Retirement Is a Game of Numbers

Calculating your financial future

Deciding where to retire often involves looking at the financial implications of each choice. We’ve written another article about the advantages of choosing to live in Pennsylvania versus Delaware, for example, sharing the following advantages when choosing Pennsylvania:

  • Lower State income tax on non-retirement income (depending on amount)
  • No taxation on retirement income in Pennsylvania

When we focus our search and analysis strictly on the tax implications to our income, we only get a piece of the total picture. For many of us, the financial legacy that we leave our children, grandchildren and special causes and not-for-profit organizations, is an important part of our financial planning and personal legacy. Retirement in Pennsylvania has some distinct advantages in this arena as well.

In this post, we’ll share with you some of the advantages of choosing Pennsylvania for retirement as it relates to Estate and Inheritances Taxes and Education Contributions for your children or grandchildren. The experts at Bumpers & Company of Wilmington, Delaware have broken down what we need to know.

Estate and Inheritance Taxes

Pennsylvania has one layer of taxation upon death called the “Inheritance Tax”. It is 4.5% to direct heirs – meaning your children and grandchildren, 12% for siblings and 15% for non-relatives. However, there is no Inheritance Tax for transfers to direct heirs age 21 or younger or to a spouse OR for transfers to a recognized 501(c)3 charitable organization.

If your Estate Legacy Plan includes large amount of charitable giving, Pennsylvania offers a distinct advantage over Delaware.

Delaware has two layers of tax. Delaware has a probate tax as well as an estate tax. Depending on the value of your estate, you could be doubly taxed.

It Bears Repeating…..

One final note on the advantages of choosing to retire in Pennsylvania that deserves to be mentioned more than once is that entrance fees and portions of monthly fees to assisted living facilities may be tax deductible as medical expenses on your federal income taxes. For example, for 2019, up to $1,580 from the monthly fee is eligible as a tax deduction.

So, when you add up all of the tax advantages of choosing Kendal-Crosslands along with the lovely facilities, engaging staff and like minded residents, it’s a wonder that there are any spaces left.

Give us a call at (844)-907-1800 for more information or a personal visit. If a picture is worth a thousand words a visit must be worth much more!

Thank you to the experts at Bumpers & Company for their help and valuable information.

If you want to learn more about the different choices you need to consider when looking at retirement communities, be sure to download our free e-book, The Bottom Line: Financial Facts to Know When Choosing a Retirement Community by clicking the button below.