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Retirement can be a difficult transition, especially when it comes to finances. However, you can ensure a comfortable and stress-free retirement with the right planning and guidance. Delaware is one of the (if not the) most tax-friendly states for older adults, making it a smart money move for retirees. Besides, the state has gorgeous landscapes, a quality healthcare system, various senior living options, and an array of recreational activities – making it an ideal place for older adults.
This blog will highlight some of the key reasons to retire in Delaware. Additionally, it will discuss its tax incentives, cost-saving opportunities, and all the great amenities this small yet vibrant state has to offer.
Why retire in Delaware?
There are several reasons why many people retire in Delaware. The most common one is its favorable tax rates for retirees. However, that’s not the only thing this state offers! Let’s check out some of the key factors that make Delaware an ultimate retirement destination!
1. Tax Benefits
People retiring in Delaware will enjoy lower taxes on their income, sales, and property. The state does not have a sales tax or inheritance tax. Besides, the state has many qualified attorneys to help with tax preparation and estate planning. That can be very helpful for retirees on a fixed income or interested in taking advantage of the tax benefit of retirement accounts.
2. Close proximity to major cities
Thanks to its coastal location and well-developed transportation infrastructure, it is easy for retirees living in Delaware to visit nearby travel destinations such as Philadelphia, Washington D.C., Baltimore, and New York City. So, for those who want some big-city entertainment while still enjoying the quiet life of retirement, Delaware is the perfect place!
3. Vibrant cultural scene
Beyond its natural beauty, Delaware is also home to some incredible cultural attractions. From art galleries, museums, and performing arts centers to outdoor festivals and events, there’s always something going on in Delaware! Also, there is plenty of outdoor activity options, with miles of coastline, dozens of state parks, and hundreds of trails.
4. Affordable housing
While housing prices across America continue to rise, Delaware remains one of the most affordable states. That is another major reason to retire in Delaware. It offers plenty of housing options for retirees considering downsizing or a new home within budget. Many homes along the coast also boast incredible ocean views – perfect for relaxing after a long day!
5. Senior living options
Delaware also has a wide variety of retirement communities that cater to different budgets and lifestyles. From luxury assisted living facilities to affordable retirement homes, there’s something for everyone. Besides, seniors who need 24-hour care can rely on skilled nursing homes and memory care facilities.
Is Delaware tax-friendly for retirees?
Delaware is considered the most tax-friendly state for retirees, offering a variety of tax savings and incentives. First of all, Delaware does not have any state taxes, sales taxes, or inheritance taxes. Additionally, it imposes zero tax on Social Security benefits and offers up to $12500 exclusion from pension incomes for retirees aged 60 or above. Delaware’s property tax is also very low, with a median rate of .53%.
Furthermore, if you retire in Delaware, you can also take advantage of special senior citizen property tax credits and available deductions based on age, disability status, and low income. Finally, eligible retired veterans may qualify for a property tax exemption. All in all, Delaware is quite attractive to retirees looking to save on their taxes!
Delaware retirement taxes
Delaware retirement taxes are pretty attractive for older adults with a limited budget. The chart below outlines taxes on retirement income for Delaware residents over age 60.
|
Tax or deductibles |
Rate |
|
State tax |
0% or None |
|
Sales tax |
0% or None |
|
Property tax |
.53% |
|
2.2% to 5.55% (if income is under $60,000), OR 6.60% (if income is over $60,000) |
|
|
Tax on Social Security income |
0% or None |
|
Estate or inheritance tax |
0% or None |
|
$0.23/gallon for Gasoline & $0.22/gallon for Diesel |
|
|
Pension/retirement income exclusion |
Up to $12500 |
Top senior living options in Delaware
Delaware offers a variety of top-notch senior living options designed to meet the needs and preferences of older adults. From independent, assisted, and memory care facilities to continuing care retirement centers and short-term respite care, there is something for every budget and lifestyle. Some of the best options include:
1. Ivy Gables
Ivy Gables in Delaware is a cozy, charming senior living community located in Wilmington, DE. It offers independent living, assisted living, and memory care services. Ivy Gables features multiple floor plans, an on-site beauty salon, housekeeping services, and various community events to encourage social engagement. The facility is perfect for those looking for an active post-retirement life.
2. Millcroft Senior Living
Millcroft Senior Living is a premier retirement community in Newark, Delaware. The facility offers independent living, assisted living, skilled nursing, and rehabilitation services. Millcroft strives to create an inviting atmosphere that promotes socialization among residents via planned events and activities such as game nights, movie nights, or crafts classes. Their dedicated staff is always available to provide assistance if needed.
