States with no income tax — like Florida, Texas, and Wyoming — are often considered tax-friendly for retirees. These states typically don't tax Social Security benefits, pensions, or retirement account withdrawals, though property and sales taxes may still apply.

These assume that you, as the retiree, are making qualified withdrawals instead of early withdrawals which would have penalties. Which states are the most ideal to retire in? Which are the worst states to retire in? See the table below and follow this simple key: = Most tax friendly | = Moderately tax friendly | = Least tax friendly ... Social Security income is not subject to state income tax in Alabama. Other retirement income, including pensions and annuities, is taxed as regular income at rates ranging from 2% to 5%. Alabama's state income tax rates range from 2% to 5%, with property tax rates being among the lowest in the country, averaging around 0.4%. Additionally, Alabama offers a homestead exemption for seniors aged 65 and older, which can exempt a portion of their property taxes, potentially covering up to 100% of state property taxes.

July 21, 2025 - New Hampshire is the best state for retirement in 2025, while Sun Belt states faded in Bankrate’s latest study.

January 28, 2025 - That’s important considering the fact that 66% of non-retired adults say their retirement savings aren’t on track. To determine the best states to retire, WalletHub compared the 50 states across 46 key indicators of retirement-friendliness, from financial factors like tax rates and the cost of living to things like access to quality medical care and fun activities.

October 30, 2025 - Lupo said. South Dakota scored points for its many employed seniors, a strong nursing work force and its top-ranked geriatric hospitals. The 10 best states for retirement and the categories in which they scored highest, and the 10 worst states and the categories in which they scored lowest.

To identify the best places to retire, U.S. News analyzed data for more than 850 top cities in the U.S. to assess how well they meet Americans' retirement needs and expectations. Below are the top 250 Best Places to Retire among these cities for 2026. Top criteria include quality of life, overall value, tax rates, senior population/migration trends, and health care quality.

July 11, 2025 - Here are a few popular retirement states with lower costs than Hawaii. Colorado: $981,803 to retire; $61,709 annual cost of living · Florida: $977,296 to retire; $61,529 annual cost of living · New Mexico: $834,590 to retire; $55,821 annual cost of living · WalletHub did a recent ranking of best and worst states for retirement.

That would add up to taxes of $1,200 on that retirement account income—taxes that you wouldn’t have to pay in states like Alaska (which has no income tax) and Mississippi (which exempts retirement account income). Exemptions for pension income are more common.

Florida: Known for its warm climate, beautiful beaches, and tax advantages, Florida is a popular choice for retirees. Acts offers a variety of communities throughout the state, including locations on the vibrant Gulf Coast and in the “amusing” Orlando area. Pennsylvania: With its rich history, diverse landscapes, and abundance of cultural attractions, Pennsylvania offers a fulfilling retirement experience.

November 4, 2025 - We should also mention four additional retirement-friendly states: Illinois, Iowa, Mississippi, and Pennsylvania. Though Social Security benefits, pensions, IRA, and 401(k) distributions are tax-exempt in Illinois, a flat 4.95% tax applies to earnings from other sources (e.g., investment income).

August 12, 2024 - Texas hits the sweet spot of being a pretty affordable state while also not imposing any state income taxes, so your pension can last you a long time. The cost of living is lower than the average, and house inflation hasn’t kicked in as hard compared to other states in the country. Texas is surprisingly cost-effective, but the healthcare does leave a lot to be desired. There are honestly so many states in the U.S., each with its own systems, rules, and regulations. So, it’s important to see which state best fits your retirement needs.

Find out the 10 best states to retire in the U.S. Best places to retire - our best retirement states list that includes Florida, South Dakota and Colorado.

December 18, 2025 - Granted, Mississippi retirees only make, on average, around $23,347 per year, but the state’s tax code is famously senior-friendly, foregoing tax on retirement income, including pensions and Social Security, and offering property tax exemptions for homeowners 65 and up.

2 weeks ago - Tennessee has now joined the ranks of pension-friendly states with no standard income tax. Another pension-friendly attribute of Tennessee is the lack of estate and inheritance taxes. Plus, property taxes are relatively low, though the same cannot be said for the state’s sales tax rate, which is one of the highest in the country. Delaware is friendly to pensioners since it doesn’t tax Social Security and Railroad Retirement benefits.

As for the best places to retire in Wyoming, Niche recommends Thermopolis (the Wyoming city with the fourth-lowest cost of living), Ranchettes (also ranked the ninth best place to live overall in Wyoming), and Worland (ranked the third-lowest cost of living in Wyoming). ... Retiring in South Dakota means enjoying financial benefits that make life easier for seniors. The state has no income tax, which means Social Security, pensions, and retirement account withdrawals remain untaxed.

Delaware: A haven for retirees due to its lack of sales tax and inheritance tax. Additionally, Social Security benefits are not taxed, and the state has a flat income tax rate. Florida: Another popular choice for retirees, with no state income ...

October 24, 2024 - If you prefer mountains over beaches, Colorado ranks as the second-best state for retirees, according to WalletHub. Although Colorado residents face high sales tax, property taxes are lower than other states. And although Colorado partially taxes income from Social Security and withdrawals from retirement accounts, the state allows for tax deductions for certain retirement income sources for qualified taxpayers.