7 States Where Retirees SHOULDN’T Buy a Home

By Our Editorial Team | Published April 3, 2023

Expert Verified

Our editorial team verifies all financial and lifestyle information for accuracy and relevance to senior living.

Retiree — Photo by Katherine Welles at Shutterstock

Nebraska

Population: 1,967,923

Tax on retirement benefits: Yes

Cost of Living for Retirees: 8.90%

State income tax: 2.46% to 6.84%

Average property tax: 1.65% of home value

The prize for the most minor tax-friendly state for seniors goes to the state of Nebraska. It not only taxes retirement income, including a few Social Security benefits, but the state also imposes high property taxes.

Any Social Security income taxed federally will also be affected by the Nebraska state income tax. And 401(k) funds, IRA withdrawals, and pensions are all completely taxable. Locals are also subject to an inheritance tax that can range anywhere from 1% to 18%.

Remote relatives will have to pay 15% on anything worth over $15,000, and all other beneficiaries are subject to the complete 18% on anything that’s valued at $10,000 or over.

And if all that doesn’t sound like enough of a financial burden, Nebraska also has the 8th highest property taxes in the US. The average property tax on a home valued at $350,000 is $5,775.