Rhode Island Tax Strategy: Ocean State Freedom Planning
Rhode Island has a progressive income tax up to 5.99%. Combined with federal taxes, over 43% can go to government. Section 7702 provides tax-free access to your retirement funds.
The Rhode Island Tax Challenge
Rhode Island's 5.99% top rate combined with federal taxes creates substantial retirement income taxation. The small state has high costs that compound the tax burden.
✅ The Good News
- Beautiful coastal living
- Proximity to Boston job market
- Growing healthcare and education sectors
⚠️ The Challenge
- Top income rate 5.99% on retirement distributions
- Combined state/federal can exceed 43%
- High cost of living statewide
Rhode Island Tax By The Numbers
Section 7702: Your Tax Freedom Solution
Section 7702 of the IRS tax code creates a powerful opportunity: access your retirement funds through policy loans that are completely tax-free—at both federal and state levels. For Rhode Island residents, this means escaping both the state tax burden and federal taxation entirely.
Federal Tax-Free
Policy loans bypass federal income tax entirely. No 22-37% federal tax on your retirement income.
State Tax-Free
No Rhode Island state income tax on policy loans. Your retirement income stays tax-free at the state level.
Rhode Island Professionals We Typically Serve
Maritime Industry Leaders
Shipbuilding and defense contractors
Healthcare Executives
Lifespan and Care New England leadership
Education Professionals
Brown, RISD, and university leaders
Newport Residents
High-net-worth coastal community
Rhode Island Areas We Serve
Matt Nye's Recommendation
"Rhode Island is the Ocean State—and Newport proves the good life exists here. But 5.99% state taxes plus federal means over 43% of your 401(k) goes to government."
"For maritime industry leaders, healthcare executives, and Newport residents, that tax burden is significant. Many leave for Florida. But what about the summers? The sailing? The community?"
"Section 7702 is how you stay in Rhode Island without sacrificing your retirement. Tax-free income means you can afford the Ocean State lifestyle. That is real freedom."
— Matt Nye, 20-Year Industry Veteran
Frequently Asked Questions
How does Section 7702 help Rhode Island residents?
Section 7702 allows you to access retirement funds completely tax-free—avoiding Rhode Island's 5.99% rate plus federal taxes. This can mean 40%+ more retirement income.
I work in Boston but live in Rhode Island. How does this work?
You may owe taxes to both states on some income. Section 7702 provides tax-free retirement income regardless—simplifying your future tax situation significantly.
Newport has extremely high costs. Does tax-free income help?
Absolutely. Tax-free retirement income means more cash flow for Newport living costs. Every dollar saved on taxes supports the coastal lifestyle you have chosen.
Rhode Island is small. Many friends have left for Florida. Should I?
Section 7702 means you do not have to. Tax-free retirement income makes staying affordable. Keep the summers, the seafood, and the friends who stayed.
Ready for Rhode Island Tax Freedom?
Discover how Section 7702 can eliminate both state and federal taxes on your retirement income. Schedule your free analysis today.
Schedule Your Rhode Island Tax Analysis →Free 30-minute consultation. No obligation. No sales pressure.