Which states don't tax Social Security benefits?

As of 2026, 41 states (plus DC) do NOT tax Social Security benefits. Only 9 states still tax some portion of SS: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia (West Virginia is phasing out the tax through 2026). Of those, most have income thresholds — for example Connecticut exempts SS for couples earning under $100k AGI. Federal taxation of SS (up to 85%) applies regardless of state.

What are the best states to retire for taxes in 2026?

Our top 5 by overall retirement tax burden: (1) Wyoming — no income tax, low property tax, low sales tax. (2) Florida — no income tax, no estate tax, moderate property tax. (3) Tennessee — no income tax, low property tax, but 9.55% sales tax. (4) Nevada — no income tax, moderate property tax, no estate tax. (5) South Dakota — no income tax, low cost of living, no estate tax. Outside this top 5, Texas is friendly on income but has high property taxes (~$3,800 average annual on a median home).

Are pensions taxed differently from IRA withdrawals?

Yes, in many states. Some states fully exempt traditional pensions but tax IRA withdrawals (Alabama, Hawaii). Others provide partial exclusions on both ($65k retirement income exclusion in Georgia for 65+; $100k pension exclusion in New Jersey for 62+). Federal treatment is identical (both are ordinary income), but the state-level differences can swing your annual tax bill by thousands of dollars. Our calculator separates pension and IRA inputs so you see the impact for each.

How much can I save by moving to a tax-friendly retirement state?

For a typical retiree with $80k of combined income (Social Security + pension + IRA), moving from California (13.3% top rate, partial exemptions) to Florida (0%) saves roughly $4,000–$7,000 per year in state income tax alone — over a 25-year retirement, that's $100k–$175k. The savings are even larger for higher-income retirees and those in New York, New Jersey, or Hawaii. Factor in property tax and cost of living before committing — a tax-friendly state with high property tax can negate the savings.

Do I need to establish residency to get the lower tax rate?

Yes — you must establish 'domicile' in the new state, which generally requires: (1) Living there more than 183 days per year. (2) Registering vehicles and voting there. (3) Having a primary home there. (4) Filing a final part-year return in your old state. High-tax states like New York and California aggressively audit former residents, so document your move thoroughly: utility bills, driver's license, bank account changes, and a clear severance from old-state ties.

Does state tax affect Gold IRA withdrawals?

Yes — Gold IRA withdrawals are taxed identically to Traditional IRA withdrawals at both the federal and state level. If your state taxes IRA distributions (most do), Gold IRA withdrawals are taxed at your state's ordinary income rate. The 28% federal collectibles rate does NOT apply to Gold IRAs (it only applies to gold held in taxable accounts). This is one of the major advantages of holding precious metals inside a Gold IRA — you avoid the collectibles surcharge.

What about property and sales taxes for retirees?

These often matter more than income tax for retirees. Highest property taxes: New Jersey ($9,500+ avg annual), Illinois, New Hampshire, Texas, Vermont. Lowest: Hawaii, Alabama, Colorado, Louisiana, West Virginia. Highest sales tax: Tennessee, Louisiana, Arkansas, Washington (all ~9–10% combined). Lowest: Alaska, Delaware, Montana, New Hampshire, Oregon (no statewide sales tax). A complete 'retirement tax friendliness' assessment combines all three — our tool focuses on income tax because that's typically the biggest line item.

Which states don't tax retirement income?

Eight states have NO state income tax: Alaska, Florida, Nevada, New Hampshire (interest/dividends only and being phased out), South Dakota, Tennessee, Texas, Wyoming. Plus four states that don't tax Social Security or pension/IRA income specifically: Illinois, Iowa (pension/IRA after age 55), Mississippi (after 59½), Pennsylvania (most retirement income exempt).

Does Florida tax IRA withdrawals?

No — Florida has no state income tax of any kind. IRA withdrawals, pensions, Social Security, dividends, capital gains, and wages are all 100% state-tax-free. Major reason Florida ranks #1 for retiree relocation.

What's the most retiree-friendly state in 2026?

Most published rankings (Kiplinger, AARP, Bankrate) list a top 5 of: Florida, Tennessee, Wyoming, South Dakota, Nevada — all no-income-tax states. Pennsylvania often ranks high for its retirement income exemption combined with moderate property taxes. Mississippi and Iowa offer specific retirement carve-outs without no-income-tax status.

Are Social Security benefits taxed at the state level?

11 states tax some Social Security: Colorado, Connecticut, Kansas, Minnesota, Missouri (recently repealed), Montana, Nebraska (phasing out by 2025), New Mexico, Rhode Island, Utah, Vermont, West Virginia (phasing out by 2026). Most have income-based exemptions — check current rules per state.

Does moving states reduce my IRA tax burden?

Yes for state tax. A NY retiree paying ~6.85% state tax on $50k of IRA withdrawals = $3,425/yr. Moving to FL eliminates that = $34,250 saved over 10 years. Federal tax is unchanged. Establish residency BEFORE the IRA distribution year — domicile rules require physical presence + intent.

Do any states tax gold itself?

Sales tax on bullion varies by state. 42 states + DC have either full exemption or reduced sales tax on investment-grade bullion above certain thresholds. Worst states for bullion sales tax: California (full state sales tax under $1,500), Maine, Vermont. Best (no sales tax on bullion at all): TX, FL, AZ, NV, OK, OH, and most others.

What's the worst state for retirement taxation?

