A heavy tax burden has resulted in Connecticut having the second worst tax burden for retirees. It comes in just behind Vermont in overall rankings.
“What many people don’t realize is that where you retire can be just as important—or, in some ways, even more important—than what you have when you retire,” said Sandra Block, senior associate editor at Kiplinger’s Personal Finance. The publication calls the state a “tax nightmare” for retirees.
Among the knocks against Connecticut are its 6.35 state sales tax. The survey doesn’t look at local sales taxes levied like those in New York City, which makes Connecticut look unfavorable compared to neighboring New York State’s 4 percent tax rate. Connecticut is also ranked high because of its state income tax on Social Security payments.
The list was unveiled as part of Kiplinger’s Retiree Tax Map—available at kiplinger.com/links/retireetaxmap—which offers a visual guide that compares taxes on income (including Social Security benefits, pensions and other forms of retirement income), property, everyday purchases, and, ultimately, a retiree’s estate. The guide also reveals special senior tax breaks across all 50 states, as well as its taxes on inheritances and estates above a certain threshold.
One factor in Connecticut’s favor, according to the report, is it does not tax military pensions and tax breaks are available for seniors.