Where you decide to retire has an impact on your ability to receive affordable long term care support, the taxes you’ll pay and your overall lifestyle in retirement. That’s why it’s important to weigh the different states you are considering moving to or making your permanent residence carefully. 
Massachusetts is one such state that frequently comes up on a list of those that are most expensive to retire in. The average state and local sales tax is 6.2%, the average property tax is 1.15% of the home’s value, the state income tax is a flat rate of 5% and there is tax on retirement income.
Although Massachusetts does not tax government pension income or social security benefits, other retirement income will stay taxed with the 5% rate.
Residents over the age of 65, however, who do earn less than a certain amount, which in 2020’s tax year is $92,000 for married couples who file jointly and $61,000 for individuals, can receive a property tax credit of up to $1,150. When creating your estate planning materials remember that Massachusetts also has an estate tax which is a tax on the fair market value of your assets after you pass away that can range from 0.8% to as high as 16% in the event that your estate is worth over $1 million.
Property that is left behind to a surviving spouse, however, can be exempted from Massachusetts estate tax in addition to any property left to a qualified charity.
As you can see, there are a lot of variables to keep in mind when planning for retirement and even the management of your estate in Massachusetts.
For more questions about the Massachusetts estate planning process, schedule a consultation with an estate planning lawyer today.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship. For legal advice specific to your situation, please consult with a qualified attorney.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship. For legal advice specific to your situation, please consult with a qualified attorney.