What state has the lowest tax burden for retirees? (2023)

What state has the lowest tax burden for retirees?

Washington

Washington is one of the states with the lowest taxes for retirees because it has no state income tax or a tax on Social Security. Plus, the property tax rate is lower than in half of the states. However, it's state sales tax is among the highest on the list.

For those of us who want to retire in the U.S., there are nine states that have no state income taxes: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

Alaska had the lowest tax burden in the U.S. in 2021, though it was also one of the least affordable states to live in.

According to Bankrate's study, Florida is the best state for retirement in 2022, followed by Georgia, Michigan, Ohio and Missouri. Alaska, on the other hand, held last place in our ranking. The state was dragged down by back-of-the-pack scores in affordability and weather.

More often than not, retirees will find the most affordable and sunniest retirement destinations in the southernmost state of the continental U.S. — Florida. In fact, one third of the 15 U.S. cities on this list are in Florida.

Which states have no income tax on retirement income?

States That Don't Tax Retirement Income

Those eight – Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming – don't tax wages, salaries, dividends, interest or any sort of income.

These are the 10 best places to retire in the U.S.—and Pennsylvania dominates the list. Lancaster, Pa., was the top-ranked place to retire, according to a new ranking.

Are Social Security benefits taxable regardless of age? Yes. The rules for taxing benefits do not change as a person gets older. Whether or not your Social Security payments are taxed is determined by your income level — specifically, what the Internal Revenue Service calls your “provisional income.”

What is a good monthly retirement income?

A good retirement income is about 80% of your pre-retirement income before leaving the workforce. For example, if your pre-retirement income is $5,000 you should aim to have a $4,000 retirement income.

It's no wonder that Portugal has topped the charts for the best places to retire through the years. This tiny country in the southwest corner of Europe has something for everyone.

McAllen, Texas. McAllen made the No. 1 spot as the best city to retire on a monthly budget of $2,500 or less by offering the most budget-friendly expenditures compared to the rest of the U.S. and the top livability score among these 11 cities.