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Choosing the best state for retirement requires balancing cost of living, tax policies, healthcare access, and quality of life. This ranking evaluates states based on factors most important to retirees, including overall affordability, state income tax treatment of retirement income, property taxes, and healthcare costs. Use this guide alongside our retirement calculator to plan your ideal retirement location.
| Rank | State | Tax Friendly |
|---|---|---|
| 1 | Washington | No income tax |
| 2 | Florida | No income tax |
| 3 | Illinois | 4.95% flat |
| 4 | New York | 4.0%–10.9% (progressive) |
| 5 | Texas | No income tax |
| 6 | Ohio | 0%–3.99% (progressive) |
| 7 | Michigan | 4.25% flat |
| 8 | California | 1.0%–13.3% (progressive) |
| 9 | Georgia | 1.0%–5.75% (progressive) |
| 10 | North Carolina | 4.75% flat |
States are ranked using a composite score that weighs cost of living index (40%), state income tax friendliness (25%), property tax burden (15%), and healthcare cost index (20%). States with no income tax receive a significant score boost. Data sources include BEA Regional Price Parities, state revenue departments, and the Council for Community and Economic Research.
Which state is best for retirement?
The best state depends on your priorities. Florida offers no income tax with moderate costs. Texas has no income tax and low costs. Ohio offers the lowest cost of living. Consider healthcare access, climate, and proximity to family alongside financial factors.
How does state income tax affect retirement?
States with no income tax allow retirees to keep more of their Social Security benefits, pension income, and retirement account withdrawals. States like Florida and Texas are popular for this reason. Our salary calculator can help estimate tax impacts.
What role does healthcare cost play in retirement planning?
Healthcare is often the second-largest retirement expense after housing. States with lower healthcare cost indices help retirement savings go further. Use our retirement calculator to model healthcare costs in your preferred state.
Australia calculators use data from the following official government agencies:
Our Australian calculators follow tax rates, thresholds, and superannuation rules published by the Australian Taxation Office (ATO). Wage and economic data is sourced from the Australian Bureau of Statistics (ABS). Mortgage rates reflect RBA cash rate influences and market averages. All figures are for educational purposes.
All tax brackets, contribution rates, and economic data used in our calculators are sourced from the official government publications listed above. Rates are updated at least annually to reflect the latest tax year and regulatory changes. Users should verify critical figures with official sources or qualified professionals.
Last updated: June 2026. Information may change; always verify with official sources.
Last Updated: July 2026 — Reviewed Against Official Sources