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Making Your Money Last

7 States That Won't Tax Your Income

Retiring to a state with no income tax can keep more money in your wallet.

You work hard for your money, so it makes sense to keep as much of it in your pocket as you can once you stop working. Minimizing the taxes you pay on your income in retirement can help.

See Also: 15 Worst States for Taxes on Retirees

Seven states—Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming—don’t tax income, including pensions, Social Security and other forms of retirement income. Two other states, New Hampshire and Tennessee, only tax dividend and interest income.

The absence of an income tax can make a state an attractive place to live in retirement. After all, warm weather isn’t the only reason retirees flock to Florida.

But what some states give up in income tax they make up for in other ways. Washington, for example, has some of the highest sales taxes in the nation, and Texas levies some of the highest property taxes.

Consider a state’s total tax picture to judge its true tax-friendliness for retirees. Kiplinger’s tax maps can help.