Massachusetts is moderately tax-friendly for retirees. It fully exempts Social Security retirement benefits and income from public pension funds from taxation. On the other hand, other types of retirement income receive no exemptions or deductions.
Subsequently, how does the Massachusetts state pension work?
Massachusetts State Employee Retirement System (MSERS)
Membership in MSERS is mandatory for all full-time employees with benefits or those working at least half-time with benefits. New employees contribute 9% of gross salary, and 11% on salary over $30,000 up to 64% of the IRS compensation limit.
Furthermore, how can I avoid paying tax on my pension?
Employers of most pension plans are required to withhold a mandatory 20% of your lump sum retirement distribution when you leave their company. However, you can avoid this tax hit if you make a direct rollover of those funds to an IRA rollover account or another similar qualified plan.
Is Massachusetts a good retirement state?
A new report from Bankrate.com puts Massachusetts, snowy winters and all, at No. 7 in its ranking of the best state to retire. The Bay State scores highly in “cultural vitality,” health care quality and well-being for seniors, though it does get dinged for high cost of living and taxes.