By Mary Welander
State Rep., D-114
Mary Welander
Establishing a secure future is one goal that that we all share. When you are approaching or experiencing retirement, a secure future takes on a higher priority. I have been hearing from residents for years who want to stay in the community that they raised their families in – close to friends, their houses of worship and community traditions they value, but are unable to because of how the state taxes retirement income.
I am pleased to share that this past year the legislature was able to take some beginning steps that will make it easier for some residents to stay in Connecticut as they retire by keeping as much of their hard-earned savings as possible. We eliminated the state tax on Social Security, pensions and annuities for taxpayers whose federal adjusted gross income is less than $75,000 (for single, married filing separately and head of household) or $100,000 (for married filing jointly).
Additionally, under those same income parameters, beginning in 2023 state taxation on IRAs will begin to be phased out in 25 percent increments. Under the current plan, by 2026 IRAs will not be taxed at all by the state for those eligible earners.
This is a good start, but the eligible income thresholds are too low to truly help the majority of middle-class retirees in our community. I have begun having conversations with my colleagues about introducing a sliding scale of benefits so that someone who earns just slightly over the threshold could still see some benefits and not be cut out entirely.
A thriving and diverse community is one that features residents from all generations. Some of the most active and dedicated community volunteers are those who have retired. If you have ever attended a Living Treasure award ceremony you would be amazed at the decades of service given by so many residents. In fact, many of the organizations that make up the heart of our town are run almost entirely by those who have “stopped working,” yet work incredibly hard.
Losing community members to another state for purely financial reasons means lost opportunities for younger generations to learn our history and to see active modeling of citizenship, not to mention challenges families face when distanced.
I look forward to the opportunity to continue this discussion and work toward supporting secure futures for all residents of our town.
If you have any questions about these new initiatives or suggestions on how to improve this program, please do not hesitate to contact me at mary.welander@cga.ct.gov or 860-240-8354.