10 Least Tax-Friendly States for Retirees

Retirees in these states are likely to have a higher overall state and local tax burden than retirees in other states.

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Most people have a dream home in mind for retirement. It might be a quaint beach house, a log cabin deep in the woods, or a penthouse high in the sky. But no matter where you plan to live during your golden years, make sure you check out the local tax situation in your dream destination before packing your bags and relocating. If you don't, and you end up in one of the least tax-friendly states for retirees, you might end up with a hefty state and local tax bill.

State and local taxes can vary greatly from one place to another. The difference can easily exceed $10,000 or more per year for some people, which is enough to break the bank for a lot of seniors if you wind up in one of the worst states to retire in for taxes. To avoid this kind of bombshell, do your homework before settling on a new location. You can start with our State-by-State Guide to Taxes on Retirees (opens in new tab). This tool maps out the tax landscape for each state and the District of Columbia.

We also identified the 10 least tax-friendly states for retirees, which are listed below (we saved the worst state for last). Our results are based on the estimated state and local tax burden in each state for two hypothetical retired couples with a mixture of income from wages, Social Security, 401(k) plans, traditional and Roth IRAs, private pensions, interest, dividends, and capital gains. One couple had $50,000 in total income and a $250,000 home, while the other had $100,000 of income and a $350,000 home. Take a look to see if your state — or the state you've been dreaming about for retirement — made our list of the "least tax-friendly" states for retirees (we hope it didn't).

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A complete description of our ranking methodology and sources of information is at the end of this article.

David Muhlbaum
Senior Online Editor, Kiplinger.com

In his current role as Senior Online Editor, David edits and writes a wide range of content for Kiplinger.com. With more than 20 years of experience with Kiplinger, he has worked on and written for a range of its publications, including The Kiplinger Letter and Kiplinger’s Personal Finance magazine. He is a co-host of Your Money's Worth, Kiplinger's podcast and has helped develop the Economic Forecasts feature.