Have You Started Receiving Your Retirement Income? Know This:
You’ve probably worked really hard your entire life, and now you’re retired, or will soon. Unfortunately, there’s a pretty solid chance that Uncle Sam will take a cut of your 401(k), traditional IRA, or pension income. But what about in YOUR own state?
Will it take a chunk out of your retirement income as well? Most states tax at least a small portion of your retirement income. Not to mention the states that tax your Social Security benefits.
Your state might be offering SOME tax breaks, but those breaks usually have a few limitations based on your age and income. However, a few states are entirely free from the most common types of retirement income from taxation: 401(k)s, IRAs, and pensions.
That’s a massive plus for seniors living in those states. So if you’re looking for a location where your retirement funds will go a long way, you should think about moving to a state that won’t tax your retirement income.
Of course, taxes shouldn’t be the only factor to consider when you decide where to retire. But moving to a state that doesn’t have an income tax could leave you with more money to cover your other costs.
If living in a no-income-tax state sounds appealing, which city would be the best to retire to in each of these no-tax states? Let’s look at 7 states where you don’t have to pay tax on your 401(k), IRA, or pension income.
…If you live or plan to move to one of these states, you can stretch your retirement savings more than you think.
I am retired from the State of Texas thru ERS and I am taxed on my retirement and there is all taxes on Estate and inheritances.
texas does not levy an income tax on any personal income, but you will be taxed on realestate and sales tax
Sounds like a basic consumption tax. You make it you keep it. Your choice to spend it where taxed.
Could you give us some examples of personal income, please?
There are no state income taxes in Texas.
Come to Taxifornia if you wish to pay state income taxes.
I can’t imagine being stupid enough to think Texas doesn’t tax you.
Wake up. You pay more in property taxes. You pay more in sales taxes. And you pay more in fees.
Texas also enjoys giving out expensive traffic tickets so rich people don’t have to pay taxes.
So you pay excessive fines, fees. Property taxes and sales taxes.
And you ignorant bastards think you’re getting some great deal.
You are all rubes.
Not state tax..: only federal government tax…
How is Tennessee not listed? Maybe I missed it?
Tennessee has no state income tax on salaries, wages, bonuses or any other type of work income. Although the state used to tax income earned from interest and dividends, it has repealed this starting with the 2021 tax year.
I missed that too. And I’m wondering why they left Tennessee out because I live in this state and they do not tax your income here either.
Mike your social security in TN can be taxed if you have other income. It depends on the amount of income. I have to pay tax on a portion of my SS every year because I work part time.
They also left out Pennsylvania. The writer only pointed out the obvious: states without state tax.
I live in Ohio, retired widow for 27 years, had to work because husband died at 48, lost my pension in Steel mills I am still taxed to death because I had to work longer to pay off all his medical bills, and no pension and to build up my Social Security. You cannot get ahead in this state. We are taxed to the hilt here. Tough for retirees to survive.
I would have filed bankruptcy on husbands medical bills to have a fresh start in life.
Except for S.Dakota having low(-est?) $600/mo. avg. rent, MISSISSIPPI (like SD) retired seniors do not pay state income tax, nor tax on Soc.Security or usual retirement pensions.
We are in the ballpark with S.Dakota’s avg. rent, but have shorter mild winters. The MS Gulf Coast (except for ~1 tough hurricane/10-15yrs) has a more Florida “Panhandle” type of ‘winter’–much cheaper than avg. rent+ of Florida.
Trade offs are 7 warm-or-hot months seeking A.C. instead of 5 cold months paying for heat in OH, different species of insects.
If the bills were in his name and your name was not on them you should have never paid them,my wife passed she had bills my lawyer friend said do not pay a penny on them if your name is not on them cause once you do now there your bill so I never have paid them.
In Michigan, my lawyer told me since my late wife admitted herself into the hospital, I wasn’t responsible for her debts. Also, any bills that came I her name I was told not to open them. I’m glad I listen to him.
I live in Ohio also,same scenario as Angel. My husband passed away at 48 also I also lost my job in the Steel mills after 35 years and my pension went with it. I also worked longer to pay all his medical bills off. So I worked until I was 76. My Social Security is taxed and a really little pension I receive from the job I attained after the Steel Mills went under. So both are taxed. That Social Security money should not be taxed. It was taxed once, But Ohio just taxes everyone to death!
Thank the EPA for destroying the steel industry in the USA starting in 1970… the EPA destroyed York Air Conditioning in York PA over freon…the EPA singlehandedly wrecked American industry over 54 years and no wonder everything is made in China or Mexico where there are no environmental regulations… China and Mexico want EPA regulations to kill off American industry…
Oh Yeah that’s thanks to the President (D)Jimmy Carter on the destruction of America’s national high regulation permission permits taxation and ecological charges for the government limited pollution allowances from their darkened left demoncrat communists party’s mandatory regulations.
