50. California
California may have sunny weather and beautiful beaches, but it’s not really the place to be if you’re worried about taxes. It has the highest income tax in the nation, for a start, plus high property taxes and sales taxes.
49. New Jersey
Unfortunately, New Jersey is notorious for its high taxes and income tax rates. Its property taxes are among the highest in the whole of the United States in fact, with an average effective rate of 2.47%. There are also high inheritance tax fees.
48. New York
You might want to avoid New York, especially New York City, if you’re worried about taxes. The combination of high income taxes, steep property taxes, and local sales taxes put the state firmly on the “worst” list.
47. Connecticut
Homeowners lose out in Connecticut, because the property tax there is high, with an average rate of 2.09%. Sales tax is also high at 6.35%. According to research done in 2024, Connecticut’s tax burden is actually the fourth highest in the States.
46. Rhode Island
Property taxes on Rhode Island are high, with an average effective rate of 1.63%. Sales tax stands at 7%. Unfortunately, despite its beauty, it’s really not a very good state for tax friendliness.
45. Minnesota
Minnesota’s high income tax, combined with generally high property taxes and taxes on Social Security, makes it a difficult state to live in for low-income retirees. Even though the sales tax is not as high as some other states, it can still cripple some people.
44. Maine
Maine taxes Social Security benefits for certain income levels, and the state also has relatively high property tax rates. You might want to see a financial advisor beforehand if you’re considering moving there.
43. Nebraska
Nebraska is considered not very tax-friendly towards retirees. The state taxes Social Security benefits for certain income levels and other retirement income. However, the state is currently working towards becoming a more tax-friendly environment.
42. Montana
Montana doesn’t impose a state sales tax, which can benefit retirees, but it’s unfriendly in other areas. Montana, like some other states, taxes Social Security benefits.
41. Kansas
Kansas may be a beautiful part of the country but it’s not great for retirees when it comes to taxes. Taxes on Social Security, high property tax rates, and lots of sales taxes make for a bad picture.
40. Utah
Utah boasts relatively low property taxes and a flat income tax rate of 4.95%. But social security income is taxed and so are withdrawals from retirement accounts, which might put a lot of people off.
39. Wisconsin
While Social Security benefits are not charged in Wisconsin, the state taxes most retirement income, including 401(k), IRA withdrawals, and private pensions at rates between 3.5% and 7.65% depending on income. All that, and it has high property taxes as well.
38. Louisiana
Louisiana is a beautiful and vibrant place, and many retirees consider it for its great cultural heritage. But you need to beware of taxes there (as well as alligators.) It has high sales taxes and moderate income taxes.
37. Massachusetts
Massachusetts has a relatively high property tax burden, with a flat but still rather cumbersome income tax, which unfortunately makes it one of the least tax-friendly states in the USA.
36. Maryland
Maryland has a progressive income tax with a top rate of 5.75%, but some counties may add more. It has moderate to high property taxes as well – but Social Security income is not taxed.
35. Hawaii
Many people dream of retiring to Hawaii, with its sun and sand, only to end up disappointed with the tax burden when they get there. It has high individual income and sales taxes.
34. Illinois
Maybe think twice before you retire to Illinois. The state has high property taxes, averaging 2.30% of a property’s value. The sales tax is also higher than you might like. But (a big but) Social Security, pensions, and 401(k) and IRA distributions are not taxed.
33. Vermont
It’s not looking good for Vermont when it comes to taxes. Its progressive income tax and high property taxes (averaging 1.92%) put it on the list of states with a relatively high overall tax burden.
32. Missouri
Missouri has low to moderate income tax, relatively low property taxes, and generally just a pretty good tax environment overall. However, it does put partial taxes on Social Security income.
31. Ohio
Ohio has a complicated tax code with relatively high individual income taxes. It’s not the worst state for tax friendliness but it’s certainly not the best either. The good news is that Social Security income is not taxed.
30. Oregon
Oregon has no tax on Social Security, a big plus, but it has high property taxes and progressive income tax with a top rate of 9.9%. High earners in Oregon don’t find it friendly for taxes at all.
29. Arkansas
Sales tax is high in Arkansas, though prescription drugs and groceries are charged at a lower rate. Social Security is exempt from Arkansas state income tax, but that may or may not swing you in a state considered a bit of a mixed bag.
28. North Carolina
Social Security benefits are fully exempt from state income tax in North Carolina, but other retirement income (such as pensions and 401(k)s) are fully taxable at a flat 4.5% income tax rate. It also isn’t great for sales tax.
27. Virginia
Virginia is quite tax-friendly for retirees. Social Security income is not taxed, and seniors are eligible for a deduction of up to $12,000 annually. The state also has low housing costs, a low crime rate, and a whole lot to see and do.
26. New Mexico
Social Security in New Mexico is only partially exempt from taxes, and sales taxes is high, reaching as much as 9% in some areas. However, there is no inheritance tax, and property taxes are low.
