How is Nevada for Retirement?
Learn how Nevada is for retirement, how it taxes retirement income, and the pros and cons of retiring in the state.
Are you dreaming of retiring in a warm climate, with plenty of entertainment and outdoor recreation opportunities? Nevada may be perfect for you. Nevada seamlessly blends good entertainment options, friendly communities, and a low cost of living to make it appealing to retirees.
Nevada is a good state for retirement due to its retiree-friendly tax system, good weather, and affordable lifestyle. It is one of the states with no state income taxes, and you won’t owe any state income taxes on your retirement income. Hence, any income from Social Security, pensions, TSP, 401(k), IRA, or other retirement plans is not taxed. Also, property taxes in Nevada are below the national average, and a typical homeowner pays about $1,807 annually in property taxes.
Is Nevada Tax-Friendly for Retirement?
Nevada is one of the states that does not have a state income tax, and this means it is possible to live off Social Security as your primary source of retirement income. Retirement incomes such as Social Security, public pensions, private pensions, as well as withdrawals from 401(k) and other retirement savings plans are not taxable at the state level. The state is ranked No. 7 for the top tax-friendly destinations in the US.
While there are no income taxes at the state level, you will still owe federal income taxes on your retirement income. If you are planning to retire in Nevada prior to your retirement date, you may want to review your retirement plan to reduce your future federal tax burden.
How Much Are Sales Taxes in Nevada?
The state sales tax rate in Nevada is 6.85%, while local sales taxes range from 0% to 3.35%. The total state and local sales taxes can go up to 8.23%. While the sales tax rate is slightly higher than the national average, some key exclusions benefit seniors.
Items such as medical equipment (prosthetics and wheelchairs), prescription medication, newspapers, and basic groceries are exempted from state sales taxes.
The state’s gasoline tax is reasonably low at $0.23c a gallon. However, Nevada does have some strict ‘sin taxes’ on items like tobacco and alcohol if you indulge. There are no inheritance or estate taxes in Nevada.
How Much Are Property Taxes in Nevada?
Property taxes in Nevada are relatively low. The average effective property tax rate in Nevada is 0.48%, almost half the national average of 0.99%. This will vary a little by county and city. For example, in Eureka County, the average property tax per year is only $369. Douglas County is one of the highest, at an average of $2,334, while the average across the state is $1,800.
Nevada does not have a special homestead property tax exemption for seniors. However, there are situation-specific programs on offer that may benefit you in retirement. This includes exemptions for veterans, disabled veterans, and those with visual disabilities, among many more.
The pros of retiring in Nevada
From the casinos of Las Vegas to the spectacular natural sights dotting the state, Nevada has plenty to offer those looking for an active retirement. National parks abound, and there are plenty of outdoor experiences to enjoy. If you prefer to socialize, have fun, and enjoy, the nightlife is great and you will never be short of things to do.
Both warm and dry, the winters in Nevada are particularly appealing, and the transitional seasons are great too. You can leave the snow behind entirely.
Focused senior living
Nevada boasts several areas entirely focused on senior living, with the sorts of amenities, social offerings, and medical care that most appeal to older citizens. They even have some dedicated retirement communities and 55+ communities.
Cost of living and tax
The cost of housing, utilities, transportation, groceries, and healthcare is generally affordable, and it falls below the national average. Property prices in Nevada are relatively low, and the latest median home value is around $291,800. With no income tax charged on retirement income and other expenses being reasonably low, Nevada is well worth considering for retirement.
If you are hoping to fund your retirement and leave something for your descendants, the lack of inheritance and estate tax will be particularly appealing.
The cons of retiring in Nevada
With its near-desert climate, Nevada provides a lot of warmth and mild winters. However, they’re offset by often scorching summers that may not appeal to every retiree.
Easy Gambling Access
If you’re looking for a fun flutter here and there, this won’t be a con for you. However, as you’d expect from a state hosting some of the US's largest casinos, there's a lot of temptation to over-indulge, and that's not wise for retirees with a limited budget.
The sales tax in Nevada is higher than average, aimed at the extensive tourism market they service. Depending on where you want to retire, you may find the ‘tourist trap’ phenomenon affecting prices- but it is offset by wonderful tax benefits in other areas.
Of the 50 states, Nevada is ranked among the worst states for primary healthcare and 38th overall, which isn’t that appealing for senior citizens who want to retire in a state with easy access to quality healthcare. However, since Nevada also has some senior-focused areas, you could consider these to offset this con. Additionally, Medicare premiums are appealingly low, so this is a bit of a gray area.
While mainly concentrated in tourist-heavy areas, Nevada has a higher violent crime rate than many other US states, and this is worth considering when choosing where to retire in Nevada.
Best Places to Retire in Nevada
Nestled in the gorgeous Carson Valley, Gardnerville offers a softer climate than many other parts of Nevada. The mountain views are spectacular. This is a town with a close-knit community and excellent access to classic outdoor activities like fishing and hunting.
Mesquite is a good option for retirees who want a quiet retirement, but want to leverage the tax benefits of retiring to Nevada. The community here is strong, and there are excellent golfing estates in the area. The city is in a desert area but retains a quaint charm and quietly peaceful lifestyle many will enjoy.
Despite being known as a destination for entertainment and casinos, Laughlin has a lot to offer seniors. From affordable housing options to a wealth of recreational activities and a kind community, there’s a lot to enjoy. Since it lies on the Colorado River, Laughlin’s summers are slightly less punishing, too.
The state capital, Carson City has some of the best medical facilities and other amenities in Nevada. Despite its modern amenities, it retains some fantastic history, and there are plenty of cultural events and other fun activities to explore. If you’re looking for a more vibrant retirement in a pumping town with great access to the wider state, this could be the place for you.