Mam, I feel for you but paying ur deceased husbands medical bills is just plain dumb! You should hv ignored the bills , let em go yo collections & ignored them to!! Medical bills unpaid don’t affect your credit score. Besides, what’s more important to you living & EATING or a damn credit score.
why not states need taxes broke for senior citizens that retired don’t think we live o fixed income to
Indiana does tax social security. Indiana taxes social security as frderal irs does
It should be that ALL states and the Federal should tax us seniors. It would help in a big way if all seniors who are living off SS only do not get taxed. Also, those who served in the military should not get taxed. Glad to read about Texas, as I have family who want me to move near them.
You must have a whole lot of money wanting social security to be taxed. People here in Virginia are having a hard time trying to make ends meet. We don’t need any more taxes.
Where in USA can you get a meal in an average restaurant for $10 – $15 per person ?? A burger and drink at McDonalds is that price nowadays.
Washington sure does have an estate tax if your estate exceeds $2.193 million
I was thinking of moving out of Texas because the weather is crazy and unpredictable, too stormy, not cool nor cold enough, not usually temperaturate, and gets unbearably hot. It’s either dry, flash flooding, or has humid air with no rain. There’s so much pestilence it’s unreal. It’s also becoming overcrowded by people moving here from all over. The traffic in and around cities, especially the larger ones, is increasingly becoming insanely chaotic. After reading this I’m pondering our options.
I just moved here to Texas. Can’t stand the heat. Looking at Wyoming.
What if I live in Thailand, should I pay tax when withdrawing from my Rollover IRA? I am over the age of 59.5.
Tennessee has no State Income Taxes, why are they not listed. It’s the best Tax State there is, the liberals don’t like our State is the answer, because it is conservative and the Friendliest State you will ever find.
So, Tennessee is friendly but you aren’t listed because of the liberals? I see.
Marilynn
My mother believed the garbage about Florida, but she somehow missed that they tax dividends and interest very heavily (aka unearned income tax). My folks were a no-pension family, with lots of stocks and bonds. It was ugly.
I’m still waiting on the governor of Michigan to resend the tax her predecessor authorized.
Cherilyn: Regarding pensions, they are reducing on a scale for the next four years or so to I believe zero, believe there is no inheritance tax and Soc Security – have to check again ….
Update for Michigan – Military pensions, Social Security & Railroad benefits continue to be exempt from tax.
Michigan pension update – Yes, but it’s complicated. In tax year 2023, Michigan began a four-year phase-out of its retirement income tax. By the 2026 tax year, pensions and income from 401(k) and IRA withdrawals will be fully exempt from state income tax
Yes so am I. I really don’t like being taxed on my Federal pension!! They said a few years back it would be stopped!! Has not happened yet!! Still waiting!!
The retirement tax is going down in % each year. I can’t remember details but I think it goes by your age.
You earn it, you keep it.
Did I miss Missouri?
Iowa does not tax social security, IRA withdrawals, or annuity income if you are retired.
I live in Texas . You get double taxed here. You need to pay property tax but if you sale it you get taxed again.
In Indiana we pay in taxes about 12,000 a year between state and federal tax. This is for SSDI, SSA, Retirement from government, and TSP monthly pay out. We own our home and have zero debt, so thank goodness for that otherwise we would be heading for some warmer weather like North Carolina where the grandkids are. We just hate to start over.
I think it would help a LOT if a law were passed stipulating that no person, over the age of 65 pays school tax in this country. The burden should be placed on those who have children every year, in my view. I have never given birth, and yet I will pay school tax until I die? How is that right?
Schools serve a societal and social function to produce the next generation of society and workers. This is not about a single individual. Perhaps your should volunteer in the local schools to understand how anf why the money is used.
Without educating the children..there will be no doctors, dentists, pilots, nurses, etc….
If you could have lived your life without them, you are amazing (although quite unaware!)
my husband passed away and I am 85 years old so I had to retried and my income is low
Time to move Angel.
I live in Washington state, true we have no state tax but my pension and 403b are taxed. Not collecting SS yet but that is taxed as well.
That not true, at least from the Washington state level, there is no tax on retirement income from the state
Yes, you are correct and this headline is misleading. It’s simply that Washington is one of the few states with no STATE income tax. But we have quite high sales tax (over 10% in Seattle). So they get our money one way or another. And we still pay FEDERAL income tax on pensions, 401K disbursements and Social Security.
Alabama does not tax.
I live in Washington State. I don’t think I we are taxed here. Is that true?
Hi Linda. No forms of retirement income are taxable in the state of Washington.
I live in Washington also. My Father-in-law’s Social Security Income sure gets taxed.
Don’t come to Colorado try are starting to tax you to death do your research real good before you think of coming here I hope that gives you a heads up.
Texas taxes SS and TRS pensions.
Texas does not tax any income, and certainly not SS, pensions, or investments. The federal government does – federal income taxes. Property taxes and sales taxes are what get your retirement monies, just like most states.
