- Not all states are equally friendly to retirees. From sales tax to property tax, paying taxes can be a big expense to retired people living on a fixed income in the US.
- Data from Kiplinger shows that nine states stand out when it comes to tax affordability, based on low income, property, sales, and estate taxes.
- Wyoming, Nevada, and Delaware top the list of the best states for retirement taxes thanks to low property and income taxes.
- Read more personal finance coverage.
Personal finance site Kiplinger created a list of the most tax-friendly states in the US for retirees, and considered factors like average property tax paid, income tax rate, whether or not the state had an estate or inheritance tax, and the sales tax across all 50 states. Wyoming came out on top, offering the most affordable taxes all around.
None of the states on the list tax Social Security income. Three states on the list – Wyoming, Nevada, and Florida – don’t have any income tax.
While it’s not possible to change federal taxes, these tax-friendly states could help retirees save on state taxes. Here are the nine best states for retirees wanting to save on their tax bills, along with each state’s income and property tax rates.
The Peach State has nice weather most of the year and relatively low taxes, making it a friendly state for retirees.
Income taxes: 1% to 5.95%
Average property tax: $US1,000 per $US100,000 in home value
With no state income tax, Florida retirees will be able to keep more of their money.
Income taxes: none
Average property tax: $US1,041 per $US100,000 in home value
Mississippi residents have a big benefit when it comes to retirement: funds from IRAs, 401ks, and other retirement accounts aren’t taxed. Combine that with low property tax rates, and it’s easy to see why Mississippi is ideal for retirees.
Income taxes: 3% to 5%
Average property tax: $US862 per $US100,000 in home value
With both urban and rural settings and acres of nature, Tennessee is more than just good for tax savings. Affordable property taxes make it easy to own your own home in this state as well.
Income taxes: No income tax, 2% on interest and dividends
Average property tax: $US768 per $US100,000 in home value
5. South Carolina
Retirees wanting coastal living and tax savings might find that making a home in South Carolina is ideal. With low income taxes, affordable property taxes, and generous retirement income exclusions, this state’s nice weather is only part of the reason to move there.
Income taxes: 3% to 7%
Average property tax: $US601 per $US100,000 in home value
Alabama residents will have low living costs and affordable taxes. Low income and property taxes will make it easy for retirees to make a home there.
Income taxes: 2% to 5%
Average property tax: $US432 per $US100,000 in home value
With lots of shoreline and no sales tax, Delaware is ideal for retirees. While the state’s property taxes are slightly higher than some of the southern and western states on the list, it’s still fairly tax-friendly to live there.
Income taxes: 2.2% to 6.6%
Average property tax: $US604 per $US100,000 in home value
This affordable western state has been attracting retirees in droves in the past few years, and it’s tax-friendliness might be why.
Income taxes: none
Average property tax: $US693 per $US100,000 in home value
Taxes in Wyoming are incredibly low across the board, from property to sales tax. This state doesn’t have any income tax, and there’s no estate or inheritance tax either. Throw in relatively affordable costs of living, and Wyoming might just be the ideal state for retirement.
Income taxes: none
Average property tax: $US635 per $US100,000 in home value
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