Choosing the right state to retire in can save $5,000–$30,000+ per year in taxes. The key factors: (1) Does the state tax pension and IRA income? (2) Does it tax Social Security? (3) How high is property tax? (4) Are there senior-specific exemptions? This hub compiles all our state retirement tax comparisons and key retirement tax facts for every US state.
Retirement income includes: Social Security, pension/annuity payments, IRA and 401(k)/403(b) withdrawals, military retirement, and investment income. State treatment varies dramatically:
The federal government taxes up to 85% of Social Security for higher-income recipients. At the state level: approximately 38 states fully exempt Social Security from state income tax. States that partially or fully tax SS include: Colorado, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, West Virginia (phasing out), and Connecticut. Kansas and Missouri fully eliminated their Social Security income tax effective January 1, 2024. Nebraska completed its phase-out in 2025.
Public and private pensions are taxed very differently by state:
Generally treated as ordinary income by states that have income tax, subject to the same rates as wages. States with age-based retirement income exemptions may partially or fully exclude IRA/401(k) distributions above retirement age.
Our detailed comparison pages show exactly how much retirees save by moving between states:
| State | Social Security | Pension/IRA | Avg Property Tax | Retirement Rating |
|---|---|---|---|---|
| Florida | N/A (no income tax) | N/A | 0.86% | ★★★★★ |
| Texas | N/A | N/A | 1.40% | ★★★★☆ |
| Nevada | N/A | N/A | 0.55% | ★★★★★ |
| Arizona | Exempt | Partially exempt | 0.62% | ★★★★☆ |
| Georgia | Exempt | Up to $65K exempt (65+) | 0.92% | ★★★★☆ |
| South Carolina | Exempt | Up to $15K exempt (65+) | 0.57% | ★★★★☆ |
| Illinois | Exempt | 100% exempt | 1.88% | ★★★☆☆ |
| Pennsylvania | Exempt | 100% exempt | 1.49% | ★★★★☆ |
| New York | Exempt | $20K exempt (65+) | 1.54% | ★★★☆☆ |
| California | Exempt | Fully taxable | 0.71% | ★★★☆☆ |
| Minnesota | Partially taxable | Fully taxable | 1.02% | ★★☆☆☆ |
| New Jersey | Exempt | Partially exempt (65+, low income) | 1.88% | ★★☆☆☆ |
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Retirement state planning — comparing Social Security treatment, pension deductions, property tax impact, and estate tax — benefits from professional modelling. Get matched with a CPA who specialises in retirement tax planning.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
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