New Mexico is one of the few states where you can easily pay more in tax to the state than the Feds. In fact, it’s not even close.
New Mexico taxes ALL retirement income, to include Social Security.
They do offer a small exemption of $8,000 if you meet certain LOW income thresholds.
So, for simplicity, if you are planning on retiring to New Mexico, just assume ALL of your income will be taxed. The rates aren’t low, either.
Gross income of $50k puts you in the 4.9% bracket.
New Mexico also has the 15th highest sales tax in the nation when factoring in state and localities.
But property taxes are among the lowest in the nation.
So, high income tax, moderately high sales tax, but low property tax.
I like the low property tax. That’s for sure. Property tax planning can minimize to some degree your income tax too.
See the video here.