When it comes to saving money, most retirees understand the benefits of moving to a low tax retirement location. However, some of the most tax-friendly retirement states may not be the best fit when you consider other factors such as climate, culture and proximity to family and friends.
Florida will certainly appeal to select retirees with affordability and a warm climate. The sunshine State offers semi-tropical living and some enticing tax breaks. Florida has no state income tax, and, as of 2007, the state did away with its intangible tax on investment income. When it comes to property taxes, Florida has a homestead exemption of up to $50,000, which applies to homeowners who are permanent residents. Combined state and local sales tax can be high in Florida, but food is exempt, as are both prescription and non-prescription medicines.