Rhode Island Retirement
The best thing about retiring in Rhode Island is the state's location. The nation's smallest state offers a quiet middle class lifestyle that is only a short drive or train ride from Boston and New York City. Rhode Island residents can take advantage of all the amenities of the big cities, such as museums, shopping, and sports, without having to actually live in a busy urban setting.
Rhode Island is a high cost of living state. The average house in Rhode Island cost around $198,400 in 2011 according to zillow.com. That is lower than in neighboring Massachusetts, where the average house cost $275,300 in 2011, and Connecticut, where the average house cost $237,900 in 2011.
The average price of gasoline in Rhode Island is about ten cents higher than the national average. However, Rhode Island residents save money by driving less than most Americans because their state has more transportation options. The biggest city, Providence, is connected to Boston by commuter rail service, and the state's major airport, T.F. Green, is served by commuter rail as well. Providence is also on the Northeast Corridor high-speed rail line that provides a direct connection to New York, Boston, Philadelphia, Baltimore, and Washington DC. 38 of the 39 communities in the state are on the bus routes operated by the Rhode Island Public Transit Authority.
Rhode Island Income Tax
Rhode Island has a low personal income tax. The rate for all filers is 3.75% for persons making less than $55,000 a year, 4.75% for persons making $55,000-$125,000 a year, and 5.99% for persons making more than $125,000 a year. This income tax rate is lower than in Massachusetts and Connecticut.
Rhode Island has no tax deductions for retirement income but allows taxpayers a high personal deduction. The deduction for a single person or a married person filing separately is $7,500. The deduction for a married couple filing jointly is $15,000, and the deduction for a person filing head of household is $11,250. There are no deductions for taxpayers that make more than $195,000 a year.
Rhode Island Sales Tax
Rhode Island collects a 7% state sales tax. This tax covers internet and cable TV so those services will cost more in Rhode Island. Taxes on some items are higher in Rhode Island restaurants collect the regular 7% sales tax and an extra 1% local meals and beverage taxes. That means the tax on a meal in a restaurant is 8%.
Not every retail sale is covered by the sales tax. Food purchased from stores, drugs, clothing, and many other everyday purchases are exempt. The sales tax applies to all purchases of electronics, appliances, antiques, and computer software.
Rhode Island Property Tax
Property tax rates in Rhode Island can vary widely because of local levies. The average property tax rate in the state was $15-$16 per $1,000 of assessed value. Some of the smaller towns had much lower property tax rates. The rate on Bock Island was only $4.58 per $1,000 value of assessed value while the rate in Providence $30 per $1,000 of assessed value.
Rhode Island offers retirees a slightly lower cost of living and lower tax rates than most of New England. It also has a unique location that provides a small town lifestyle close to some of the nation's largest cities.
|Cost of Living Rank:||#43|
|Income Tax:||3.75% - 5.99%|