Introduction
When preparing for retirement, Americans often find themselves debating a change in location. Whether it is based on family, weather, or something else, many people move across state lines for their retirement. However, one consideration people fail to consider when debating their move is what retirement tax is in place in the state.
There are various forms of taxes that are in play when approaching retirement, including: taxes (if any) on Social Security benefits, capital gains taxes, property taxes, and estate taxes. These differences are key when retirees have income from Social Security, IRAs, 401(k)s, pensions, dividends, and wages.
Some of the best states for retirement taxes include Florida, synonymous with retirees, Nevada, Alaska, Georgia, and more.
Learn for yourself about retirement taxes by state by scrolling the charts.
| State | Retirement Tax Friendliness | Tax on Pensions | Income Tax Rate | Tax on Social Security |
|---|---|---|---|---|
| Arkansas | Not Tax-Friendly | Yes | 2% | No |
| Iowa | Not Tax-Friendly | Yes | 0.33% | No |
| Massachusetts | Not Tax-Friendly | Yes | 5% | No |
| Michigan | Not Tax-Friendly | Yes | 4.25% | No |
| Montana | Not Tax-Friendly | Yes | 1% | Yes |
| New York | Not Tax-Friendly | Yes | 4% | No |
| North Carolina | Not Tax-Friendly | Yes | 4.99% | No |
| Oklahoma | Not Tax-Friendly | Yes | 0.25% | No |
| Oregon | Not Tax-Friendly | Yes | 4.75% | No |
| Rhode Island | Not Tax-Friendly | Yes | 3.75% | Yes |
| West Virginia | Not Tax-Friendly | Yes | 3% | Yes |
| Connecticut | Least Tax-Friendly | Yes | 3% | Yes |
| Indiana | Least Tax-Friendly | Yes | 3.23% | No |
| Kansas | Least Tax-Friendly | Yes | 3.1% | Yes |
| Maryland | Least Tax-Friendly | Yes | 2% | No |
| Minnesota | Least Tax-Friendly | Yes | 5.35% | Yes |
| Nebraska | Least Tax-Friendly | Yes | 2.46% | Yes |
| New Mexico | Least Tax-Friendly | Yes | 1.7% | Yes |
| Utah | Least Tax-Friendly | Yes | 4.95% | Yes |
| Vermont | Least Tax-Friendly | Yes | 3.35% | Yes |
| Wisconsin | Least Tax-Friendly | Yes | 3.54% | No |
| Arizona | Mixed | Yes | 2.59% | No |
| California | Mixed | Yes | 1% | No |
| Colorado | Mixed | Yes | 4.55% | Yes |
| Idaho | Mixed | Yes | 1% | No |
| Illinois | Mixed | No | 4.95% | No |
| Maine | Mixed | Yes | 5.8% | No |
| Missouri | Mixed | Yes | 1.5% | No |
| New Jersey | Mixed | Yes | 1.4% | No |
| Ohio | Mixed | Yes | 2.77% | No |
| Alabama | Tax-Friendly | No | 2% | No |
| Delaware | Tax-Friendly | Yes | 2.2% | No |
| Hawaii | Tax-Friendly | No | 1.4% | No |
| Louisiana | Tax-Friendly | Yes | 1.85% | No |
| North Dakota | Tax-Friendly | Yes | 1.1% | Yes |
| South Carolina | Tax-Friendly | Yes | 0% | No |
| Tennessee | Tax-Friendly | No | 0% | No |
| Texas | Tax-Friendly | No | 0% | No |
| Virginia | Tax-Friendly | Yes | 2% | No |
| Washington | Tax-Friendly | No | 7% | No |
| Alaska | Most Tax-Friendly | No | 0% | No |
| Florida | Most Tax-Friendly | No | 0% | No |
| Georgia | Most Tax-Friendly | Yes | 1% | No |
| Kentucky | Most Tax-Friendly | Yes | 5% | No |
| Mississippi | Most Tax-Friendly | No | 4% | No |
| Nevada | Most Tax-Friendly | No | 0% | No |
| New Hampshire | Most Tax-Friendly | No | 5% | No |
| Pennsylvania | Most Tax-Friendly | No | 3.07% | No |
| South Dakota | Most Tax-Friendly | No | 0% | No |
| Wyoming | Most Tax-Friendly | No | 0% | No |
Retirement Tax Friendliness by State
Alabama
Retirement Tax Friendliness
Tax-Friendly
Ranked in the US
#28
Alaska
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#44
Arizona
Retirement Tax Friendliness
Mixed
2.59%
