Is Idaho tax friendly to retirees?
Idaho is tax-friendly toward retirees. Social Security income is not taxed. Withdrawals from retirement accounts are fully taxed. Wages are taxed at normal rates, and your marginal state tax rate is 5.80%.
Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming stand out for their tax-friendly policies and other amenities that retirees may enjoy.
Florida has regained its status as the best state for retirees in 2024. That's according to WalletHub's latest “Best and Worst States to Retire” study. In 2023, Virginia took the top spot and knocked Florida down to No. 2.
In urban areas, such as the city of Boise, the average nominal tax rate is, on average, 1.327%. The rural rate is somewhat lower at 0.893%. Keep in mind, however, that those numbers apply to net taxable value in Ada County. If you qualify for the homeowners exemption, that could be as low as half of your market value.
1. Iowa. Iowa tops the list for best states to live on just a Social Security check thanks to a number of factors. Overall, the monthly cost of living-rent, groceries, healthcare, utilities, transportation, and any miscellaneous expenses-comes to just under $3,000.
Idaho offers state-specific tax deductions for seniors, such as the Idaho Circuit Breaker Property Tax Reduction program, which can provide property tax relief for qualifying seniors.
Idaho was decidedly one of the best places west of the Rocky Mountains to retire. Utah was 11th, while Oregon (38th) and Washington state (43rd) trailed far behind. To determine the best and worst states, WalletHub used three key dimensions to formulate the rankings: affordability, quality of life and health care.
Retirement Location FAQs
According to the Composite Cost of Living Index, the 10 most expensive states to live in (and retire to) are: Hawaii, Massachusetts, California, New York, Alaska, Washington, New Hampshire, Vermont, Maryland, and Oregon.
While Florida was the most popular destination with 11% of retirees flocking there, other states such as South Carolina also attracted older Americans. South Carolina ranked No. 2 with 10% of all cross-state retirement moves in 2023.
Idaho. Idaho taxes groceries at the full 6% state sales tax rate.
What city in Idaho has the highest taxes?
Sun Valley has the highest sales tax rate at 9%. Most cities in Idaho, however, do not charge above the state's rate of 6%.
Social Security retirement benefits are not taxed at the state level in Idaho. Additionally, the state's property and sales taxes are relatively low. Other forms of retirement income, such as from a 401(k) or an IRA, are taxed at the state's normal income tax levels, which top out at 5.8%.
But expensive housing isn't the only thing repelling retirees from the state. Inflation and stock market dips have also negatively impacted their financial situation. In response, seniors are seeking more affordable places to call home.
Kentucky, New Jersey, and Mississippi top the list of the worst places to retire in the U.S. in 2024, according to a new survey from WalletHub.
The top five best states to retire to in 2024 are New Hampshire (1), Utah (2), Minnesota (3), Connecticut (4), and Colorado (5). The bottom five worst states to retire to in 2024 are Louisiana (50), Kansas (49), West Virginia (48), Arkansas (47), and Mississippi (46).
This year, the Idaho Legislature is cutting property taxes by more than $300 million, addressing one of top priorities that Idahoans have identified in public policy surveys in recent years. The deadline for counties to email or mail their 2023 property tax notices to homeowners is Nov.
The state does not tax Social Security benefits, providing significant financial relief for seniors. In addition to tax benefits, Idaho offers several other financial incentives that can be advantageous for retirees.
The homeowner's exemption will exempt 50% of the value of your home and up to one acre of land (maximum: $125,000) from property tax.
While it offers many benefits, such as affordable housing, plenty of small-town charm, and a wealth of outdoor recreational opportunities, there are also some challenges to living in Idaho. Some cons include limited cultural and entertainment options, long and harsh winters, and a relatively isolated location.
Combining all taxes together, including sales tax, the average Idahoan pays $1722 less in taxes per year than the average Oregonian. That's averaging together every adult or child, employed, retired or unemployed. And cost of living is 39% higher in Oregon than in Idaho.
How much money do you need to retire in Idaho?
In Idaho, a comfortable retirement will cost an estimated $1,033,016, about $87,400 less than the average nationwide. Life expectancy at age 65 in Idaho is in line with the national average, and the lower retirement costs in the state are attributable to a lower overall cost of living.
#1: Twin Falls
With a median home sale price of $354,950, Twin Falls takes the number one spot on our list of affordable places to live in Idaho. About 130 miles away from Boise, the nearest major metro, Twin Falls is home to roughly 51,800 people.
This is the most expensive community in Idaho and how much it costs to own a home there. An Idaho mountain community has the priciest homes in the state. A recent report from CashNetUSA, an online lender, ranked Ketchum as the most expensive community in Idaho, with an average home price of about $4.6 million.
Querétaro, a historic city in Central Mexico, and Isla Mujeres and Cozumel, islands off the coast of Cancun and Riviera Maya, all offer housing for as low as $500 a month, access to excellent healthcare, and an abundance of recreational activities. However, five of the destinations on the list are in Southeast Asia.
Ecuador has a diverse and stunning range of landscapes including the Amazon Rainforest, providing retirees with ample opportunities for exploration and adventure. Ecuador offers the Retirement Visa available to those who receive a lifetime pension or annuity income of at least $800 per month.
