When you envision your retirement, where do you picture yourself? Maybe you think of the beach or the mountains. Perhaps you see yourself in a big city or a quiet neighborhood. You can settle down anywhere without your job tying you to a specific region.
“Retirement is a celebrated time in life in which seniors can live to the fullest extent. But seniors often face tough financial decisions during this time,” says Cindy Bonney, Vice President for Sales & Marketing at Diakon Senior Living Services.
“In the tax-friendly state of Pennsylvania, older adults stand to benefit from many incentives, rebates and exemptions that can ease this stress.”
Here at Diakon Senior Living, we can help make this transition easier. We are here to provide for the needs of you or your loved one. This includes financial information, such as tax benefits, that will help protect your nest egg and stretch your dollar when retiring in Pennsylvania.
For example, Pennsylvania retirees enjoy full exemptions on all retirement income, including Social Security benefits, pension income (for those aged 60 or older), and payments from retirement accounts like 401(k) accounts and Individual Retirement Accounts (IRAs). Only three other states in the United States offer an exemption on retirement income tax!
Pennsylvanians also benefit from sales tax exemptions and property taxes. Items like grocery bills, clothing, pharmaceutical drug costs and residential heating fuel are not subject to sales tax, and the 6% sales tax is among the lowest 20 states in America. In addition, property tax and rent relief can be provided by the Property Tax/Rent Rebate Program. Homeowners and renters aged 65 years or older – and widows(ers) aged 50 years or older – could qualify for these tax rebates.
Another Pennsylvania program that benefits property owners is the Senior Tax Reduction Inventive Volunteer Exchange (STRIVE). This program gives real property tax credits to seniors who volunteer in public school settings in the district where they live. Payment authorized by the STRIVE Program is valued at no less than the required minimum hourly wage and is subject to federal taxation.
When planning for the future, you will want to include plans for what you want to pass on to heirs. In Pennsylvania, the inheritance tax is largely determined by the relationship between you and the beneficiary. For example:
- Spouses and those under 21 do not have to pay an inheritance tax.
- Your estate will be exempt from this tax if you leave it to a charitable organization.
- A direct heir (like a child or grandchild) will pay 4.5% when they inherit property.
- Siblings will be taxed at 12%.
- All other heirs will be subject to a tax rate of 15%.
In addition to these benefits, the cost of living in Pennsylvania is lower than the national average, with prices more comparable to Minnesota, Texas and Montana. Not to mention that there is easy access to attractions like New York City, many beaches, the nation’s capital and the New England states!
In fact, according to this article published by mcknightseniorliving.com, the areas where our Diakon senior living communities are located in Pennsylvania have been voted as top retirement destinations.
Retiring in Pennsylvania has many benefits, and here at Diakon, we can help you transition to a new safe and comfortable home at an affordable cost. Once you’ve completed your retirement planning, you can begin to think about the possibility of this promising new adventure. Contact us today to tour one of our Continuing Care Retirement Communities that offers a fulfilling retirement lifestyle and a continuum of care that will meet your current and future needs.
~ Matt Petrauskas, Diakon Corporate Director of Sales Training and Support