Connecticut, New York, Vermont, Maryland, and California are routinely cited — high state income tax (5–13%), partial Social Security taxation, high property tax, plus estate/inheritance tax in some. A high-income retiree can save $20k+/yr by relocating from these states to FL/TX/TN/NV.

How does state tax affect Roth conversions?

Roth conversions add to taxable income for both federal AND state tax purposes. Strategy: do conversions in low-tax states (or in the year you relocate to a no-tax state). A retiree moving from CA to TX who waits to do conversions until after the move can save 9–13% on the conversion tax.

Are pensions taxed differently than IRA withdrawals?

Sometimes — many states (PA, IL, MS, AL, IA) have specific pension exemptions that don't apply to IRA withdrawals, or vice versa. Always check the state's specific treatment of (a) Social Security, (b) public pension, (c) private pension, (d) Traditional IRA, (e) Roth IRA, and (f) annuity income separately.

Does establishing Florida residency really work?

Yes if done correctly. Requirements: (1) declare Florida as your domicile (file Declaration of Domicile), (2) get a Florida driver's license, (3) register to vote, (4) spend more days there than any other single state (183+ days is the safest threshold), (5) update IRS Form 8822, (6) file a final return in your old state. High-tax states (NY, CA) audit aggressively — keep documentation.

What's the property tax angle for retirees?

Property tax often matters more than income tax for retirees who don't have large IRA withdrawals. Texas and Illinois have high property tax (1.6–2.1%) despite no/low income tax. Hawaii has lowest property tax (~0.3%) but high COL. Most retiree-friendly combined: Tennessee (low property + no income tax).

Can I have a Gold IRA in any state?

Yes — Gold IRAs are federally regulated and available in all 50 states. State tax applies to distributions in your state of residence. The custodian and depository can be located in any state (most are in TX, DE, NV, UT for favorable bullion-storage laws), but that doesn't affect your personal state tax treatment.

State Retirement Tax Comparison (1970)

Compare · Updated 1970

How much could you save by retiring in another state?

Compare the annual state income tax on your Social Security, pension, and IRA withdrawals across up to three target states — and see your potential annual savings.

Your states

Current state of residence

Target state #1

Target state #2 (optional)

Target state #3 (optional)

Your annual retirement income

Social Security (annual)

Pension (annual)

IRA / 401(k) withdrawals (annual)

Other taxable income (interest, dividends)

Move to Florida and save approximately $6,916/year in state income tax

Over a 25-year retirement, that's $172,900 in pre-inflation savings, before factoring in property tax, sales tax, and cost-of-living differences.

Side-by-side comparison

State	Top rate	Pension	IRA	Est. annual tax	vs current
California (current)	13.30%	Taxed	Taxed	$6,916	—
Florida (best)	0.00%	Exempt	Exempt	$0	−$6,916
Texas	0.00%	Exempt	Exempt	$0	−$6,916

Estimates use each state's top marginal rate applied to taxable retirement income (Social Security taxed at 85% where applicable, mirroring federal treatment). Most states have brackets — actual tax may be slightly lower for moderate-income retirees. Pension and IRA exclusions baked in where stated.

Top 5 retirement tax-friendly states (1970)

Florida — no state income tax on Social Security, pension, or IRA withdrawals.
Texas — no state income tax on Social Security, pension, or IRA withdrawals.
Nevada — no state income tax on Social Security, pension, or IRA withdrawals.
Wyoming — no state income tax on Social Security, pension, or IRA withdrawals.
Tennessee — no state income tax on Social Security, pension, or IRA withdrawals.

Ranking factors in state income tax, SS/pension/IRA treatment, and average property + sales tax burden.

Notes for your selected states

California: Highest in US; SS exempt; IRA fully taxed
Florida: No state income tax
Texas: No state income tax

State Retirement Tax Comparison — How It Works

We use each state's top marginal income tax rate as of January 2026, applied to a stylized 'taxable retirement income' figure: pension + IRA withdrawals + other income, plus 85% of Social Security if the state taxes SS (mirroring the federal treatment used by most states that DO tax SS). For states that fully exempt a category (e.g., Pennsylvania exempts all retirement income), the corresponding income line is excluded from the taxable base.

This gives a conservative upper-bound estimate. Many states have progressive brackets and lower-income thresholds, so actual tax for a typical retiree may be 10–25% lower than the top-rate estimate. The relative ranking between states (which is what the comparison is about) is highly accurate even with the simplification.

Property tax, sales tax, and estate tax are NOT included in the calculation — but they often determine whether a 'low income tax' state is actually cheap to live in (e.g., Texas has no income tax but property tax averages $3,800/year). The 'Top 5 retirement tax-friendly states' list factors all three into its ranking.

Frequently Asked Questions

Nine states have zero state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire previously taxed interest and dividends but fully repealed that in 2025. None of these tax Social Security, pension, or IRA distributions at the state level — though property and sales taxes vary widely (Texas has high property taxes; Florida is moderate; Wyoming is the lowest overall tax burden).

How Gold IRA Blueprint Keeps This Tool Accurate

State tax data is reviewed quarterly against each state's department of revenue. Major updates occur each January (new tax year) and July (mid-year legislative changes). Recent changes tracked: West Virginia phase-out of SS tax (complete by 2026), New Hampshire interest-and-dividends repeal (2025), and Arizona flat 2.5% rate (effective 2024).

Last reviewed: January 2026 — next review January 2027

Gold IRA Blueprint|State Retirement Tax Comparison