piggy bank on the beach wearing sunglasses.

Retirement usually means a fixed income. Here's where to live if you want more money in your pocket.

The state you call home plays a big role in your finances. Since every state has a different tax situation, your budget can stretch further in some locations than others. Considering that many retirees are living on a fixed income, it’s helpful to know how each state stacks up in terms of taxes.

Kiplinger put together a state-by-state guide to help retirees discover the most tax-friendly states. Active adult homebuyers can browse the list for a detailed summary of taxes on retirement income, real estates taxes, as well as special tax breaks for older adults.

If you’re browsing for the best places to retire for taxes, put these 10 states at the top of your list.


Retirees who don’t mind the cold can discover a true tax haven in the Last Frontier. There’s no state income tax or sales tax in Alaska, making it one of the best places to retire for taxes. Those who have lived in Alaska for at least a year receive an annual dividend check from the state’s oil wealth savings account.


Retirees who want to maximize their budget will be pleased with the tax situation in Nevada. There’s no state income tax and social security benefits aren’t taxed. Another plus for retirees? Retirement income isn’t taxed.

As a bonus, Nevada is home to several well-regarded 55+ communities, including Sun City Summerlin, Sun City Anthem, Siena, Heritage at Cadence, and many more.


Wyoming is a gold mine for retirees looking for one of the most tax-friendly states. There’s no state income tax, although there’s a low state sales tax. Retirees appreciate that retirement income isn’t taxed and Social Security benefits are also untaxed.

Adults age 65 and older who meet certain income requirements may be eligible for the Tax Rebate to Elderly and Disabled Program, which provides a refund from the Wyoming Department of Health on property tax, utilities, and sales/use tax.

South Dakota

South Dakota is home to Sioux Falls, the most affordable place to retire, and offers a tax-friendly climate throughout the entire state. Retirees often find the Mount Rushmore State so appealing since it doesn’t have a state income tax and maintains relatively low sales taxes. The state also offers several property tax relief programs.


The Bluegrass State offers plenty of allure for retirees. Kentucky also stands out as a tax-friendly retirement destination since the state exempts Social Security benefits from income taxes.

The state maintains a 6 percent sales tax at the state level, and localities can’t add to it. Homeowners who are at least age 65 qualify for a homestead provision that exempts some of their property’s value from state taxes.


There’s a lot to love about Mississippi — especially how tax-friendly it is for retirees. The state exempts Social Security benefits from state income taxes and also excludes all qualified retirement income. Retirees can expect the remaining income to be taxed at a maximum of five percent.


The Peach State is a sweet destination for retirees, who can discover their dream home in one of Georgia's dozens of 55+ communities. Social Security income is exempt in addition to up to $35,000 of most types of retirement income for those age 62 to 64.

Adults age 65 and older enjoy an exemption of $65,000 per taxpayer. Retirees should note a statewide sales tax of four percent and understand that jurisdictions can add up to four percent of their own taxes.

Retirees looking towards Georgia have plenty of 55+ community options, too. These include Sun City Peachtree, Cresswind at Lake Lanier, Soleil Lauren Canyon, Del Webb at Lake Oconee, and Del Webb Chateau Elan.


There are many reasons active adults flock to Florida as a prime retirement destination. The Sunshine State also rises as one of the best places to retire for taxes. There’s no state income tax here and permanent Floridians can receive a homestead exemption of up to $50,000, regardless of age. Older adults may qualify for an additional exemption.

Florida is not surprisingly home to the most active adult communities in the country with a wide range of styles and prices. Notable communities include On Top of the World, Sun City Center, Latitude Margaritaville, and Solivita.


Retirees who want a scenic retirement often look to Pennsylvania. The state provides more than just picturesque small towns and natural beauty — it’s also a tax haven for retirees.

The Keystone State does not tax Social Security benefits or any eligible state public or private pension plan. The state also doesn’t chip away at distributions from 401(k) plans, IRAs, deferred compensation plans, or other retirement accounts. However, retirees should be prepared for potentially steep real estate taxes in some Pennsylvania communities.

New Hampshire

Retirees who want to experience plenty of New England charm can find it in New Hampshire. By retiring in the Granite State, they won’t have to pay taxes on Social Security benefits, pensions, or distributions from their retirement plans.

No sales tax is the cherry on top. While the median property tax in New Hampshire is one of the highest in the country, adults age 65 and older can take advantage of available relief.