14 States Where Your Pension Won’t Get Taxed

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Mississippi

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.

 

Pennsylvania

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%.

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14 thoughts on “14 States Where Your Pension Won’t Get Taxed”

  1. 16
    9

    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

  2. 5
    2

    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!!!

  3. 2
    4

    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%.

  4. 3
    3

    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.

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