Top 10 Most Tax Friendly States for Retirees

Retirees often seek states that offer favorable tax conditions to maximize their retirement income. Based on 2024 data, here are the top 10 most tax-friendly states for retirees, with some key statistics and considerations for each:

  1. Alaska: Alaska stands out with no state income, estate, or inheritance tax, making it highly attractive for retirees. The lack of a sales tax further enhances its appeal, though retirees should consider Alaska’s unique climate and remote location.
  2. Delaware: Despite its higher income tax rate (up to 6.60%), Delaware compensates with no sales tax and favorable property tax rates. Social Security income is exempt, and pension income enjoys certain exemptions, making it a financially savvy choice for retirees.
  3. Wyoming: Wyoming is appealing due to the absence of state income, estate, and inheritance taxes. A low sales tax rate (5.22%), exemption on groceries and prescription drugs, and one of the lowest property tax rates in the country make it an excellent choice for retirees.
  4. Florida: Known for its warm climate and retirement communities, Florida offers no state income, estate, or inheritance taxes. Social Security, pensions, and income from retirement accounts are not taxed. Sales tax is average, but property taxes are reasonable, making Florida a perennial favorite among retirees.
  5. New Hampshire: New Hampshire boasts no state income or sales taxes, and no taxes on Social Security or pension income. However, it’s important to note its relatively high property tax rates.
  6. South Dakota: In South Dakota, there’s no state income tax, meaning Social Security, pensions, and other retirement income are not taxed. The state has a lower-than-average sales tax, though property taxes are around the national average.
  7. Louisiana: Louisiana offers low property tax rates and recently lowered income tax rates. Social Security and government retirement plans are tax-exempt, and there’s a partial exemption for pension income.
  8. Nevada: Nevada has no state income tax and exempts Social Security and pension income from taxation. Property taxes are below the national average, but the state’s sales tax is relatively high.
  9. North Carolina: North Carolina does not tax Social Security retirement benefits, but other retirement income is taxable. The state has average property and sales taxes, and no estate or inheritance taxes.
  10. Mississippi: Mississippi is appealing for its exemption of Social Security benefits and other retirement incomes like pensions from state tax. Property taxes are relatively low, contributing to its tax-friendly status for retirees.

These rankings take into account various taxes that affect retirees, including state income tax, sales tax, property tax, and taxes on retirement income like Social Security and pensions. It’s crucial for retirees to consider their entire financial picture, including cost of living and healthcare access, when choosing a state to retire in.

States like Alaska and Wyoming may offer significant tax benefits but also come with higher living costs and unique lifestyle considerations. Conversely, states like Florida and Nevada provide a balance of tax benefits and a more traditional retirement setting

About the author

Author description olor sit amet, consectetur adipiscing elit. Sed pulvinar ligula augue, quis bibendum tellus scelerisque venenatis. Pellentesque porta nisi mi. In hac habitasse platea dictumst. Etiam risus elit, molestie 

Leave a Comment