3. Forwood Manor
Forwood Manor is a senior community located in Wilmington, offering independent, assisted living, and respite care services to those over 55. At Forwood Manor, residents enjoy a range of amenities tailored to their needs, including on-site healthcare services, nutritious meal plans, housekeeping assistance, and scheduled transportation. Furthermore, the community offers a variety of activities and fitness programs for physical and mental well-being.
4. Country House
Country House is a charming 55+ community offering independent and assisted living services. Boasting peaceful and picturesque surroundings, this vibrant neighborhood offers the perfect balance of convenience and tranquility. It has a recently renovated campus with modern amenities and social spaces to give its residents a perfect post-retirement life. They have a team of trained caregivers and staff who ensure 24/7 compassionate care.
5. Delmar Nursing and Rehabilitation Center
Delmar Nursing and Rehabilitation Center specializes in short-term rehabilitation services such as physical, speech, and occupational therapy, and stroke rehab services. As for their long-term skilled nursing services, it includes wound care, pain management, infectious disease care, IV care, and similar services. In addition, Delmar Nursing offers specialized programs for those who require dementia or Alzheimer’s care.
6. Genesis Seaford Center
Seaford Center is a licensed nursing home in Delaware, offering personalized, comprehensive care. The center is dedicated to providing residents with quality medical and nursing care while maintaining their dignity and independence. In addition to the traditional offerings of a nursing home, it also offers social activities and spiritual development opportunities to ensure the mental well-being of its residents.
Final thoughts
If you or a loved one is planning to retire in Delaware, we hope this article has helped you better understand the tax landscape for retirees in the state. Besides, its generous tax rates, The First State has many other amenities to offer to older adults. From its beautiful beaches and abundant cultural attractions to its excellent healthcare system and top-notch retirement communities, Delaware has it all!
If you have any questions about specific tax situations, senior living options, or any other related topic, please get in touch with BoomersHub. We’d be happy to help! In the meantime, you may check out the following pieces:
- Best tax preparation tips for seniors
- Elder law attorneys for seniors
- Best retirement communities in San Diego: what makes the city popular among retirees?
- Best retirement communities in Maine
- Importance of a will for seniors
FAQs
What are the downsides of living in Delaware?
Like every other place in the world, there are some downsides of living in Delaware as well. Some of them include:
- Delaware has a high crime rate.
- Prone to natural disasters and harsher weather conditions.
- Despite being a small state, Delaware has some of the highest traffic congestion on the East Coast.
- Delaware does not have an international airport.
- Other major cities on the East Coast often overshadow Delaware’s cultural attractions and entertainment options.
At what age do you stop paying property taxes in Delaware?
In Delaware, property taxes are generally paid until the property owner turns 65. That means they can stop paying property taxes at 65.
What is the Delaware tax loophole?
The Delaware tax loophole refers to the state’s lax corporate tax system and favorable tax laws for businesses. It allows wealthy industrialists to avoid paying certain taxes in other states.
What is the cost of retirement in Delaware?
To comfortably retire in Delaware, one will need a little above one million USD in their savings account. The median cost of retirement in Delaware is 1,028,189, ranking 21st in the most affordable state for retirement list.
What are the best places to live in Delaware for retirees?
The best places to live in Delaware for retirees depend on individual preferences and lifestyles. However, some of the popular choices include Wilmington, Rehoboth, Lewes, Dover, Newark, and Middletown.
When is tax season 2024?
The tax season typically begins in January and ends in April. As for tax season 2024, it is likely to begin in January 2024 and the deadline to file individual tax returns would be April 15, 2024. Failure to pay taxes before the due date could result in penalties.
Also, please note that tax-related dates and deadlines can occasionally change, so it’s always a good idea to double-check with the Internal Revenue Service (IRS) or a qualified tax professional.
How long does it take for Delaware tax refund?
The timeframe for receiving a Delaware tax refund can vary. If you file electronically and choose direct deposit, it usually takes 7-10 business days. If you file a paper return, it may take around 8-12 weeks.
What is Delaware franchise tax?
The Delaware franchise tax is an annual tax imposed on businesses that are incorporated in the state of Delaware or have a registered agent in Delaware. It is not related to the common understanding of “franchise” as a business model.
The tax amount varies based on the type of business entity, including corporations, limited liability companies (LLCs), and limited partnerships. The tax is separate from the state’s income tax and must be paid even if the business doesn’t generate income in Delaware.
