A.L. is 1 of Top 10 tax-friendly cities in Minn.
Austin is listed in study as No. 5
Albert Lea was included in a Top 10 list of the most tax-friendly places for retirees in Minnesota in a recent study.
Albert Lea finished in 10th place in the study taken by SmartAsset, a New York-based financial technology company. The company said the study takes into account the effect local taxes would have on a retiree with a $50,000 income. Under the scenario, $15,000 of the income would be from Social Security benefits, $10,000 from a private pension, $15,000 from retirement savings and $10,000 in wages.
The company said to calculate the expected income tax, the person would pay in each location it applied deductions and exemptions. It then calculated how much the person would pay in income tax at the federal, state, county and local levels.
The company said for each location it determined whether Social Security income was taxable. Using Census data, it identified the median property taxes paid by homeowners in each place and then ranked and indexed the cities by income tax paid and property tax paid.
An overall index was then created to capture the taxes that most affect retirees. Income tax was given the most weight, followed by Social Security income taxability, then property tax paid.
Austin was named fifth in the state in the study.
The study included 86 communities in Minnesota and more than 4,600 nationwide. According to SmartAsset, all cities the company had data for were included.
Larry Baker, 2nd Ward councilor, said Albert Lea’s placement is an indication of the success of the city’s approach.
“We’re trying to get all of the infrastructure stuff done, and we’re being aggressive,” Baker said. “We’re also trying to invest in the community and when this news comes out, it shows what we are doing is working.”
The Top 10 cities statewide in the ranking were as follows:
3. International Falls
6. Fergus Falls
10. Albert Lea
Albert Lea finished in 4,541st place nationally.
Six of the Top 10 nationally-ranked cities on the list were in Texas. Each of the Top 10 cities nationwide had no Social Security taxes.
Albert Lea was listed as No.3 in a listing of Top 10 affordable small towns where people would actually want to live in a Realtor.com survey released last week.
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