Why Delaware Is The Best For Retirement ?

 

You’ll Find Peaceful Seaside Retreats Delaware  is close to everything, but it has its peaceful retreats as well. Take Rehoboth Beach for example, which features a stroller’s paradise with its mile-long boardwalk and lovely scenery. Get away, recharge, and get some exercise, too.

While you’re there, consider trying something new. Rehoboth Bay’s calm waters make this the perfect place to take up paddle boarding or even try a windsurfing lesson if you’re feeling particularly adventuresome.

Advantages of retiring in Delaware include the relatively low state income tax, property tax benefits, wealth of things to do and ease of travel to exciting nearby destinations.

Tax Benefits in Delaware

The portion of a retiree’s pension and 401(k) income that is subject to federal tax is also subject to Delaware state taxes. However, anyone over age 60 is permitted a $12,500 exclusion for pensions or eligible retirement income. The latter includes not only employer-sponsored plans such as 401(k)s and IRAs, but also dividends, capital gains, rental income and interest. Delaware does not levy taxes on Social Security or railroad retirement benefits.

The state income tax ranges from 2.2 percent to 5.55 percent for income under $60,000. The rate is 6.6 percent for an income of $60,000 and up. In addition, Delaware doesn’t impose a sales tax. While retiring in most Southern or Western states is less expensive, Delaware is a tax-friendly retirement state for those planning to remain in the Northeast.

Soaring property taxes often drive retirees from their former homes. Property taxes are considerably lower in Delaware than in many other states, although they vary by county and municipality. Senior homeowners, age 65 and older, qualify for a tax credit of up to $400 on their primary residences in Delaware as long as their property tax payments are current.

Best Location

Delaware’s central location also has benefits. Just about every place in the state is an hour’s drive or less from Philadelphia, and just a couple of hours from Baltimore, Washington, D.C., and New York City. The major cities in the Northeastern corridor are also easily accessible by train.

At A Glance

Tax Burden: The total federal, state, and local tax burden in Delaware is the 16st highest of all states at 10.2%.  Yet for retirees the tax burden is low - because of exemptions and low property taxes.

Marginal Income Tax Rates: Delaware's top marginal income tax rate goes from 2.2% to 6.6%, which goes into effect with incomes over $60,000.

Retirement Income Exemptions: Delaware exempts up to $12,500 of investment and qualified pension income for people 60 and over.

Sales Tax: Delaware has no state sales tax, although some cities have one.

Property Taxes: Property taxes in Delaware are one of the lowest of any state at .43% of assessed fair market value, with the median property tax paid $1,078.

Social security exemption: Since social security benefits are not taxed in Delaware, and because up to $12,500 of pension income (including capital gains, interest, and dividends) is exempt from state taxes for people aged 60 and over, many retirees will pay little or no income tax to Delaware.

Estate and/or Inheritance Taxes: Delaware does not have an estate or inheritance tax.

Things to Do in Delaware 

Delaware is a state in the county with just three counties, but that doesn’t mean there isn’t plenty to do without heading to Philadelphia, Washington and nearby states. The entire state is only 96 miles long, but it boasts 28 miles of beaches. Wilmington sports a vibrant arts and restaurant scene as well as museums and concerts.

Nature lovers will love Delaware. There are plenty of state, county and local parks and nature preserves. These are great places to hike, bike or ride horses. Delaware has a rich equestrian heritage including Delaware Park for thoroughbred and relatively rare Arabian racing and Dover Downs and Harrington Park for harness racing.