Retirement planning requires careful consideration of tax implications, from choosing where to live to optimizing Social Security benefits. Forbes’ 2025 retirement analysis highlights Lawrence, Kansas, as a top contender, with a median home price 21% below the national average and lower serious crime rates. However, Kansas’ state income tax—topping at 5.58% for couples earning over $46,000—remains a drawback for retirees.
Locations like Lawrence offer affordability and quality-of-life benefits, but tax climates vary widely. States with no income tax (e.g., Florida, Texas) may better preserve retirement savings, while others tax Social Security or pensions. Forbes’ evaluation of 950 locales emphasizes balancing housing costs, healthcare access, and tax burdens.
Taking Social Security early (age 62) reduces monthly benefits by up to 30%, while delaying until full retirement age (67 for those born after 1960) avoids penalties. Postponing further to age 70 increases benefits by 8% annually, but higher payouts could push retirees into higher tax brackets.
Up to 85% of Social Security benefits become taxable if combined income exceeds $34,000 (individuals) or $44,000 (couples). Retirees in states with income tax face additional layers of taxation, underscoring the importance of geographic planning.
The “Golden Girls” model—sharing homes with peers—can cut housing costs and tax liabilities. For example, splitting property taxes and utilities in a place like Lawrence reduces individual burdens while leveraging affordable markets.
Strategic retirement planning demands analyzing both location-specific tax policies and federal benefit rules to maximize financial security.
