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Four Reasons to Retire in Delaware

by pop tug

1. Cost of Living. The State of Delaware is smack dab in the middle of charts describing cost of living expenses sought by seniors wishing to maintain a comfortable lifestyle. Ranked 435 out of 780 places to live by Xpatulator.com–780 being the least expensive-the cost of goods in Delaware is below average for items retirees require, like Internet connections, phone service, rent, gas, electricity–even beer and wine. Prices for recreation and culture, important to retirees with time to enjoy books, movies and hobbies, are relatively low. With a hardship index of only 10 percent, the state of Delaware holds its own, despite economic downturns.

2. Taxes. Retirees seeking tax advantages find plenty in Delaware. The state’s personal tax rate remains among of the nation lowest. Unless you settle in the City of Wilmington, you won’t pay local taxes anywhere else in the state if you move there. Seniors get more value for their dollar because most retail items aren’t subject to sales taxes. “Road signs advertise the state’s tax-free shopping for clothes, jewelry, and gifts for the grandkids!” enthuses Fenwick Island’s “Bayside Blog.” Retirees can collect Social Security benefits without worrying that their funds will be taxed and there are no inheritance taxes, either.

3. Real Estate. Delaware got rid of its “once-in-a-lifetime” age requirement for home sellers, so in addition to some of the lowest property taxes in the U.S., you won’t have to pay capital gains tax penalties on any house you sell, just as long as you reside in Delaware for at least two years. Move every two years if you like and you can repeatedly take profits each time you sell. A tax code change has also made getting a mortgage easier for seniors, as long as they maintain good credit when retiring to Delaware. Delaware homes tend to hold their values above the national average.

4. Pensions. If plan to live on a pension, Delaware offers a generous perk not found in many states: Depending upon your retirement age, you can move there and, regardless of which state you called home during your working years, your pension won’t be heavily taxed. Delaware’s Division of Revenue allows an exclusion of up to $12,500 “or the amount of the pension and eligible retirement income (whichever is less).” This break is reason enough to move to Delaware if you’re over the age of 60, since pensioners under the age of 60 are only allowed to claim $2,000 when they file their tax returns.

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