Best States for Retirees (Tax Rankings) (2025)
Retirement tax friendliness depends on multiple factors: whether the state taxes Social Security, pension/401(k) exclusions, property tax burden, estate/inheritance tax, and overall tax burden. We score each dimension and rank the total.
| Rank | State | Rating |
|---|---|---|
| 1 | Alaska | Very Friendly |
| 2 | Arizona | Very Friendly |
| 3 | Florida | Very Friendly |
| 4 | Mississippi | Very Friendly |
| 5 | Nevada | Very Friendly |
| 6 | New Hampshire | Very Friendly |
| 7 | South Carolina | Very Friendly |
| 8 | South Dakota | Very Friendly |
| 9 | Tennessee | Very Friendly |
| 10 | Texas | Very Friendly |
| 11 | Wyoming | Very Friendly |
| 12 | Colorado | Friendly |
| 13 | Delaware | Friendly |
| 14 | Georgia | Friendly |
| 15 | Illinois | Friendly |
| 16 | Louisiana | Friendly |
| 17 | Missouri | Friendly |
| 18 | New Mexico | Friendly |
| 19 | North Carolina | Friendly |
| 20 | North Dakota | Friendly |
| 21 | Oklahoma | Friendly |
| 22 | Pennsylvania | Friendly |
| 23 | Washington | Friendly |
| 24 | Alabama | Moderate |
| 25 | Arkansas | Moderate |
| 26 | Hawaii | Moderate |
| 27 | Idaho | Moderate |
| 28 | Indiana | Moderate |
| 29 | Iowa | Moderate |
| 30 | Kansas | Moderate |
| 31 | Kentucky | Moderate |
| 32 | Maine | Moderate |
| 33 | Maryland | Moderate |
| 34 | Massachusetts | Moderate |
| 35 | Michigan | Moderate |
| 36 | Montana | Moderate |
| 37 | Nebraska | Moderate |
| 38 | New Jersey | Moderate |
| 39 | New York | Moderate |
| 40 | Ohio | Moderate |
| 41 | Oregon | Moderate |
| 42 | Rhode Island | Moderate |
| 43 | Virginia | Moderate |
| 44 | Wisconsin | Moderate |
| 45 | California | Unfriendly |
| 46 | Connecticut | Unfriendly |
| 47 | Minnesota | Unfriendly |
| 48 | Utah | Unfriendly |
| 49 | Vermont | Unfriendly |
| 50 | West Virginia | Unfriendly |
Methodology
Composite score based on: Social Security taxation (25%), retirement income exclusions (25%), property tax rate (20%), estate/inheritance tax (15%), and total tax burden (15%).
Frequently Asked Questions
Frequently Asked Questions
Most states do not tax Social Security. As of 2025, only a handful of states tax Social Security income, and several of those offer partial exemptions based on income level.
Key factors include: no tax on Social Security, exemptions for pension and 401(k) income, low property taxes, no estate or inheritance tax, and a low overall tax burden.
No. Cost of living, healthcare access, climate, and quality of life matter too. A state with slightly higher taxes but lower housing costs and better healthcare may be a better overall choice.
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Capital Gains Tax by State
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Estate & Inheritance Tax by State
Which states have estate or inheritance taxes, exemption amounts, and how they compare — including Maryland, the only state with both.
See How Taxes Affect Your Paycheck
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