13 States With No Retirement Tax Ranked by How Much You Need to 'Retire Comfortably'
A $0 state income tax bill doesn’t always mean a cheaper retirement. See which states stretch your dollar further.
How much do I need to retire? That's the "magic" question for many people. According to the 2026 Northwestern Mutual Planning and Progress Study, the average American now believes they need $1.46 million to "retire comfortably" — a 15% jump from last year.
However, that number isn't fixed. Life expectancy tables, family dynamics, cost-of-living estimates, and even the nation's political climate can all affect your finances in retirement.
But one area retirees often overlook is state-level taxation. Where you choose to park your retirement can drastically change how much you need to save.
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Here are the 13 states that do not tax retirement income (distributions from 401(k)s, IRAs, Social Security benefits, etc.), ranked by the estimated total savings needed to live comfortably.
Note: Regardless of state laws, federal income taxes still apply to most retirement distributions.
Estimated retirement savings needed ranked by state in 2026
To determine how much in retirement savings you need to "retire comfortably" in each state, Kiplinger used the list of states with no retirement taxes.
Then, data from the North American Community Hub Statistics (NCH Stats), which was sourced from the Social Security Administration (SSA), the Employee Benefit Research Institute (EBRI), and global retirement trends, was used to calculate the "estimated savings needed per state" amounts.
Median property taxes paid in each state were referenced from Property Shark, which utilizes the latest information from the U.S. Census Bureau. The national average property tax bill for 2026 is $3,119.
Cost-of-living analysis was pulled from the Missouri Economic Research and Information Center (MERIC) index scores.
Yet it's important to note that family size, annual income, retirement age, and other factors can influence the retirement savings needed for an "affordable" retirement. Each individual's needs differ, so consult a tax professional when necessary.
1. Mississippi: Low cost of living and no retirement taxes
Median property taxes paid: $1,215
Estimated savings needed: $730,000
Mississippi is the most "comfortable" state on this list. The Magnolia State exempts qualified retirement distributions from the state's 4% flat tax on other forms of income. With property taxes roughly 39% below the national average bill, it is the only state here where a nest egg of less than $750k is truly viable for a comfortable retirement.
The trade-off: While your dollar stretches further on groceries and utilities, Mississippi ranks lower in national healthcare performance compared to most other states.
Should you retire in the Magnolia State? Retirees moving from high-cost states who want to maximize their liquid cash might find Mississippi ideal, provided they don't require specialized or frequent medical care.
2. South Dakota: No state income tax and older adult tax freezes
Median property taxes paid: $2,724
Estimated savings needed: $790,000
South Dakota has no state income tax, meaning interest, dividends, and retirement distributions are all state tax-free. An older adult assessment freeze helps some homeowners 65 and older lock in home values for tax purposes, which could keep your property tax bill closer to the median of around $2,724.
The trade-off: South Dakota is known for severe weather, and rural areas offer limited access to major cultural hubs. However, the state has recently seen an expansion in healthcare quality in metro areas like Sioux Falls.
Should you retire in the Mount Rushmore State? If you seek a quiet, budget-conscious lifestyle and can handle the cold, South Dakota may offer some of the best wealth-preservation tax laws in the country.
3. Iowa: Low housing costs and no retirement tax
Median property taxes paid: $2,897
Estimated savings needed: $800,000
Although Iowa has a flat tax for workers, retirement income (including 401(k) and Social Security) is 100% exempt for those 55 and older. The estimated savings needed are around $800,000, likely due to Iowa's cost of living, which is approximately 10% lower than the national average, per the latest data from MERIC.
The trade-off: Iowa ranks high for severe weather risks, particularly tornadoes. The cost of living may be relatively low, but property taxes are slightly higher than in neighboring states, South Dakota and Missouri.
Should you retire in the Hawkeye State? Retirees looking for a middle-American lifestyle alongside low housing costs could find Iowa a hidden gem.
4. Tennessee: Low property taxes and no income tax
Median property taxes paid: $1,442
Estimated savings needed: $810,000
Tennessee may offer one of the lowest tax burdens in the country, ranking #4 on our list. With no state income tax and property taxes up to 73% lower than the national average, retirees may be able to live comfortably on a much smaller nest egg than the $1.46 million average cited in the Northwestern study.
The trade-off: To compensate for the lack of income tax, Tennessee has a high state sales tax (7%). Rising housing costs in popular hubs like Nashville are also pricing out some newcomers.
Should you retire in the Volunteer State? If you want a state that has four distinct seasons and a vibrant cultural scene accompanied by less of an income "tax bite," Tennessee may be the retirement spot for you.
Related: 10 Cheapest Places to Live in Tennessee.
5. Wyoming: Low property tax bill and no retirement taxes
Median property taxes paid: $1,767
Estimated savings needed: $810,000
Wyoming is frequently ranked as one of the most tax-friendly states for retirees. Beyond the 0% retirement income tax, the state has a low sales tax of 4% (among the lowest in the U.S.) and relatively cheap property tax bills, with a median of just $1,767.
The trade-off: Wyoming is the least populous state, meaning public transportation and specialized healthcare might be scarcer outside of urban centers. You'll likely need to be comfortable committing to longer drives for amenities.
Should you retire in the Equality State? It may be perfect for adventurous retirees who prioritize tax savings and outdoor access over city living and mild weather.