25. Oklahoma
Oklahoma has some of the highest sales taxes in the US, but it does have its good points too. Social Security income is not taxed and up to $10,000 per person of retirement income from pensions, 401(k)s, and IRAs is exempt.
24. Indiana
Indiana is pretty much bang in the middle when it comes to taxes for retirees. Social Security benefits are not taxed, but retirement income (pensions, 401(k)s, IRAs, etc) are fully taxable at a flat state income tax rate of 3.15%.
23. Idaho
In Idaho withdrawals from retirement accounts are taxed, but Social Security income is not. The state has low property taxes and a moderate sales tax. It generally ranks pretty high when it comes to states people would like to retire to.
22. West Virginia
Almost heaven, West Virginia. As of 2022 Social Security benefits are tax-exempt, and state income tax rates are gradually decreasing. They’re currently ranging from 2.36% to 5.12%, but dropping further in the coming years.
21. South Carolina
South Carolina offers moderate income tax, with a top rate of 7%. Property taxes are relatively low and Social Security income is not taxed. It certainly wins out over its northern counterpart.
20. Washington
Washington has no state income tax and moderate property taxes, but it “makes up” for those with a high sales tax. However, Social Security income is not taxed in the state.
19. Kentucky
The state sales tax in Kentucky is 6%, and there are no sales tax exemptions for groceries. There are however exemptions for prescription drugs and medical equipment, something seniors may find a relief.
18. Michigan
Michigan has been improving its taxes. It’s thought that by 2026, most retirees will be able to deduct public and private pension/retirement income from state taxes. Bear in mind that the property tax rate is high, however.
17. Arizona
Arizona’s desert environment may not agree with everyone, but it’s moderately good for taxes. Social Security income isn’t taxed, and property taxes are generally low.
16. Colorado
Colorado is at the middle-high part of the tax friendliness spectrum. Social Security benefits are only partly exempt. However, up to $24,000 (age 65+) or $20,000 (under 65) can be deducted from taxable income.
15. Nevada
The desert environment of Nevada is home to Las Vegas and also home to low taxes. There is no state income tax and fairly low property taxes. Definitely a good state to consider for those about to retire.
14. Texas
Texas has no state income tax, an attractive proposition, but high property taxes. Generally it’s considered good for retirees, with no taxes on Social Security and a low cost of living.
13. Iowa
Iowa is a pretty good choice if you’re looking to retire. Recent changes have made it very tax-friendly for seniors, who can enjoy all their retirement income tax-free. Property taxes are high, but qualifying seniors can get a $3,250 exemption on their home value.
12. Pennsylvania
Good news! Pennsylvania exempts all retirement income from state income tax. Bad news! It’s one of only six states that tax inheritances. Make a list of pros and cons if you’re thinking about moving there.
11. Mississippi
Mississippi is good overall for retirees who are worried about money issues in the future. It has no tax on Social Security and low property taxes. Disabled people and those over 65 are also granted tax exemptions.
10. Alabama
Sweet home, Alabama. It’s pretty tax-friendly for the elderly! The state doesn’t put taxes on social security or pension income, and offers property tax breaks for seniors.
9. Tennessee
As of 2021, Tennessee has eliminated its state income tax, making it much more tax-friendly. It also doesn't tax Social Security benefits or pensions, making it an attractive option indeed for a great many people.
8. Delaware
Delaware is very popular with tax-conscious retirees. It has no state sales tax, very low property taxes, and is generally considered very estate-friendly. Lots of people are planning retirement there even as we speak!
7. Wyoming
Wyoming has a state sales tax of 4%, which is lower than many other states. And prescription drugs and groceries are exempt from sales tax, helping you save money. Unsurprisingly, a whole lot of retirees have gathered there.
6. Georgia
Georgia is arguably one of the best states to retire to. It doesn’t tax Social Security benefits, and there are tax relief programs for those over 62 or long-term disabled people. Definitely worth putting it on your retirement possibilities list.
5. North Dakota
Social Security income is partially taxed in North Dakota, but on the whole it’s a good tax environment for retirees. Property taxes and sales taxes are all low.
4. Alaska
Alaska may be cold, but it’s good for retirees when it comes to taxes. There are no taxes on Social Security and no state income tax. It’s also considered to have very good healthcare for seniors, always a big plus.
3. New Hampshire
New Hampshire doesn’t charge income tax on Social Security, pensions, and retirement distributions – good news for retirees. It’s also considered to have great healthcare, making it a very attractive retirement option indeed.
2. South Dakota
South Dakota is just a good place to retire all-round. It’s very affordable, there are no state income taxes, and the healthcare is considered to be of high quality.
1. Florida
Florida has a reputation as a retirement hotspot and it’s a reputation that’s well deserved. It has no state income tax, moderate property taxes, and no tax on Social Security. It’s also bright and sunny with countless beaches and theme parks.
