by Robert Borges on May 2, 2025
When planning your ideal retirement, choosing the right location goes beyond climate and lifestyle—it’s also about financial security. One of the most important considerations is selecting from states tax friendly to retirees. These states help reduce the financial burden in retirement by offering low or no taxes on income, Social Security benefits, pensions, and property.
By retiring in one of these retirement tax friendly states, you can stretch your savings further and enjoy more of what matters in your golden years. Below, we explore what makes these states appealing from a tax perspective—and spotlight some of the best places for a financially smart retirement.
What Makes States Tax-Friendly to Retirees?
A state’s tax friendliness depends on its approach to key areas like:
- Income Tax: States that don’t tax Social Security benefits or pensions are more attractive to retirees. Some even have no income tax at all.
- Property Tax: States with lower property tax rates or generous exemptions for seniors provide significant savings.
- Sales Tax: Lower sales taxes—or exemptions on necessities like groceries—are another consideration.
- Estate and Inheritance Taxes: These can significantly impact retirees looking to leave wealth to their families.
Top Retirement Tax Friendly States
1. Florida
Florida is a perennial favorite among retirees, and its tax benefits are a big reason why. The Sunshine State has no state income tax, which means no taxes on Social Security, pensions, or withdrawals from retirement accounts. Additionally, Florida offers a homestead exemption to help seniors save on property taxes.
Retirees are also drawn to Florida for its warm weather, affordable cost of living, and world-class amenities in its active adult communities.
2. South Carolina
South Carolina is another tax-friendly option for retirees. Social Security benefits are not taxed, and residents over 65 can deduct up to $15,000 of other retirement income from their state income taxes. Property taxes are also some of the lowest in the country, and retirees may qualify for homestead exemptions.
With its charming coastal towns and picturesque mountains, South Carolina also offers the benefits of 55 communities designed for active lifestyles.
3. Tennessee
Tennessee combines no state income tax with relatively low property taxes, making it an excellent choice for retirees. While there is a sales tax on most goods, the state’s lack of taxation on income or retirement benefits more than makes up for it.
Tennessee is especially popular among nature-loving retirees, with stunning lakefront and mountain views. Its vibrant lifestyle communities cater to those seeking outdoor activities and a welcoming community.
4. Texas
The Lone Star State has no state income tax, making it particularly appealing to retirees looking to protect their nest eggs. Property taxes can be higher here, but Texas offsets this with homestead exemptions and property tax freezes for seniors in many areas.
Texas is also home to some of the country’s most sought-after retirement destinations, with active adult home builders crafting neighborhoods that prioritize convenience and luxury.
5. Delaware
Known for its affordability, Delaware doesn’t tax Social Security benefits, and residents over 60 can exclude up to $12,500 of retirement income. The state also boasts low property taxes and no sales tax, making it a top pick for budget-conscious retirees.
Beyond its tax benefits, Delaware’s proximity to the coast and historic charm attracts retirees seeking a peaceful yet connected lifestyle.
Other Tax-Friendly States to Consider
Nevada
Like Florida and Texas, Nevada has no state income tax. It’s also one of the country’s fastest-growing states for retirees, thanks to its sunny weather, low cost of living, and vibrant active adult communities.
Wyoming
Wyoming is another hidden gem for retirees. With no state income tax, low property taxes, and no estate or inheritance taxes, Wyoming is a haven for retirees looking to save. Its wide-open spaces and outdoor recreation opportunities are an added bonus.
New Hampshire
While New Hampshire does tax dividends and interest, it has no income tax on salaries or retirement income. It also offers low property tax rates and no sales tax.
Georgia
Georgia has become increasingly attractive to retirees thanks to its favorable tax treatment of retirement income. The state offers generous exemptions for Social Security and other retirement income, along with relatively low property taxes. With a mild climate and low cost of living, it combines financial benefits with quality-of-life perks and offers several communities considered the best places to retire in Georgia.
The Financial and Lifestyle Benefits of Retirement Tax Friendly States
Choosing a tax-friendly state is more than just a financial decision—it’s a lifestyle choice. Many of these states not only offer tax advantages but are also home to incredible amenities, cultural opportunities, and welcoming 55+ communities.
Retirement in a tax-friendly state means:
- More Savings: Lower taxes let you keep more of your hard-earned money for travel, hobbies, or leaving a legacy.
- Greater Flexibility: Reduced financial stress gives retirees the freedom to explore their passions.
- Enhanced Quality of Life: Many tax-friendly states also offer natural beauty, warm weather, and thriving retirement communities.
Find Your Ideal Retirement Community with PrivateCommunities.com
Since 1996, Private Communities Registry (PCR) has partnered with the nation’s top lifestyle communities to showcase the best retirement destinations. Whether you’re seeking the camaraderie of the best retirement communities for active adults or exploring the country’s most tax-friendly states, PCR is your go-to resource to explore hundreds of destinations tailored to your lifestyle and financial goals.
Ready to find your perfect community in a retirement tax friendly state? Visit PrivateCommunities.com today to start your journey toward a brighter, tax-efficient retirement!
