Best States for Retirement

Deciding where to retire isn’t always a straightforward answer. Does it make the most sense to stay put in your home state? Do you want to move closer to family? Are you looking for that retirement getaway to better temperatures and scenic views?

And of course, there’s also the financial implications of where you choose to move. That’s why we’ve put together our list of the best states for retirees based on financial benefits and quality of life. Read on to learn more about the top states for retirement in 2025.

Are Some States Better Financially for Retirees?

Certain states have more financial perks that can make them more appealing to retirees. We’re talking taxes, namely tax breaks that can leave more of your important retirement money in your wallet. Here’s a breakdown of the top benefits to look out for and examples of states that offer them as of 2025:

• No state income taxes: Nine states have no income tax—Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. The list now includes New Hampshire which has done away with state taxes on interest and dividends as of 2025.
• No state taxes on annuity income payments: In states like Florida, Illinois, Pennsylvania, and Wyoming, income payments from annuities are not taxed, leaving more of your guaranteed income intact over a lifetime of payouts.
• No state estate taxes: Many of the 50 states, including Arkansas, Delaware, Michigan, and more do not have estate taxes which can be a significant savings for your heirs.
• No state retirement income taxes on 401(k)s, pensions, and IRAs: What about retirement income? Some states, like Mississippi and Texas, do not tax withdrawals from retirement accounts including 401(k)s, pensions, and IRAs, leaving more of your nest egg in-tact.
• No state taxes on Social Security benefits: Most states do not tax Social Security benefits, which is a win for retirees. Most, but not all. There are nine states that do have taxes on Social Security benefits which includes Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia.
• No state sales taxes: States such as Delaware and New Hampshire are sales tax free, which can reduce overall living costs and allow your retirement savings to stretch further. Still, be aware municipalities within sales tax free states may have their own local taxes on certain goods and services.

Disclaimer:

We work hard to make sure that the information in our articles is accurate when we publish them. But tax laws change regularly, especially at the state level. If you find that this article is out of date or missing key information, please let us know, and we’ll update it.

Best States for Retirement in 2025

Delaware

If you are looking for retirement destinations in the Mid-Atlantic, Delaware has become a popular pick among retirees. Delaware has no sales tax, no taxes on Social Security benefits, offers deductibles on retirement income, and no estate or inheritance taxes. According to the 2020 US Census, 20% of Delaware's population is aged 65 or older, making it one of the top five states with a high population of retirement-age people.

Wyoming

Looking for one of the best states for retirement out west? Wyoming has plenty of retirement tax advantages including no income tax, no inheritance tax, and no estate tax. It’s also a pretty affordable state to live in, with a cost of living generally lower than the national average.

Florida

With its warm weather and favorable taxes, Florida is consistently among the best states to retire in. Benefits include no state income tax, no 401(k) and IRA tax, no pension tax, no estate tax, and no inheritance tax. Florida also is known to have high-quality health care to serve seniors that make up 21.30% of the state population (the second highest senior population in the country).

Pennsylvania

In recent years several Pennsylvania cities, including Harrisburg, Reading, and Lancaster, PA, have become increasingly popular places to retire. That’s with good reason, since Pennsylvania has historical richness, natural beauty, and great tax benefits for retirees. Pennsylvania has a relatively low state income tax, no 401(k) and IRA tax, no pension tax, no annuity income tax, and no Social Security tax.

Idaho

With its favorable tax incentives and sweeping outdoor landscapes for fishing, hiking, and boating, Idaho is another one of the best states for retirees out west. Despite a higher state income tax, the lack of taxes on Social Security income, estates, and lower taxes pensions makes it financially attractive place to retire.

New Hampshire

New Hampshire is a top choice for retirees where you can expect tax-free living on income and purchases. New Hampshire has no income tax, no sales tax, no Social Security tax, no pension tax, no IRA tax, no 401(k) tax, and no estate tax. From the White Mountains to its charming cities, there’s plenty to enjoy aside from the financial perks in New Hampshire.

Choose Where You Want to Retire

When you are deciding where to retire, strategizing based on financial benefits can help you live comfortably off your retirement savings. Of course, you’ll balance this with other factors. Your social circle, family, and lifestyle are part of the equation too. But, knowing some of the best states for retiree and understanding important tax benefits can help stretch your retirement dollars to live the life you want.

Want to dive deeper into planning your perfect retirement? Explore our free and comprehensive Canvas Retirement Visualization guide and more retirement planning resources to ensure you're making the most informed decisions for your golden years.