by Robert Borges on January 13, 2025
One of the many reasons people opt to retire and settle in fifty-five-plus communities in Georgia is the state’s favorable tax structure. Georgia does not tax Social Security benefits and adopted a flat 5.49% income tax rate in 2024. Also, the Peach State only partially taxes withdrawals from pensions and retirement accounts.
State Tax Considerations
Georgia offers a generous retirement income exclusion. It considers retirement income to be any money received from:
- Pensions
- Annuities
- Interest
- Dividends
- Rental property income
- Capital gains
- Royalties
- Earned income of up to $4,000
Georgia may exclude $35,000 from retirement income tax for individuals who are sixty-two years old or older. The tax-free income threshold jumps to $65,000 per year for those over sixty-five years old.
This exemption may double for couples who file jointly if both qualify individually. Residents who spend only part of the year in Georgia must prorate the exemption.
Other tax relief programs that may be helpful for active adults in Georgia include the military income exclusion, homestead credits, and other age-related exemptions.
Don’t Forget Federal Taxes
If a retiree earns less than $25,000 ($32,000 for couples), they do not owe any federal taxes on their income. According to Intuit, the creators of TurboTax, if your income consists solely of Social Security benefits, you do not need to include the amount on your federal return.
If you have income from a 401(k) or an employer-funded pension, this money is usually taxed as regular income. Distributions from a traditional IRA may or may not be taxed depending on how you originally contributed to the plan. Withdrawals from Roth IRAs are tax-free.
The Internal Revenue Service allows you to move funds between retirement accounts. Consider consulting with a financial advisor to see if moving taxable retirement money into a non-taxable retirement account makes sense for you and your family.
Depending on your age, your retirement plan may require that you make certain minimum deductions. Plan accordingly to have the funds available for any taxes due on these withdrawals.
These thresholds and tax rates are subject to change with new legislation and Social Security insolvency issues.
More Benefits that Make Georgia Attractive for Retirees
In addition to Georgia’s favorable tax environment, other benefits draw active adults to the state and influence how Georgia ranks for retirement in the US.
Georgia's climate is much warmer than that of the northern states, although its mountains are cooler than those of the coastal areas. Other reasons why Georgia is so attractive to retirees include its many outdoor recreational opportunities, gracious hospitality, Southern cuisine, and cultural opportunities.
Do Your Homework
If you want to move to an active adult community in another state, you should research how they tax retirement income. Understanding the tax implications of living in Georgia will help you make a more informed decision to protect your hard-earned retirement savings and income.
When you compare Georgia's tax structure to some of its neighboring states, you might be surprised to discover just how senior-friendly it is. Housing and healthcare are much more affordable than in Florida, a traditional warm-weather haven for retirees.
Learn More About Active Adult Communities in the Peach State
To learn more about living in Georgia, visit the Private Communities portal. PCR is a trusted resource for finding amenity-rich, master-planned lifestyle communities. Our intuitive site helps you find homes that fit your parameters in a community that fits your desired lifestyle.
Our platform profiles nearly two dozen communities in Georgia. Use our search features to narrow down your options. Once you have built a solid shortlist of communities, book a Discovery Package with our PCR team to check out your top spots!
