Pensions: The Magnolia State can be considered a haven for retirees. For starters, the state does not levy any tax on private or government pension income as long as you’re planning on using it when you reach your retirement age and not before age 59½.
401(k)s and IRAs: Ditto for 401(k) plan and IRA distributions. Except for early distributions, Mississippi doesn’t tax 401(k) plan and IRA distributions.
Social Security Benefits: Social Security benefits are also not taxed in Mississippi, so you get to keep more of them.
Income Tax Range: For the income that’s taxed in Mississippi, the lowest tax rate is 3% (on taxable income of $2,000 or more), and the highest is 5% (on taxable income exceeding $10,000). In the following years, the 3% rate will be progressively being phased out.
Pensions: Should you retire to Pennsylvania? Definitely, yes. The Keystone State doesn’t levy any tax on the pension income received from an eligible employer-sponsored retirement plan. Of course, things change if you retire early.
401(k)s and IRAs: 401(k) plan or IRA benefits are not taxed in Pennsylvania (excluding the early retirement scenario).
Social Security Benefits: Your Social Security benefits are excluded from taxation as well.
Income Tax Range: Pennsylvania imposes a flat income tax rate of 3.07%.
Your pension will have hit the jackpot if you’re lucky to live in the next state…..