Compare state tax burdens across 3 states for retirement income. See income tax, property tax, and sales tax side-by-side to find the best state to retire in.
How to Use This State Tax Comparison Calculator
Enter your expected annual retirement income across all sources β Social Security, pension, 401k/IRA withdrawals, and investment income. Then add your home value and annual spending to estimate property and sales tax. Select three states to compare and see a full breakdown of your total state tax burden in each.
Note: This calculator uses average effective rates and simplified income tax rules as a planning estimate. Actual taxes may vary based on local rates, exemptions, and deductions. Consult a tax advisor before making relocation decisions.
The Formula
Income Tax = Effective State Rate Γ (Taxable Pension + IRA + Investment Β± SS if taxed)
Property Tax = Home Value Γ State Average Effective Rate
Sales Tax = Annual Spending Γ State Average Combined Rate
Total Burden = Income Tax + Property Tax + Sales Tax
Example
$24K SS, $30K pension, $20K IRA, $10K investment β Florida vs. California:
Florida: $0 income tax (no state tax) + $350K Γ 0.80% property = $2,800 + $40K Γ 7.0% sales = $2,800. Total: $5,600
California: ($30K+$20K+$10K) Γ 9.3% = $5,580 income + $350K Γ 0.76% = $2,660 property + $40K Γ 8.8% = $3,520 sales. Total: $11,760
Florida saves $6,160/year vs. California
Frequently Asked Questions
Which states have no income tax for retirees?
Seven states have no state income tax at all: Florida, Texas, Nevada, Wyoming, Alaska, South Dakota, and Tennessee (Tennessee taxes only investment income above a threshold). Washington and New Hampshire also have no wage income tax. These states are generally favorable for retirees, though property and sales taxes vary significantly.
Do all states tax Social Security benefits?
No. Most states exempt Social Security from state income tax. Only 9 states tax SS benefits to some degree: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Even those states often have income-based exemptions that eliminate the tax for lower-income retirees.
What is an effective property tax rate?
The effective property tax rate is annual property taxes paid divided by the assessed home value. It differs from the nominal millage rate because many states assess property at less than full market value. For example, a state with a 1.5% effective rate on a $400,000 home means you pay roughly $6,000 per year in property taxes.
How does sales tax affect retirees?
Sales tax is a hidden cost that hits retirees on fixed incomes disproportionately. Combined state and local sales tax rates range from 0% (Oregon, Montana, New Hampshire, Delaware) to over 10% in some Louisiana and Tennessee localities. Many states exempt groceries and prescription drugs, which reduces the burden for retirees.
Should I move states to save on retirement taxes?
Tax savings are one factor, but not the only one. Also consider: cost of living (housing, healthcare), proximity to family, climate, quality of healthcare facilities, Medicaid rules, and estate/inheritance taxes. A state saving $5,000/year in income tax may cost more in property tax or cost of living. Run the full numbers before deciding.