Which states tax retirement income the least? No income tax states plus those exempting pensions and Social Security.
Tax-friendly retirement states combine no income tax (protecting pensions, Social Security, and retirement withdrawals) with affordable living. Alaska leads this ranking with the highest cost-adjusted take-home on retirement income.
The 9 no-income-tax states are the obvious winners for retirees, since all retirement income (Social Security, 401k withdrawals, pension) is state-tax-free. Among them, states with lower cost of living like South Dakota, Tennessee, Texas offer the best purchasing power.
| # | State | Tax Rate | Type | Take-Home | Monthly | Eff. Rate | Cost Index | Cost-Adj. |
|---|---|---|---|---|---|---|---|---|
| 1 | Alaska | 0% | None | $79,125 | $6,594 | 20.9% | 127 | $62,303 |
| 2 | Florida | 0% | None | $79,125 | $6,594 | 20.9% | 100 | $79,125 |
| 3 | Nevada | 0% | None | $79,125 | $6,594 | 20.9% | 101 | $78,342 |
| 4 | New Hampshire | 0% | None | $79,125 | $6,594 | 20.9% | 108 | $73,264 |
| 5 | South Dakota | 0% | None | $79,125 | $6,594 | 20.9% | 92 | $86,005 |
| 6 | Tennessee | 0% | None | $79,125 | $6,594 | 20.9% | 90 | $87,917 |
| 7 | Texas | 0% | None | $79,125 | $6,594 | 20.9% | 93 | $85,081 |
| 8 | Washington | 0% | None | $79,125 | $6,594 | 20.9% | 110 | $71,932 |
| 9 | Wyoming | 0% | None | $79,125 | $6,594 | 20.9% | 94 | $84,176 |
| 10 | North Dakota | 1.95% | Grad. | $77,858 | $6,488 | 22.1% | 92 | $84,628 |
| 11 | Arizona | 2.5% | Flat | $76,625 | $6,385 | 23.4% | 97 | $78,995 |
| 12 | Arkansas | 3.9% | Grad. | $76,590 | $6,383 | 23.4% | 86 | $89,058 |
| 13 | Louisiana | 4.25% | Grad. | $76,363 | $6,364 | 23.6% | 91 | $83,915 |
| 14 | Nebraska | 4.55% | Grad. | $76,168 | $6,347 | 23.8% | 91 | $83,701 |
| 15 | Oklahoma | 4.75% | Grad. | $76,038 | $6,336 | 24.0% | 87 | $87,399 |
| 16 | Mississippi | 5% | Grad. | $75,875 | $6,323 | 24.1% | 83 | $91,416 |
| 17 | West Virginia | 5.12% | Grad. | $75,797 | $6,316 | 24.2% | 83 | $91,322 |
| 18 | Montana | 5.65% | Grad. | $75,453 | $6,288 | 24.5% | 97 | $77,786 |
| 19 | Kansas | 5.7% | Grad. | $75,420 | $6,285 | 24.6% | 90 | $83,800 |
| 20 | Virginia | 5.75% | Grad. | $75,388 | $6,282 | 24.6% | 103 | $73,192 |
| 21 | Iowa | 3.8% | Flat | $75,325 | $6,277 | 24.7% | 89 | $84,635 |
| 22 | New Mexico | 5.9% | Grad. | $75,290 | $6,274 | 24.7% | 91 | $82,736 |
| 23 | Rhode Island | 5.99% | Grad. | $75,232 | $6,269 | 24.8% | 105 | $71,649 |
| 24 | North Carolina | 3.99% | Flat | $75,135 | $6,261 | 24.9% | 95 | $79,089 |
| 25 | South Carolina | 6.4% | Grad. | $74,965 | $6,247 | 25.0% | 92 | $81,484 |
| 26 | Ohio | 2.75% | Flat | $74,875 | $6,240 | 25.1% | 90 | $83,194 |
| 27 | Colorado | 4.4% | Flat | $74,725 | $6,227 | 25.3% | 105 | $71,167 |
| 28 | Indiana | 2.95% | Flat | $74,675 | $6,223 | 25.3% | 90 | $82,972 |
| 29 | Connecticut | 6.99% | Grad. | $74,582 | $6,215 | 25.4% | 111 | $67,191 |
| 30 | Pennsylvania | 3.07% | Flat | $74,555 | $6,213 | 25.4% | 98 | $76,077 |
| 31 | Missouri | 4.8% | Grad. | $74,505 | $6,209 | 25.5% | 89 | $83,713 |
| 32 | Maine | 7.15% | Grad. | $74,478 | $6,206 | 25.5% | 98 | $75,997 |
| 33 | Utah | 4.65% | Flat | $74,475 | $6,206 | 25.5% | 99 | $75,227 |
| 34 | Alabama | 5% | Grad. | $74,375 | $6,198 | 25.6% | 88 | $84,517 |
| 35 | Illinois | 4.95% | Flat | $74,175 | $6,181 | 25.8% | 93 | $79,758 |
| 36 | Wisconsin | 7.65% | Grad. | $74,153 | $6,179 | 25.8% | 93 | $79,734 |
| 37 | Kentucky | 3.5% | Flat | $74,125 | $6,177 | 25.9% | 90 | $82,361 |
| 38 | Massachusetts | 5% | Flat | $74,125 | $6,177 | 25.9% | 118 | $62,818 |
| 39 | Georgia | 5.19% | Flat | $73,935 | $6,161 | 26.1% | 93 | $79,500 |
| 40 | Maryland | 5.75% | Grad. | $73,888 | $6,157 | 26.1% | 112 | $65,971 |
| 41 | Idaho | 5.3% | Flat | $73,825 | $6,152 | 26.2% | 95 | $77,711 |
| 42 | Vermont | 8.75% | Grad. | $73,438 | $6,120 | 26.6% | 105 | $69,940 |
| 43 | Michigan | 4.25% | Flat | $73,375 | $6,115 | 26.6% | 91 | $80,632 |
| 44 | Delaware | 6.6% | Grad. | $73,335 | $6,111 | 26.7% | 102 | $71,897 |
| 45 | Minnesota | 9.85% | Grad. | $72,723 | $6,060 | 27.3% | 99 | $73,457 |
| 46 | New Jersey | 10.75% | Grad. | $72,138 | $6,011 | 27.9% | 115 | $62,728 |
| 47 | Hawaii | 11% | Grad. | $71,975 | $5,998 | 28.0% | 192 | $37,487 |
| 48 | Oregon | 9.9% | Grad. | $71,190 | $5,933 | 28.8% | 110 | $64,718 |
| 49 | New York | 10.9% | Grad. | $70,540 | $5,878 | 29.5% | 125 | $56,432 |
| 50 | California | 13.3% | Grad. | $70,480 | $5,873 | 29.5% | 142 | $49,634 |