Alabama
Pensions: If you want to be able to count on your pension in retirement, then Alabama is a good retirement destination. If you’ve worked in the private sector, your pension is exempt from taxes in the Cotton State. In addition, military retirement pay and income will also not be taxed.
401(k)s and IRAs: Although Alabama offers certain advantages to retirees when it comes to taxes, not all retirement income is tax-exempt. The “Heart of Dixie” taxes 401(k)s and other defined-contribution retirement plans such as the traditional IRA as ordinary income.
Social Security Benefits: Alabama doesn’t levy any tax on Social Security benefits. That’s another advantage for retirees, apart from the warm climate and Southern hospitality.
Income Tax Range: When it comes to 401(k) funds, IRA distributions or any other ordinary income, the taxes range from 2% up to 5%, slightly below the national average. The lowest percentage is valid for up to $1,000 of taxable income for joint filers and up to $500 for all others and the highest is applied to more than $6,000 of taxable income for joint filers and over $3,000 of taxable income for the rest.
Alaska
Pensions: Sure, Alaska is cold but if you can get over this fact, retiree life in the largest states in the United States can be quite fun. That’s because retirees in Alaska don’t have to pay income tax on their pension or on any other income. It’s one of the few states that doesn’t levy an income tax.
401(k)s and IRAs: 401(k) and IRA distributions are also tax-exempt.
Social Security Benefits: Alaska could be a much nicer place to retire than you think because it doesn’t tax Social Security benefits.
Income Tax Range: Not applicable since there is no income tax.
14 thoughts on “14 States Where Your Pension Won’t Get Taxed”
good info
Thank you for sharing this information & doing all the research.
Great article
Hope you follow up with other Tax issues/problem living in those state
I.E sales taxes, Inheritance Tax (Wash bad)
I am activly looking to get out of Calif
Florida and Wy my two places so far
Don’t overlook Montana!
The picture used for the state of Washington is actually of D.C.
What about Connecticut we are taxed to death!!! We need to get out share! The government is so critical to all those who have people who are like me on social security!! Plus all the people in this state that have loss their jobs due to the pandemic. I am a shame with the government and nothing they do for us!!!
What about New York & New Jersey. I might have to move!!!
If they paid you, New York and New Jersey would still be a good places to move from. (Except Cape May)
NJ is unconstitutional and discriminatory the way they tax certain pensions and not others.
Washington State; correct, no income tax…yet! The Gov. has been pushing for one for years. Where did you get they don’t tax SS benefits?? They tax the crap out of me, both Social Security and 457 (like IRA’s) disbursements. And, every city/county has a sales tax as high as 10.3%.
What about Kentucky
KY TAXED TO DEATH HAVE CITY AND COUNTY INCOME TAXES. STATE INCOME SALES TAXES
How many of these states have a high sales tax instead of taxing income? I know Washington does. No income tax – but state, counties and cities all charge sales tax.
how about delaware