Alaska does not tax pension income, making it an attractive option for retirees. The state has no individual income tax or statewide sales tax. However, Alaska does have a property tax rate of 1.07%.
Florida is another state that does not tax pension income. Like Alaska, Florida has no individual income tax. The state has a 6% statewide sales tax rate and a 0.71% property tax rate.
When combined, Florida’s state sales and property tax rate is 6.71%. Nevada also does not tax pension income. The state has no individual income tax.
Nevada’s statewide sales tax rate is 6.85%, and its property tax rate is 0.53%. The combined state sales and property tax rate in Nevada is 7.38%.
States without pension income taxes
South Dakota is another state that does not tax pension income. Like the other states mentioned, South Dakota has no individual income tax. The state’s statewide sales tax rate is 4.5%, and its property tax rate is 1.14%.
South Dakota’s combined state sales and property tax rate is 5.64%. Texas rounds out the list of five states that do not tax pension income. Texas has no individual income tax.
The state’s statewide sales tax rate is 6.25%, and its property tax rate is 1.6%. When combined, Texas’ state sales and property tax rate is 7.85%. These five states offer significant tax advantages for retirees looking to maximize their pension income.
By avoiding state income tax on pensions, retirees in these states can keep more of their hard-earned money. However, it’s important to consider other factors such as cost of living, healthcare access, and climate when deciding where to retire. Consulting with a financial advisor can help retirees make informed decisions about their retirement plans.
