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5 Tax-Friendly States Retirees Should Consider

January 17, 2023

In the United States we’ve witnessed a mass migration in recent years, due to the Covid-19 pandemic and the rise of remote work. Millions of us realized that because we’re no longer tied to a particular location for work, we can take our income and enjoy a better quality of life in a state with a lower cost of living. But for retirees, this has long been a way of life. 


Once you retire, you can just about live anywhere you want. So why not choose a state that imposes low taxes and therefore allows you to keep more of your retirement income in your pocket? For 2023, the following five states are considered the most tax-friendly for those living on a retirement income. 


Alaska. In Alaska you’ll pay no state income tax, inheritance tax, or estate tax. The gas tax is the lowest in the country, at 9 cents per gallon, and the state and local sales tax rate is 1.76 percent. Residents of Alaska also receive oil dividend checks each year, which can help to offset the slightly higher property taxes. 


Delaware. Retirees often opt for Delaware, because they can exclude $12,500 of their retirement income from the state income tax, and Social Security income is completely excluded. You also won’t have to worry about sales taxes or vehicle taxes, and property taxes are the sixth lowest in the nation. The gas tax is set at a relatively reasonable 22 cents per gallon. 


Wyoming. Retirees who move to Wyoming will be thrilled with the absence of any state income taxes, estate tax, or inheritance tax. You’ll pay some of the lowest taxes in the nation with regard to property and sales, with groceries and prescriptions not subject to sales tax at all. Gas tax is still fairly competitive at 24 cents per gallon. 


Florida. Florida has more to offer to retirees than just the famously warm sunshine! You won’t have to pay estate tax, inheritance tax, or state income tax. That means all of your income from pensions, retirement accounts, and Social Security is not touched by the state of Florida. The sales tax of 7 percent is a bit higher than other states on this list, but groceries and prescriptions aren’t subject to that. 


New Hampshire. Or, if you don’t mind braving some cold weather, New Hampshire has plenty to offer retirees. You won’t pay a state income tax at all, and nothing you purchase within the state is subject to sales tax. You won’t have to worry about estate and inheritance taxes, either. But the state does impose a relatively high property tax, at 1.86 percent, so conduct your home search carefully. 


If you’re considering a move in retirement, do consult with us first. We can help you evaluate your retirement income and budget and match you with locations where your money will go the furthest. 

 

Using Life Insurance to Protect Your Business: Key Strategies for Business Owners

February 11, 2025
As a business owner, safeguarding your enterprise against unforeseen events is crucial for long-term success. Life insurance offers several strategies to protect your business, ensure continuity, and provide financial stability during challenging times. Two primary methods are buy-sell agreements and key person insurance. Buy-Sell Agreements A buy-sell agreement is a legally binding contract that outlines the procedure for transferring ownership if an owner departs due to death, disability, or retirement. Funding this agreement with life insurance ensures a smooth transition and financial security for the remaining owners and the departing owner's beneficiaries. Types of Buy-Sell Agreements Cross-Purchase Agreement: Each owner purchases a life insurance policy on the other owners. Upon an owner's death, the surviving owners use the policy proceeds to buy the deceased owner's share. This method is often suitable for businesses with a few owners. Entity Purchase Agreement: The business itself owns life insurance policies on each owner. If an owner passes away, the business uses the proceeds to buy back the deceased owner's share, redistributing it among the remaining owners. This approach is typically preferred for businesses with multiple owners. Key Person Insurance Key person insurance is a policy that a business takes out on essential employees whose loss could significantly impact operations. The business owns the policy, pays the premiums, and is the beneficiary. If a key person dies or becomes disabled, the policy proceeds can be used to: Cover the costs of finding and training a replacement. Offset lost revenue resulting from the key person's absence. Reassure clients, creditors, and investors of the business's stability. This strategy is vital for businesses where certain individuals are integral to success, such as top executives, lead developers, or primary sales personnel. Additional Strategies Beyond buy-sell agreements and key person insurance, consider these life insurance strategies: Collateral Assignment: Use a life insurance policy as collateral for business loans. In the event of the owner's death, the lender is paid from the policy proceeds, preventing financial strain on the business. Executive Bonus Plans: Provide key employees with life insurance policies as part of their compensation package. This not only offers them personal financial protection but also serves as an incentive for retention. Deferred Compensation Plans: Promise to pay key employees a certain amount at retirement, funded through life insurance policies. This ensures the business can meet its obligations without affecting cash flow. Implementing life insurance strategies is essential for business owners aiming to protect their enterprises from unforeseen events. Work with us to explore your life insurance options and we can help your business remain resilient and continue to thrive.

What Happens If You Outlive Your Term Life Insurance?

February 1, 2025
Term life insurance provides coverage for a specified period, such as 10, 20, or 30 years. If you outlive your term policy, the coverage ends, and no death benefit is paid to your beneficiaries. As you approach the end of your term, it's essential to evaluate your current financial situation and consider options to maintain life insurance coverage if needed. Options to Consider Annual Renewable Term: Some term policies offer an option to renew annually after the initial term expires. While this allows you to extend coverage without a medical exam, premiums typically increase each year based on your age, making it a potentially costly option over time. PROGRESSIVE.COM Policy Conversion: Term-to-Permanent Conversion: Many term policies include a conversion feature, allowing you to convert your term policy into a permanent life insurance policy, such as whole or universal life, without undergoing a medical examination. This option can provide lifelong coverage and build cash value, but premiums will be higher than those of the original term policy. NEWYORKLIFE.COM Purchasing a New Policy New Term Policy: Applying for a new term life insurance policy can be an option, especially if you're still in good health. However, premiums will be higher due to increased age, and you may need to undergo a medical exam. Permanent Life Insurance: Alternatively, you might consider purchasing a permanent life insurance policy, which provides lifelong coverage and accumulates cash value. This option is generally more expensive but offers additional benefits. Exploring Alternative Coverage: Final Expense Insurance: Designed to cover end-of-life expenses, such as funeral costs and medical bills, final expense insurance offers a smaller death benefit with more affordable premiums and may not require a medical exam. Guaranteed Universal Life Insurance: This type of policy provides coverage for a specified age (e.g., up to age 90 or 100) with lower premiums compared to whole life insurance, focusing primarily on the death benefit without significant cash value accumulation. Take Action Now As your term life insurance policy nears its expiration, assess your current financial needs and health status to determine the most suitable course of action. Consulting with an insurance professional can help you navigate your options and select the best solution to ensure continued financial protection for your loved ones.
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