Whether or not you kick off retirement with a decent nest egg, you can expect to rely heavily on Social Security to cover the bulk of your expenses.
There’s a pretty good chance you won’t get the entire income you receive from Social Security. That’s because those with moderate incomes tend to lose a chunk of their benefits due to taxes.
Additionally, some states impose their own taxes on Social Security. Knowing which states tax Social Security is important.
13 US States That Imposes Tax on Social Security
Here are the 13 states where you may lose some of your Social Security income to taxes:
- New Mexico
- North Dakota
- Rhode Island
- West Virginia
Retirement in one of these places doesn’t automatically mean that your benefits will be taxed, as most states provide an exemption for low- and moderate-income earners.
Should you settle down in one of these states for retirement and expect a pretty generous retirement income, then you should prepare for state taxes on Social Security.
It doesn’t mean you should write these states’ Social Security taxes off for your retirement just because they tax it.
You might lose a little money to taxes on your benefits in some of these states, but you may be able to offset that loss by taking advantage of lower housing, transportation, and healthcare costs