Keep Every Penny: 9 States With No Retirement Income Tax

Retirement isn’t the time to let taxes eat into your hard-earned savings. For households nearing retirement, the average balance is just $14,500—making every dollar count. Luckily, nine U.S. states let you keep more of your money with zero income tax on pensions, 401(k)s, or IRAs.

These states offer huge savings and unbeatable perks. Here’s where your retirement dollars go further.

1. Alaska

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Alaska’s no-income-tax policy lets retirees keep their savings intact. Adding to the appeal, the Permanent Fund Dividend (PFD) gives residents yearly payouts from oil revenue, offering financial security.

The state’s stunning landscapes offer activities like fishing, skiing, and Northern Lights viewing, making it ideal for adventurous retirees who can handle the cold.

2. Florida

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Warm weather and no income tax attract retirees from all over. With these savings, there’s more room to enjoy activities like golfing, beach outings, or visiting cultural landmarks.

The state’s relatively low cost of living, along with attractions like Orlando’s theme parks and the Florida Keys, makes it a popular destination for budget-conscious retirees.

3. Nevada

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Tax-free retirement income allows retirees to make the most of their savings. Whether exploring the glitz of Las Vegas or the serenity of Lake Tahoe, the state offers diverse experiences.

A dry, sunny climate and an affordable cost of living make Nevada an exciting and practical choice for retirees seeking variety and adventure.

4. South Dakota

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Savings stretch further in a state with no income tax. Retirees can explore iconic landmarks like Mount Rushmore and Badlands National Park while enjoying the state’s affordability.

Friendly communities and a low cost of living create a relaxed, welcoming atmosphere. South Dakota’s combination of natural beauty and financial benefits is hard to beat.

5. Tennessee

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Tax-free retirement income is on the horizon as Tennessee phases out its tax on dividends and interest by 2025. This change adds to the state’s growing appeal.

Known for its vibrant music scene and the Great Smoky Mountains, Tennessee blends cultural attractions with outdoor adventures, making it a well-rounded retirement destination.

6. Texas

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A lack of income tax means more financial freedom for retirees. Whether enjoying bustling cities or relaxing along the Gulf Coast, there’s something for everyone.

With its warm climate, affordable living, and thriving economy, Texas offers retirees a mix of excitement and stability for their golden years.

7. Washington

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Retirees keep more of their savings while enjoying lush forests, rugged coastlines, and vibrant cities. Washington’s natural beauty and cultural landmarks make it a standout option.

Outdoor enthusiasts can explore hiking trails in the Cascades or watch whales in the Puget Sound, while city lovers can enjoy iconic spots like the Space Needle.

8. Wyoming

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Keeping your retirement income intact is easier in a state with no income tax. Its awe-inspiring landscapes, including Yellowstone and Jackson Hole, offer endless outdoor adventures.

Affordable living paired with a peaceful environment makes Wyoming ideal for retirees seeking tranquility and financial security.

9. New Hampshire

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A tax-free future is just around the corner as the state phases out taxes on dividends and interest by 2025. This change enhances its appeal to retirees.

Famous for its stunning fall foliage and quaint towns, New Hampshire offers a peaceful, scenic lifestyle for those seeking financial relief and natural beauty.

Source:

  1. National Institute on Retirement Security
  2. Thomson Reuters
Nancy Maffia » nancy
Nancy Maffia
Author & Editor | + posts

Nancy received a bachelor’s in biology from Elmira College and a master’s degree in horticulture and communications from the University of Kentucky. Worked in plant taxonomy at the University of Florida and the L. H. Bailey Hortorium at Cornell University, and wrote and edited gardening books at Rodale Press in Emmaus, PA. Her interests are plant identification, gardening, hiking, and reading.