With your house paid off and your kids no longer living under that same roof, you are limited in the deductions you can take from your income in retirement. It’s important to understand how your retirement income is taxed in the state you live in so you can make your retirement savings go farther.
In Massachusetts, retirement income is taxed and you do not get a federal income tax deduction. However, all Social Security, civil service, state and local government pensions are exempt from state income taxes. If you have pension income from another state or local government and that state does not tax pension income from Massachusetts public employees, then your pension income is exempt from state income taxes in Massachusetts.
We recommend you consult your financial advisor or tax professional in Massachusetts with any specific questions on how your retirement income is taxed. If you don’t have one, we would be happy to recommend one in your local area. Give us a call at Retirement Think Tank at (888) 282-3653 or email us at firstname.lastname@example.org. We would welcome the opportunity to speak with you!