10 Most Tax-Friendly States for Retirees in 2026
Chances are, you’ve been waiting to tell people you’re retired since the day you clocked into work for the very first time. Now that it’s here, you’re probably ready to enjoy retirement to the fullest. Maybe you’re content to retire in the home you bought in your twenties, in the town you were born and raised in. Or maybe you want to start your retirement adventure somewhere else, like a retirement community or even a new state! After all, some states are more retiree-friendly than others, particularly when it comes to taxes. So, that begs the question: which states are the most tax-friendly for seniors? And what are some other reasons you should move to them?
1. Mississippi
According to Kiplinger, Mississippi is the number-one most tax-friendly state! That’s because it has the lowest property taxes out of all the states that don’t take a chunk of traditional retirement income. Bonus points? There are no estate or inheritance taxes in Mississippi! However, we’d be remiss if we didn’t note that Mississippi taxes groceries at 5%, which is higher than most other places in the country.
2. Alaska
If you love cold, snowy weather, then you might want to retire in Alaska. Not only does it have no state income tax, but your Social Security benefits and pension won’t be taxed, either! Oh, and did we mention there’s also no estate or inheritance tax? However, there’s a catch: the cost of living in Alaska isn’t exactly cheap. In fact, it’s the fifth least affordable state in the US, with SoFi noting that it’s 26% more expensive to live in than the national average.
3. Florida
You knew a list like this had to include Florida, right? Often hailed as a retirement paradise, the Sunshine State boasts gorgeous beaches, thousands of entertainment options, and zero taxes on capital gains, income, and inheritances. Plus, you won’t have to pay much in property taxes, either! However, paradise does come with a price tag. Namely, the cost of living in Florida is higher than you might think, ranking 35th in affordability. Sofi notes that housing will probably be your biggest expense, with the typical value of a Floridian home coming in at around $385,000. And, of course, depending on where you live and the time of the year, you might have to contend with some hurricanes.
4. Nevada
You don’t need Lady Luck on your side if you decide to retire in Nevada! That’s because it offers no taxes on capital gains, income, inheritance, or estates. Las Vegas is a particularly good retirement destination, with low property taxes and mild weather. However, before you pack your bags and set off to Nevada, make sure you keep in mind that its sales tax is over 8%, making it one of the highest in the United States!
5. Tennessee
What comes to mind when you think about Tennessee? Mountains? Black bears? Dolly Parton? Well, how about you add “excellent retirement destination” to that list? That’s right―the Volunteer State is one of the best places to retire, thanks to its low property taxes and lower-than-average cost of living. But wait! There’s more! Tennessee also doesn’t tax its residents on their income, capital gains, or inheritance. But before you buy your very own log cabin and book a trip to Dollywood, you should probably know that Tennessee has the second-highest sales tax in the entire country, second only to Louisiana.
6. New Hampshire
New Hampshire is one of those forgettable states, along with Delaware and Arkansas. (Sorry if we offended anyone who lives in those states!) However, you should definitely start thinking of New Hampshire as a potential retirement destination! This state may be small, but it also has no sales tax. Plus, they won’t tax you on income, capital gains, or inheritance. Oh, and did we mention that it has one of the lowest crime rates in the entire country? Plus, you can’t beat those New England views, especially during autumn!
7. South Dakota
If you can handle some snow and bitterly cold temperatures, then you might want to add South Dakota to your “potential places to retire” list. Pros? Zero taxes on income, inheritance, estate, or capital gains. Cons? Very high property taxes. However, as Investopedia notes, this state offers a special exemption for homeowners aged 70 and older that can delay property taxes until you sell your home. Bonus point? South Dakota is home to Mount Rushmore!
8. Texas
Everything is bigger in Texas―except the cost of living. There’s also no state income tax, so you won’t be taxed on your Social Security, pension, or IRA accounts. Plus, Tyler, Texas, was voted the best place to retire in the whole country. USA Today noted that the cost of living is 7.9% lower than the national average. Not to be outdone, housing there is 29% cheaper than the national average!
9. Maine
According to Chapter.org, Maine is one of the best places to retire thanks to its excellent healthcare system. And while property taxes are high, you won’t be taxed on Social Security or inheritance taxes! Plus, you won’t be taxed on groceries or prescription drugs! Just keep in mind that the cost of living in Maine is 12% above the national average.
10. Wyoming
When you think of “perfect retirement states”, Wyoming might not be at the top of mind. However, don’t underestimate the Equality State! Not only is it extremely affordable, but it also has low taxes and a high quality of life. It’s a great place for both outdoor buffs and loners, as it’s the least-populated state in America! However, according to Bankrate, it’s one of the worst states for both healthcare and weather. Like a few of the previous entries on our lists, the winters aren’t exactly mild, but that isn’t the only weather-related issue you might have to deal with. It also averages 10 tornadoes per year and 85 earthquakes! Yikes!
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Originally published January 27, 2026
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