How to pay for your retirement in Delaware

  • August 1, 2021

The state’s public pensions are set to see a big change next year.

The Delaware State Pension Board voted to start taxing vested pensions starting in January.

They will be taxed at the same rate as regular pensions starting Jan. 1, 2019, the board said in a statement on Friday.

Under current law, the Delaware State Retirement System pays retirees the amount of their pension at which they started working.

But starting Jan, 2019 all employees will pay the same amount of taxes, the state’s pension board said.

That means that anyone who started at a lower rate than they are now, and then earned more, would be able to start paying less tax.

Currently, only about 20 percent of Delaware’s public employees have pension taxes.

The pension board also said that in 2019, state and local governments will pay about the same level of taxes as they do now, with the average rate of 4.5 percent.

The change will be a major shift for Delaware, which has been a bastion of the wealthy.

But many of the state employees who earn more than $100,000 annually will still pay more than their private sector counterparts.

“The board believes that this will be an equitable solution, but has not yet been finalized,” the board wrote.

The state has been trying to increase its contributions to its public pensions for years.

The current system pays about 20.6 percent of its payroll to the state, with many of those payments being due in the form of higher-rate pensions.

Since its inception in 1996, Delaware has been under an 18 percent payroll tax, which is part of the reason that the state is among the least generous in the country when it comes to paying for pensions.

The current system of pension taxes is also set to expire at the end of 2019, but that will not happen until 2028.

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