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 Pennsylvania, retirement income is not taxed if you have reached retirement and you are over 59 1/2. To be considered retired, you have to meet the requirements of a Pennsylvania eligible plan and separated from working. Eligible plans that are considered are 401(k) plans, thrift plans, thrift savings plans, and eligible welfare plans. You do not have pay any taxes on Social Security benefits, Railroad Retirement benefits, commonly recognized pensions, old age retirement benefits, United Mine Workers’ pensions, military pensions, and civil service annuities.
We recommend you consult your financial advisor or tax professional in Pennsylvania 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!