The Redlands Ranks Number One in Colorado Tax-Friendly For Retirees 2018
We knew the Grand Valley was a great place to live, but now we three more reasons! According to SmartAsset’s recent study on places in the country with tax policies that are most favorable to retirees, three areas in the Grand Valley rank in the top 10 for Colorado! The Redlands placed first for being tax-friendly for retirees. The Redlands, which is the most popular community in Grand Junction because of the spectacular views, outdoor recreation, two golf courses and a range of home choices just gave you one more reason to move to the Redlands.
The financial company SmartAsset, analyzed sales, property, income, fuel and Social Security tax data to rank locations in Colorado on how friendly they are for retirees. The Redlands took the top spot on the list, with Fruitvale ranking fifth and Orchard Mesa also making the list at number nine.
#1 Redlands Tax-Friendly For Retirees
| Rank | City | Income Tax Paid | Property Tax Rate | Sales Tax Paid | Fuel Tax Paid | Social Security Taxed? | Retirement Tax Friendliness Index |
|---|---|---|---|---|---|---|---|
| 1 | Redlands, CO | $6,345 | 0.49% | $443 | $163 | Taxed | 60.21 |
| 2 | Cañon City, CO | $6,345 | 0.54% | $443 | $140 | Taxed | 60.10 |
| 3 | Lochbuie, CO | $6,345 | 0.50% | $443 | $175 | Taxed | 59.90 |
| 4 | Security-Widefield, CO | $6,345 | 0.51% | $443 | $180 | Taxed | 59.66 |
| 5 | Fruitvale, CO | $6,345 | 0.51% | $443 | $181 | Taxed | 59.60 |
| 6 | Black Forest, CO | $6,345 | 0.50% | $443 | $186 | Taxed | 59.60 |
| 7 | Stratmoor, CO | $6,345 | 0.52% | $443 | $176 | Taxed | 59.60 |
| 8 | Cimarron Hills, CO | $6,345 | 0.52% | $443 | $178 | Taxed | 59.53 |
| 9 | Orchard Mesa, CO | $6,345 | 0.52% | $443 | $203 | Taxed | 59.07 |
| 10 | Woodmoor, CO | $6,345 | 0.57% | $443 | $174 | Taxed | 59.03 |
| CO | $6,345 | 0.52% | $738 | $162 | Yes |
If you would like to know more about the Redlands and see available homes for sale.
Methodology Our study aims to find the areas with the most tax-friendly policies for retirees. To do that we looked at how the tax policies of each city would impact a retiree with a $50,000 income. Our hypothetical retiree is getting $15,000 from Social Security benefits, $10,000 from a private pension, $15,000 from retirement savings like a 401(k) or IRA and $10,000 in wages.
To calculate the expected income tax this person would pay in each location we applied deductions and exemptions. This included the standard deduction, personal exemption and deductions for each specific type of retirement income. We then calculated how much this person would pay in income tax at the federal, state, county and local levels.
We calculated the effective property tax rate by dividing median property tax paid by median home value for each city.
In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a city by the household income less income tax. This product is then multiplied by 35% to estimate the sales tax paid.
For fuel taxes, we first distributed statewide vehicle miles traveled down to the city level using the number of vehicles in each county. We then calculated miles driven per capita in each city. Using the nationwide average fuel economy, we calculated the average gallons of gas used per capita in each city and multiplied that by the fuel tax.
For each city we determined whether or not Social Security income was taxable.
Finally, we created an overall index weighted to best capture the taxes that most affect retirees. We gave a 4x weighting to income tax, 3x weighting to property tax rate, a 2x weighting to sales tax and 1x weighting to fuel tax.
Sources: Internal Revenue Service, Social Security Administration, state websites, local government websites, US Census Bureau 2016 American Community Survey, Avalara, American Petroleum Institute, GasBuddy, UMTRI, Federal Highway Administration
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Data and informttion courtesy of SmartAssets
