Key Takeaways
- Retiring in a state that doesn’t tax 401(ok), IRA, or Social Safety withdrawals permits you to preserve extra of your revenue and stretch your financial savings additional.
- Of the highest 50 U.S. cities to retire, 18 are positioned in states with no state tax on retirement revenue.
- From low housing prices to entry to well being care, arts, and leisure, these tax-friendly cities present a steadiness of economic safety and high quality of life.
If you’re on a set retirement revenue, each greenback counts. That’s why it pays to stay in a state that gained’t tax your 401(ok), IRA, or Social Safety withdrawals—you get to maintain extra of your cash.
Earlier this yr, Investopedia compiled an inventory of 50 of the most effective cities to retire in throughout the U.S., utilizing knowledge like the typical value of residing and entry to journey, well being care, and leisure.
Of the 50 prime cities to retire in, 18 are positioned in states that don’t tax your 401(ok) or IRA withdrawals (or your Social Safety advantages, for that matter). Right here they’re grouped by area.
Midwest
Gregory, South Dakota
Gregory is a small city with simply over 1,200 residents. Whereas the median family solely earns $52,432 per yr, these earnings stretch additional attributable to low residing prices. For instance, common housing prices on the county degree are simply $589 per thirty days. And the broader space provides “world-class looking alternatives,” based on the city’s web site.
Corning, Iowa
Corning is a barely bigger city with a inhabitants of almost 1,500. On prime of getting no state tax on 401(ok) and Social Safety withdrawals, it provides a comparatively low median county residence worth of $116,900. That’s almost a fourth of the nationwide median residence worth of $410,800. It is also the birthplace of Johnny Carson, who hosted “The Late Present” for almost three a long time.
Mason Metropolis, Iowa
Mason Metropolis is a medium-sized city with almost 26,800 residents. It combines Midwestern affordability with fashionable facilities, like arts and leisure. Embedded all through the city is a big assortment of Prairie Faculty-style structure, together with Frank Lloyd Wright’s final remaining resort. Its Music Man Sq. honors its connection to the musical The Music Man, whose author and composer, Robert Meredith Wilson, was born in Mason Metropolis.
Northeast
Hermitage, Pennsylvania
Positioned on the Pennsylvania-Ohio border, Hermitage not solely doesn’t have a state tax on retirement revenue, however the whole common month-to-month tax prices for 2 adults and no youngsters is comparatively low at $560. This allows you to preserve extra of your revenue. Hermitage is the location of the world’s solely free golf course, in addition to points of interest together with Buhl Farm Park and a state-of-the-art Meals Waste to Power facility.
Johnstown, Pennsylvania
Johnstown lies about 67 miles east of Pittsburgh, making it a simple day journey to the Metal Metropolis. This provides you entry to city facilities with out the related larger residing prices. The truth is, the median county-level residence worth in Johnstown is simply $115,900. (If you happen to promote a high-value residence to maneuver right here, you may retire mortgage-free.) The city is residence to a world-class polka pageant in addition to quite a few choices to benefit from the open air.
Altoona, Pennsylvania
Altoona is the biggest city in Pennsylvania on our record with over 42,400 residents. It’s a really perfect retirement vacation spot for these in search of not solely affordability but in addition entry to facilities. Altoona is residence to a nationwide historic landmark referred to as Horseshoe Curve, a Nineteenth-century marvel of engineering that pushes trains by way of a dramatic curve. There’s additionally a regional delicacy referred to as Altoona-style pizza and Amish farm markets to discover.
Conway, New Hampshire
Positioned on the New Hampshire-Maine border, on the southeastern fringe of the White Mountain Nationwide Forest, Conway is a small city comprised of 5 villages. The outside supply many points of interest, from Cathedral Ledge to Echo Lake, in addition to a number of ski resorts. The Conway Scenic Railroad shuttles guests and residents throughout the broader space—it is a handy possibility for day journeys. Residents can get pleasure from its small city attraction together with a comparatively low tax burden. On prime of no state tax on retirement withdrawals, the typical month-to-month tax prices are $609.
Harmony, New Hampshire
Harmony is New Hampshire’s capital. It’s a medium-sized city with almost 44,800 residents and many artwork, tradition, historical past, and issues to do. Its most important avenue just lately underwent a $14 million renovation—it is bursting with eating choices. Different points of interest embody the Capitol Heart for the Arts, which hosts performances, and, for the science-minded, the McAuliffe-Shepard Discovery Heart. There’s additionally the historic State Home. Plus, you’re just one hour from Boston and half-hour from the Manchester-Boston Regional Airport.