6. Texas: affordable living and world-class healthcare
Median property taxes paid: $4,232
Estimated savings needed: $890,000
Texas's lack of income tax is a major draw, but it makes up for the lost revenue through property taxes. The Lone Star State has one of the highest effective property tax rates in the country, per the Tax Foundation, which helps push the "comfortable" savings requirement toward the $900k mark.
The trade-off: While healthcare in cities like Houston may be considered particularly high-quality, overall performance and healthcare access in Texas are usually ranked poorly in national rankings. Plus, the property tax burden can be a shock for those moving from states that have lower real estate tax levies.
Should you retire in the Lone Star State? Texas may be best for retirees who want an active lifestyle and who don't mind trading an income tax for a larger annual property tax bill.
Related: 10 Cheapest Places to Live in Texas.
7. Pennsylvania: Tax-friendly for retirees, but watch the 'death tax'
Median property taxes paid: $3,311
Estimated savings needed: $900,000
Pennsylvania generally exempts most retirement income from state taxes for residents 60 and older. The overall cost of living is roughly 3% lower than the national average, per MERIC, and lower-income older adults may qualify for the Pennsylvania property tax and rent rebate program.
The trade-off: Pennsylvania is one of the few states that still imposes an inheritance tax ranging from 0% to 15%. So even though you save during your lifetime, your heirs may pay for it later.
Should you retire in the Keystone State? Pennsylvania might be a solid choice for retirees who want access to East Coast amenities and top-rated hospitals without the high price tags of New York or New Jersey, yet the state tax on heirs can be high.
8. Nevada: No income, estate, or inheritance taxes
Median property taxes paid: $2,027
Estimated savings needed: $920,000
Nevada's estimated savings secure it a #8 ranking on our list. With no state income tax and reasonable property taxes, the Silver State may be a haven for those looking to keep more of their nest eggs compared to other states later on this list.
The trade-off: Nevada's cost of living has become closer to the national average in recent years, per MERIC data. This means that while there is no state income tax, daily expenses — from utilities to dining out — can be higher than in the southeastern or midwestern states.
Should you retire in the Silver State? You might move to Nevada if you're a retiree who wants warm weather and no state-level income taxes, but be prepared for perhaps a higher baseline for everyday expenses than you're used to (depending on where you currently live).
9. Florida: Rising insurance costs offset tax savings
Median property taxes paid: $2,730
Estimated savings needed: $950,000
Florida was once the clear winner for retirees, so it may come as a surprise that the Sunshine State ranks lower on this list. Although there is no state income tax and overall property tax bills can be relatively low, Florida is currently facing a homeowners' insurance crisis, with some premiums having tripled in some areas.
The trade-off: Intense summer heat and high insurance costs are driving a trend of "half-backs," or retirees who move halfway back north to avoid Florida's rising cost of living.
Should you retire in the Sunshine State? If you have a larger nest egg and can afford the insurance premiums, the state income tax-free environment and social communities are still hard to beat for retirees.
Related: 10 Cheapest Places to Live in Florida.
10. Illinois: High taxes on everything but retirement
Median property taxes paid: $5,298
Estimated savings needed: $970,000
Illinois can be a bit of a tax paradox. The Prairie State has some of the highest property and state sales taxes in the nation, yet it can be more tax-advantageous to retirees, exempting almost all retirement income from it's 4.95% flat tax.
The trade-off: The median property tax bill of over $5,000 is a high recurring cost. You'll need a nest egg close to the national average ($971,000, per NCH Stats) just to maintain a standard lifestyle in Illinois.
Should you retire in the Prairie State? Illinois may be ideal for those who want the urban amenities of Chicago (including top-tier health care), provided you are comfortable paying a high annual property tax bill.
11. New Hampshire: No sales tax, yet high property costs
Median property taxes paid: $6,667
Estimated savings needed: $1,113,994
New Hampshire recently phased out its tax on interest and dividends, making the Granite State completely income-tax-free. However, a median property tax bill of $6,667 means New Hampshire living may require a much larger nest egg to cover basic expenses.
The trade-off: There is no state sales tax, which is a major perk for shoppers. But the cost of living remains much higher than the national average, according to MERIC.
Should you retire in the Granite State? Native New Englanders who want to stay close to home while keeping their zero state income tax will benefit, though out-of-state movers might find the entry costs steep.
12. Washington: High costs for a high-active lifestyle
Median property taxes paid: $4,556
Estimated savings needed: $1,145,540
Washington has no state income tax, though a controversial capital gains tax now affects high earners. For the average retiree, the tax environment might be friendly, but the Pacific Northwest housing market pushes the "comfort" threshold past $1.14 million.
The trade-off: Washington's cost of living is roughly 13% higher than the national average, per MERIC data. Even though mountainous scenery may be beautiful, your retirement distributions won't go nearly as far as they would in the south.
Should you retire in the Evergreen State? If you have a robust nest egg and value an active, outdoor-focused lifestyle, Washington's amenities might justify the higher cost of entry, but it's certainly not for everyone.
Related: 10 Cheapest Places to Live in Washington.
13. Alaska: The most expensive 'tax-free' state
Median property taxes paid: $738
Estimated savings needed: $1,292,753
Alaska has no state income or sales tax, and residents actually receive an annual Dividend Payment. But due to the high cost of importing goods and expensive healthcare, you need nearly $1.3 million to retire comfortably here.
The trade-off: While property taxes are low (residents 65 and older may get a $150,000 exemption), the price of groceries and utilities is the highest among all no-income-tax states.
Should you retire in the Last Frontier? Only the truly adventurous who have saved significantly above the national average and can handle the geographic isolation might consider a retirement in Alaska.
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