State-by-State Guide to Taxes on Retirees

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last updated 22 October 2024

There are several factors to consider when deciding where to relocate once you retire, and state tax on retirees is probably one of them. After all, taxes don’t stop once you leave the workforce, and high-tax states can drain retirement savings faster than states with lower taxes.

Additionally, overall tax burdens can vary significantly from one state to another. That’s why Kiplinger created this state-by-state guide to taxes in retirement.

The interactive map below highlights the most and least tax-friendly states for retirees. You can also use the map to navigate to our state tax guides which include detailed information about income, sales, property, gasoline, estate, and other taxes that impact retirees in each of the 50 states and the District of Columbia.

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This information may help you compare taxes for retirees by state.

Tax map

Kiplinger's tax map for retirees

Our ranking for the most tax-friendly states for retirees is based on two major factors.

Only states that don't tax retirement benefits were considered.

Of those 13 states, the 10 with the lowest median property taxes paid were chosen.

For our ranking for the worst states to retire in (which place the highest tax burden on retirees), we considered states that still tax Social Security retirement benefits for single filers with an adjusted gross income (AGI) below $75,000.

Then, we factored in states with the highest median property tax bills.

Retirement Taxes

Retiree taxes: What else you need to know

How the IRS Taxes Retirement Income: Provides a breakdown of common sources of income and information on the federal tax treatment of each. This information can help you develop a tax-efficient strategy for your retirement years.

Taxes in Retirement: How All 50 States Tax Retirees: Provides an overview of how income from employment, investments, a pension, retirement distributions and Social Security are taxed in every state.

10 Most Tax-Friendly States for Retirees: Knowing which are the most tax-friendly states for retirees may help you make your decision. Just keep in mind that no state has zero taxes. So, where some types of taxes are low, other types may be high. Considering the pros and cons of state taxes will provide you with the best overall tax picture.

States That Don't Tax Retirement Income. Moving to one of the states that don’t tax retirement income might be one way to pay less taxes in retirement. Some states tax only some types of earnings while others don't tax income at all. If your retirement income includes Social Security benefits, distributions from a 401(k) or IRA, or a pension, you won't see a tax bill from the states on this list.

Worst States to Retire in Due to Taxes: If a primary concern as you consider your retirement destination is saving money on taxes, the places on this list are the worst states to retire in. That's because high property taxes and taxes on traditional types of retirement income, like Social Security, pensions and distributions from a 401(k) or IRA, make these states more expensive than most for many retirees.

15 States That Don't Tax Pension Income: Most states tax at least a portion of the income from many retirement benefit plans. Your state might have a pension exclusion, but chances are it's limited based on your age and/or income. However, some states don't tax pension income no matter your age or how much money you have.

Most Expensive States for Retired Military Service Members: You can’t avoid paying federal tax on your military retirement pay since the IRS taxes that income as a pension. But you might be able to escape a state tax bill — as long as you don’t retire in one of the places on this list.

State tax guides

See the full tax picture by state

Article sources

Tax map sources: Data for state tax guides is gathered from several sources including the U.S Census Bureau, state government websites, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.

See our Tax Map for Retirees Methodology

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.