Retiring to the Philadelphia suburbs

Will Pennsylvania's tax savings cover the inheritance tax?

Pennsylvania doesn't tax your Social Security, and once you're retired it generally doesn't tax your pension or IRA money. When you pass, though, it takes 4.5% of what goes to your adult kids. Put in your own numbers and see how many years of savings it takes to cover that bill, compared with staying where you are.

Built by Jim Stevenson, Realtor, from the Living in the Philadelphia Suburbs YouTube channel Tax rules as of
Try an example couple:
Where you're coming from

Example loaded: the retired couple from the video. Replace any number with your own.

Filing status
Most Maryland counties charge 2.25% to 3.3%. Montgomery is 3.20%.
We don't have a built-in estimate for this state, so enter what you pay below.
Yearly income in retirement

Household totals, before taxes.

Most suburban towns charge about 1% on wages. It doesn't apply to retirement income.
Matters in New York, New Jersey, Maryland and Delaware, where some breaks are per person.
Know your actual state income tax? Use it instead of our estimate
From last year's state return. Leave out any local or county tax unless it goes away when you move.
Your house

Use real bills. Pennsylvania counties still tax off old assessments, so tax rates don't compare well across the state line.

The full yearly bill, before any rebates.
Use the bill on a listing you like, or estimate it from a price below.
Stay NJ is for homeowners 65 and older. Only 2 of next year's 4 payments are funded so far. Senior Freeze isn't modeled, so if you get it, enter your bill after the freeze.
Things like Connecticut's car tax or lower insurance and utilities. Use a minus sign if something costs more here.
What you'd leave your family

What you expect to have when the second of you passes, in today's dollars.

Taxed by Pennsylvania when the owner was past 59 and a half.
These come off before the tax.
Not taxed by Pennsylvania.
Pennsylvania doesn't tax it, but that state's rules apply.
20 years
Until the second of you passes. Someone moving at 67 who lives to 87 is 20 years.
Years of savings to cover the tax -
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This calculator gives estimates for education only. It isn't tax, legal or financial advice. Federal taxes are left out because they're the same in both states. Talk to a CPA or a Pennsylvania estate attorney about your own situation.
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