Southeast
Natchez, Mississippi
Natchez is a small city on the Mississippi River. “Thought-about the birthplace of Mississippi,” its guests web site reads, Natchez “is thought internationally as a quaint Southern city with a tradition and heritage enriched by the contributions of many.” There are annual festivals, together with the Balloon Pageant Weekend in October. What makes Natchez stand out amongst retirement locations is its extremely low housing prices.
Quick Truth
The median county-level residence worth in Natchez, Mississippi is simply $106,300, the bottom on our record.
Sebring, Florida
Sebring is a small city in central Florida that gives a damp subtropical local weather with scorching summers and delicate winters. If you happen to’re searching for a retirement vacation spot the place good climate meets tax advantages, Sebring is likely to be it. There’s a lot to discover, beginning with the Sebring Worldwide Raceway. There are cultural choices (together with a set of murals in a close-by city) and over 100 lakes within the space, in addition to a state park.
Paris, Tennessee
Although it shares a reputation with an expensive metropolis abroad, Paris, Tennessee, is remarkably inexpensive. It provides small-town attraction coupled with a low tax burden. Not solely will your retirement revenue not be taxed, however the common month-to-month tax prices for 2 adults and no children is simply $511. Along with bakeries, parks, and different points of interest, there’s even a duplicate of the Eiffel Tower on the town.
Southwest
Port Arthur, Texas
Generally known as the official Cajun Capital of Texas, Port Arthur is a big city that sits on the Gulf of America. It is about 90 miles east of Houston. Janis Joplin is a Port Arthur native—she’s featured within the close by Museum of the Gulf Coast. If you happen to get pleasure from Cajun seafood, water views, and low taxes, Port Arthur is likely to be for you.
Eagle Cross, Texas
Positioned in southern Texas on the U.S.-Mexico border, Eagle Cross is a medium-sized city with over 28,300 residents and a low value of residing. The common month-to-month value of meals is $470, and common month-to-month county-level tax prices for 2 adults can be $470. The one on line casino in Texas, the Fortunate Eagle On line casino, is positioned simply outdoors of city.
Longview, Texas
Longview is a big city about 130 miles east of Dallas. “Our rolling hills are a favourite for vacationers of all types, whether or not they experience two, three or 4 wheels, on the street or off,” its web site says. It’s identified for its Nice Texas Balloon Race and stay downtown live shows, so in case you’re searching for enjoyable, leisure, and a low tax burden, Longview is a good selection.
West
Pomeroy, Washington
Pomeroy is a small city within the southeast nook of Washington. In comparison with the remainder of the state, it has low month-to-month residing prices: $716 for housing and $526 for taxes for 2 adults and no children. It is residence to a historic most important avenue.
Omak, Washington
Omak is positioned within the foothills of the Okanogan Highlands in north-central Washington. For a city of solely about 5,050 residents, it has ample entry to facilities. There are additionally a number of occasions to sit up for, together with a Zombie Enjoyable Run.
Carson Metropolis, Nevada
Carson Metropolis is a big city just some miles from Lake Tahoe, the biggest alpine lake in North America. Those that retire right here have entry to stunning waterfronts and lake actions with out the burden of a state tax on retirement revenue.
Evanston, Wyoming
Evanston is a small city within the southwest nook of Wyoming. On prime of not having to pay state taxes on retirement revenue, residents don’t should pay state taxes on any particular person or company revenue. The truth is, the state ranks 1st total on the Tax Basis’s 2025 State Tax Competitiveness Index.
Easy methods to Optimize Your 401(ok) or IRA Withdrawals
To take advantage of your 401(ok) or IRA withdrawals, observe these greatest practices:
- Begin along with your RMDs: A required minimal distribution (RMD) is the quantity you will need to withdraw out of your 401(ok) or IRA after age 73 to keep away from dealing with penalties. Begin by withdrawing at the very least this quantity.
- Plan withdrawals round taxes: Withdraw out of your 401(ok) or IRA earlier than withdrawing from tax-free accounts like a Roth IRA to reduce your lifetime taxes.
- Plan withdrawals round deductions: Some tax deductions for older adults have revenue limits. Plan your retirement revenue withdrawals accordingly.
The Backside Line
Not having to pay state taxes in your 401(ok) or IRA withdrawals is an enormous benefit. It signifies that each month much less of your cash will go to the federal government and extra will keep in your pocket. This helps your retirement financial savings last more and will help you afford actions, journeys, and different bills you won’t be capable of afford in any other case. So it is price attempting one in every of these locations for retirement—you is likely to be shocked at what you discover.
