5 States That Don’t Tax Retirement Income

Retirement is the late-age opportunity to say goodbye to working life tension and hello to a life of leisure — maybe.

Most people retire between the ages of 63 to 65. The typical American has about $50,000 saved for their retirement. About a quarter of Americans, however, have less than $5,000 saved.

And about 15% of American workers have absolutely nothing saved for their retirement. About one in five are dependent on Social Security for all of their retirement income.

Unsurprisingly, more than half (55%) of Americans think they will have to work part-time throughout their retirement so they don’t outlive the funds they do have.

Unfortunately, just because you responsibly amass a retirement fund over a working life doesn’t mean that you get to spend it all yourself.

It’s hard out here for a retiree. But if you know how the system works, then you can make it work for you. There are many states that don’t tax any type of retirement income for example.

If you do enough research, you will find many states that do not have an income tax which in turn negates the ability to tax retirement income.

However, not every state is equal. Some states won’t tax retirement income as long as you don’t withdraw early. Or they may tax one type of retirement income versus another.

Other states may have a negligible income tax which may affect retirees working part-time if not their retirement fund. Consult with a financial advisor before you move to a state as a retirement income tax exile.

Here are five states that do not tax retirement money and selected other taxes per Kiplinger.


Ok, Alaska is probably not on your list of places to settle for your retirement. But you should keep an open mind.

Alaska has no income taxes and doesn’t tax any kind of retirement benefit.

Average combined state and local sales tax rate: 1.76%. Median property tax rate: $1,182 per $100,000 of assessed home value.


Florida is the typical state most people think about when it comes to retiring, and for good reason. There is no taxation on income or retirement benefits.

Average combined state and local sales tax rate: 7.08%. Median property tax rate: $830 per $100,000 of assessed home value.


Mississippi won’t tax any retirement income so long as you don’t withdraw before the age of 59½.

Average combined state and local sales tax rate: 7.07%. Median property tax rate: $787 per $100,000 of assessed home value.


Nevada does not tax any retirement income.

Average combined state and local sales tax rate: 8.23%. Median property tax rate: $533 per $100,000 of assessed home value.

South Dakota

You won’t have to worry about your retirement income being taxed here either.

Average combined state and local sales tax rate: 6.4%. Median property tax rate: $1,219 per $100,000 of assessed home value.

Recommended Articles

Is the 4 Percent Rule Viable for Retirement? Consider the Evidence

Is the 4 percent rule viable for retirement anymore? And if not, what should retirees do about it? For decades, the cornerstone of retirement planning has been the 4 percent

7 Personal Finance Myths Preventing You From Being Rich

If you are someone who is looking to get rich, the last thing you need is bad financial advice. And there plenty of personal finance myths. Unfortunately, there is a

Drink Less, Live Longer: The Latest Research

It is very common in society today to drink alcohol on a regular basis. Teenagers may drink at parties on the weekend because of peer pressure, while adults may enjoy a

Claim Social Security, Keeping Working…Or Both?

Officials within the Social Security Administration are floating the idea of raising the retirement age. Though no proposal is in play just yet, Congressional staffers are studying a rise in

when you do need a will

When Do You Need a Will? Almost Immediately If You Invest

When you do need a will? Pretty much the moment you own any assets at all, assuming you want to leave those assets behind to a loved one. According to

Lose 20 Pounds In Just One Month by Adding This to Your Morning Coffee

If you love drinking coffee in the morning and you happen to be trying to lose a few extra pounds, you’re in luck. Adding just a few simple ingredients into

A Small Change to Your Investing Could Reap Big Retirement Gains

Many financial advisors have recommended the time-tested 60/40 portfolio to investors for decades. The 60/40 portfolio, which calls for 60% of a portfolio to be invested in stocks and 40%

build wealth

5 Things You Must Do Now to Build Wealth

Everyone wants to be wealthy. However, it takes dedication and sacrifice to build wealth. Being wealthy involves adjusting your financial mindset about money. You must continually view money as a

Reflexology: Press These Points On Your Palm to Relieve Any Pain

Alternative medicine is becoming more widespread and commonly used by people all over the world. This is true especially when used to treat pain. Western medicine often relies on medications that

Tricky Social Security Scams Hitting Millions of Americans

Social Security scams are on the rise. The November Retirement Confidence Index from SimplyWise reported that 47% of Americans were targeted by a Social Security scam in a recent three-month

Here’s the Truth About How to Retire Early

While the rule of thumb is to retire at the age of 65, here's the truth: Most Americans retire at the age of 62. In fact, in 2017 the average

Sitting May Be Even Worse for Us Than We Thought

As a culture, we spend so much time sitting. Think about it: many of us sit in our cars (or on buses) on our commutes to and from work, we