So does GA.
I am retired from the Colombian air force with the rank of colonel, can I apply?
Retire in Fiji Islands. Our dollar is twice as strong. Just check some videos on YouTube. Oh, don’t forget to check the local market for fresh and organic fruits and vegetables.
Hi! Thank you for the tip! The Fiji Islands sound incredible!
Kansas doesn’t tax pensions and their getting to go ahead and stop taxing ssn
What about NC?How is there Taxes?
I live in Kansas, they don’t tax pensions and talk on endinding tax on social security. I’m retired military and retired from Johnson County Community College.
Why didn’t you include Iowa? They don’t tax seniors just like the other states that you mention.
Thank you for letting us know Ken. We’ll be sure to include Iowa in our next article.
You missed a state. Tennessee doesn’t have a state income tax either. Why was Tennessee left out?
Hi Mike. Thank you for the tip! We’re glad to hear it and we’ll be sure to include Tennessee on our next list!
I think the state of Connecticut is hard on retirees.
They tax until death. You can’t get ahead. The rents are high, grocery is through the roof, and they nickle and dime you on everything else.
Brenda,
That sounds like California. But I have to admit, it’s a beautiful place to live weather and wages. But one has to decide whether they want to stay or go where retirement income isn’t taxed.
What about North Carolina
I moved to NC from Florida. This is a very expensive state to live in. I’ve been here for 2 years and am leaving. You pay property tax on your car…RU kidding?
You might want to amend your research methods on the utilities cost for Alaska…… for $295 per month, you might be living in Anchorage but if you live in outlying areas in rural Alaska, expect to pay a lot more ($350-$800 per month!!). As I live here, this is a reality and not conjecture, be ready that your bills will be higher. As for Internet, expect to pay at least double. If not, triple.
Texas and Nevada have high sales taxes on everything including groceries, non prescription medicines, clothing, etc.
Jerks – never listed the 7 states, or, hid it somewhere.
I was told by a friend that Indiana doesn’t tax SSI Disability. Is this true?
So does GA.
I live in Taxifornia (CA). Don’t have sympathy for anyone else. We’re up there w/NY, NJ MD, maybe even VA, (that taxes yrly on all “luxury” items yr after yr ….cars, boat, mink coat, etc …so, it’s like buying them over & over again if you want to keep & use them 🙂 I pay Fed taxes of over 25% , & then couldn’t get out of CA during COVID…kept working therefore, & now can’t get out b/c no one can buy my house (in the Biden economy), which is worth more than 3/4 million, & if I sell, I can’t STAY in CA due to the taxes on a new housing buy (we are protected right now by Prop 13 that keeps our housing taxes yearly at a rate near which we bought it 30 yrs ago….if I sold & “downsized” to a small home worth even 1/3 of what I sell my present home for…I’ll be paying a huge price for the smaller home AND then almost an equal amt monthly in taxes…I’d need to sell and live in my CAR…the only way I can get “ahead” if I retire on a fixed income this year.( The giant amt of homeless in CA are not always due to mental health, drug, or other down-trodden issues. This state PRODUCES homelessness by policy and NOW via Newsom’s latest edict, believes that they can clean out homeless encampments and that the homeless will suddenly…POOF! disappear.) Also, CA has a huge, regressive state sales tax…ranging by counties from 7% to 13%. By the time I pay my federal tax, state tax, sales tax, property tax…I am paying 40%-45% OR MORE of my income to taxes of all kinds. I am a 30+ year school teacher. Not a “rich” person that the Dems said they would tax to “fix” the economy. I now pay double more in taxes than the first sustainable salary that I ever earned as a teacher. I would LOVE to move to WV, Tenn, Alabama, Florida, S. Dak….temperate states that are tax friendly, esp for seniors to bring their retirement incomes to spend.
Where are the 7 states that are no tax from retirement and this is your main topic
Try coming to California it’s F $$$ ridiculous How they tax everything here it’s not the place to be because of the cost of living. The only good thing is the weather it’s one of the greatest so far but who knows about what’s gonna happen with this climatic change coming
This article doesn’t show which 7 States… Why not just get to the point! Ugh!
Recently moved to Ga. Does Ga tax SS or 401K?
If you dont mind paying Taxes come to California. They never met a tax they didnt like, Someone has to pay for all the programs they cpme up with.
Thats why California has a better economy that texas and a better infrastructure. We dont freeze to death in the winter due to a failing power grid and we have clean water and air.
This is a joke!! The headline sais there are specific states that do not tax retirement income. Where is the list?????
The EPA didn’t destroy anything. “Fair Market” conditions is what did US Steel in. We cannot compete with the Chinese steel on the open market. When you don’t give a crap about your employee’s lives and safety, you can have much lower overhead. You people who voted for the “businessmen” to run our democracy, are about to find out EXACTLY how little we all mean to a bunch of greedy f*cks like Musk, Bezos, etc. CONGRATS!