Minnesota
Population: 5,717,184
Tax on retirement income: Yes
Cost of Living for Retirees: 4.90%
State income tax: 5.35% to 9.85%
Average property tax: 1.44% of market value
This state taxes all types of retirement income. This includes Social Security benefits, with the exception of military pensions.
But, thanks to Minnesota’s evolved tax system, households that earn less than $23,900 per year are excused from paying state taxes on their Social Security benefits. The North Star state also offers a special income tax deduction for retirees who make $61,080 or less.
And for couples who file jointly, it’s $78,180 or less. Property taxes in this state are the 13th highest in the country. This means that owners of a $350,000 home pay about $5,040 a year.
The state’s citizens are also subject to an estate tax of about 13% to 16% on properties valued at over $3 million. However, assets left to a surviving spouse are exempt from this.
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