2014 Pressconnect article, “New York State is increasingly driving away one of the most powerful economic assets to come along in generations — Baby Boomers in their retirement years.”  The article goes on to blame high taxes.

From 2004 to 2011 the state lost billions of dollars ($20.5 billion to be exact) due to retirees moving out of the state and to places like Florida, where the taxes are much more reasonable (in fact, Florida does not have a state income tax).

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Fortunately, there are a number of tax exemptions in place for retirees living in New York State that could help offset the high tax rates. Military pensions, civil service pensions, and state and local pensions are all tax exempt. In addition, up to 20,000 of qualified pensions can be excluded for those aged 59 and older.

Still, despite these tax exemptions, overcoming the tax rates on income is a challenge for retirees. According to Kiplinger, the “tax rates on non-retirement income can be punitive.” The state income tax ranges anywhere from 4.0 percent to 8.82 percent. Meanwhile, the capital gains tax is the second highest in the nation at 31.5 percent.

A few saving graces here are that the state doesn’t tax items such as: food, prescription drugs, health club memberships and most arts and entertainment tickets.

With such high taxes, retirees in New York State will have to try and search for other ways to cope. Fortunately, the state does offer a great deal by way of culture, amenities, and setting. It’s up to individuals to determine whether those pros are enough to cancel out the cons.

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It's difficult to think of New York State without envisioning miles of traffic and crammed sidewalks. This is probably due to the fact that the Empire State is home to the nation's largest and busiest city, New York. However, certain corners of the state are retirement havens for seniors.
retirement in new york, taxes
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2015-00-12
Friday, 12 Jun 2015 11:00 AM
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