Ranked in the US
#25
Arkansas
Retirement Tax Friendliness
Not Tax-Friendly
Ranked in the US
#29
California
Retirement Tax Friendliness
Mixed
Ranked in the US
#38
Colorado
Retirement Tax Friendliness
Mixed
4.55%
Ranked in the US
#11
Connecticut
Retirement Tax Friendliness
Least Tax-Friendly
Ranked in the US
#22
Delaware
Retirement Tax Friendliness
Tax-Friendly
2.2%
Ranked in the US
#27
Florida
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#45
Georgia
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#39
Hawaii
Retirement Tax Friendliness
Tax-Friendly
1.4%
Ranked in the US
#35
Idaho
Retirement Tax Friendliness
Mixed
Ranked in the US
#40
Illinois
Retirement Tax Friendliness
Mixed
4.95%
Ranked in the US
#8
Indiana
Retirement Tax Friendliness
Least Tax-Friendly
3.23%
Ranked in the US
#19
Iowa
Retirement Tax Friendliness
Not Tax-Friendly
0.33%
Ranked in the US
#42
Kansas
Retirement Tax Friendliness
Least Tax-Friendly
3.1%
Ranked in the US
#20
Kentucky
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#4
Louisiana
Retirement Tax Friendliness
Tax-Friendly
1.85%
Ranked in the US
#32
Maine
Retirement Tax Friendliness
Mixed
5.8%
Ranked in the US
#2
Maryland
Retirement Tax Friendliness
Least Tax-Friendly
Ranked in the US
#30
Massachusetts
Retirement Tax Friendliness
Not Tax-Friendly
Ranked in the US
#5
Michigan
Retirement Tax Friendliness
Not Tax-Friendly
4.25%
Ranked in the US
#12
Minnesota
Retirement Tax Friendliness
Least Tax-Friendly
5.35%
Ranked in the US
#3
Mississippi
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#14
Missouri
Retirement Tax Friendliness
Mixed
1.5%
Ranked in the US
#34
Montana
Retirement Tax Friendliness
Not Tax-Friendly
Ranked in the US
#41
Nebraska
Retirement Tax Friendliness
Least Tax-Friendly
2.46%
Ranked in the US
#26
Nevada
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#46
New Hampshire
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#6
New Jersey
Retirement Tax Friendliness
Mixed
1.4%
Ranked in the US
#36
New Mexico
Retirement Tax Friendliness
Least Tax-Friendly
1.7%
Ranked in the US
#33
New York
Retirement Tax Friendliness
Not Tax-Friendly
Ranked in the US
#15
North Carolina
Retirement Tax Friendliness
Not Tax-Friendly
4.99%
Ranked in the US
#7
North Dakota
Retirement Tax Friendliness
Tax-Friendly
1.1%
Ranked in the US
#37
Ohio
Retirement Tax Friendliness
Mixed
2.77%
Ranked in the US
#24
Oklahoma
Retirement Tax Friendliness
Not Tax-Friendly
0.25%
Ranked in the US
#43
Oregon
Retirement Tax Friendliness
Not Tax-Friendly
4.75%
Ranked in the US
#10
Pennsylvania
Retirement Tax Friendliness
Most Tax-Friendly
3.07%
Ranked in the US
#21
Rhode Island
Retirement Tax Friendliness
Not Tax-Friendly
3.75%
Ranked in the US
#16
South Carolina
Retirement Tax Friendliness
Tax-Friendly
Ranked in the US
#47
South Dakota
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#48
Tennessee
Retirement Tax Friendliness
Tax-Friendly
Ranked in the US
#49
Texas
Retirement Tax Friendliness
Tax-Friendly
Ranked in the US
#50
Utah
Retirement Tax Friendliness
Least Tax-Friendly
4.95%
Ranked in the US
#9
Vermont
Retirement Tax Friendliness
Least Tax-Friendly
3.35%
Ranked in the US
#18
Virginia
Retirement Tax Friendliness
Tax-Friendly
Ranked in the US
#31
Washington
Retirement Tax Friendliness
Tax-Friendly
Ranked in the US
#1
West Virginia
Retirement Tax Friendliness
Not Tax-Friendly
Ranked in the US
#23
Wisconsin
Retirement Tax Friendliness
Least Tax-Friendly
3.54%
Ranked in the US
#17
Wyoming
Retirement Tax Friendliness
Most Tax-Friendly
Ranked in the US
#51
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