Retirees have special concerns when evaluating state tax policies. For instance, the mortgage might be paid off, but how bad are the property taxes – and how generous are the property tax breaks for seniors? Are Social Security benefits taxed? What about your other forms of retirement income, including IRAs and pensions? Does the state impose its own estate tax, which might subtract from your legacy? The answers could determine which side of the state border you’ll settle on in retirement.
These 10 states impose the lowest taxes on retirees, according to Kiplinger’s exclusive 2016 analysis of state taxes. All of these states exempt Social Security benefits from state taxes. Most exempt at least a portion of other retirement income, such as pensions and withdrawals from tax-deferred retirement plans.