5 Tax-Friendly States Retirees Should Have on Their List

I admit it. Talking about taxes can be about as exciting as watching the grass grow or the paint dry. No one particularly enjoys paying taxes to Uncle Sam, and why would anyone, with the tax code getting more complicated with each passing year? The Tax Foundation finds that the U.S. tax code is now approaching 10.1 million words, which is good enough for 157 full-length novels. It's enough to make the average American swear off learning anything about the U.S. tax system.

Nevertheless, understanding how federal taxation can affect you is critical to all Americans -- especially those who are entering retirement or are already retired. Retirees these days are living longer than ever, with the average 65-year-old expected to live more than 20 additional years, according to the Social Security Administration. That means they need to ensure their nest egg is set up in such a way as to last throughout retirement. Investing and generating income through dividends, bonds, and CDs is one way to build wealth. But just as important is tax-planning, which reduces your taxable income during retirement.

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Source: Fool.com