Which 13 States Don't Tax Retirement Income?

Key Points

• Distributions from retirement savings accounts and Social Security income are taxed differently in most states.

• Even in states that do tax retirement income, it’s possible that senior residents will qualify for sizeable tax breaks.

• To be sure, current and future retirees will want to make a detailed comparison of all their options.

• The $23,760 Social Security bonus most retirees completely overlook ›

Do you want to maximize your income in retirement? Believe it or not, where you live can make a difference. Your money won't achieve better returns in one place as opposed to another. But you may be able to keep more of your money by living in particular locale. See, some states don't tax retirement income.

Here's a rundown of what you need to know.

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States that don't tax retirement income

To be clear, you're going to be subject to the same federal taxation no matter where you reside in retirement. This tax bill, of course, makes up the lion's share of everyone's total income tax liability. Still, if sidestepping state-based taxation can save you even just a couple thousand bucks a year, it wouldn't be crazy to at least consider a move.

So which states don't tax retirement income? It depends on your definition of retirement income. A handful of states don't tax distributions from retirement savings vehicles like 401(k) accounts or ordinary IRAs, while most states don't tax Social Security income.

As of the 2025 tax year, nine states don't tax retirees' income of any type -- but not necessarily as a favor to their older residents. These states simply don't charge any income tax on any resident. Instead, these states collect enough revenue from other sources (like sales tax, or business taxes) to fund their state's governmental operations. These personal income tax-free states are:

• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

Then there are another four states that impose income tax on workers' ordinary wages, but still let retirees enjoy tax-free withdrawals from retirement accounts, and in most cases, tax-free pension income as well. These four states include:

• Illinois
• Iowa
• Mississippi
• Pennsylvania

There are some possibly important footnotes to add to this short list. In Iowa, for instance, you must also be 55 or older for IRA distributions to be tax-free. And, while the most common forms of retirement income in Pennsylvania don't create a tax liability, certain types of pension income are only tax-free if you're at least 60 years old. Mississippi only gives you this tax break to retirees if the retirement income in question doesn't qualify as an early distribution.

On balance, though, most people of retirement age will sidestep income taxation in these four states.

You'll also want to know that while every other state might tax at least part of your retirement income, many of them offer bigger deductions to older residents. For example, Georgia excludes up to $35,000 of income from taxation for residents between the ages of 62 and 64, and up to $65,000 for any aged 65 and older. It's worth exploring a particular state's tax rules for retirees if you've got one in mind. It might be more affordable to live there than you think.

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But what about Social Security? Good news -- most states don't tax this income at all even if they do tax other types of retirement income. In fact, so few do so that it's easier just to list the states that do tax your Social Security retirement benefits (in addition to any federal tax you'll owe the IRS for this income). Here are those nine states.

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia

Make a thorough comparison, but mostly...

There's more to life than minimizing your tax bills, of course. You may wish to retire near your children or grandchildren even if that means paying state taxes. It's also entirely possible a state that doesn't impose income tax on its retired residents has a much higher cost of living, offsetting any savings.

Consider your health and personal preferences too. Florida is hot and humid for most of the year, while Nevada is hot and dry. Real estate taxes in Texas are getting a bit uncomfortable, even if income isn't taxed. And there's not a lot to do in many parts of Wyoming. In other words, there's always more to the story.

Your action plan, therefore, should be making side-by-side comparisons of all the places you might like to live in retirement. Flesh out the numerical upsides and downsides of each, and turn that information into a prospective budget. Flesh out the qualitative reasons to reside in one place or another in retirement as well. Then give the matter a few weeks, or months, or maybe even years. Moving anywhere is a pretty big deal, after all.

More than anything, don't forget that retirement is a time of life you're supposed to enjoy. You've worked hard to get there. It's a chance to reward that hard work just by living in a place that lets you do so. That alone is worth more than any amount of money you might end up saving or spending.

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