Retirement By State

Thinking of changing your residence at retirement? Moving to a new state is a popular option, but deciding just which state is best for your retirement plans can be tricky. Besides finding a location that you enjoy most, economic and tax concerns might play a role in your decision. The following table provides a quick overview of tax rates in each state. For an in-depth discussion of state-specific tax concerns and retirement pros & cons, click on that state's retirement guide.

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State Retirement Guides

State: Cost of Living: Sales Tax: Income Tax: Corporate Tax: Per Capita GDP: State Site:
Alabama Retirement #11 4.0% 2.0 - 5.0% 6.5% $32,390
Alaska Retirement #49 0.0% 0.0% 1.0% - 9.4% $63,846
Arizona Retirement #36 6.6% 2.59% - 4.54% 6.968% $35,000
Arkansas Retirement #4 6.0% 1.0% - 7.0% 1.0% - 6.5% $31,769
California Retirement #48 7.25% 1.0% - 9.3% 8.84% $46,992
Colorado Retirement #33 2.9% 4.63% 4.63% $46,199
Connecticut Retirement #47 6.0% 3.0% - 6.5% 7.5% $56,389
Delaware Retirement #35 0.0% 2.2% - 6.95% 8.7% $61,248
D.C. Retirement NA 6.0% 4.0% - 8.5% 9.975% $174,500
Florida Retirement #25 6.0% 0.0% 5.5% $35,653
Georgia Retirement #9 4.0% 1.0% - 6.0% 6.0% $36,252
Hawaii Retirement #50 4.0% 1.4% - 11.0% 4.4% - 6.4% $45,308
Idaho Retirement #12 6% 1.6% - 7.8% 7.6% $32,082
Illinois Retirement #20 6.25% 5.0% 9.5% $43,378
Indiana Retirement #15 7.0% 3.4% 8.5% $36,168
Iowa Retirement #14 6.0% 0.36% - 8.98% 6.0% - 12.0% $41,247
Kansas Retirement #7 5.3% 3.5% - 6.45% 4.0% $39,913
Kentucky Retirement #1 6.0% 2.0% - 6.0% 4.0% - 6.0% $32,149
Louisiana Retirement #21 4.0% 2.0% - 6.0% 4.0% - 8.0% $42,755
Maine Retirement #39 5.0% 2.0% - 8.5% 3.5% - 8.93% $34,535
Maryland Retirement #44 6.0% 2.0% - 5.5% 8.25% $44,917
Massachusetts Retirement #41 6.25% 5.3% 8.25% $50,023
Michigan Retirement #18 6.0% 4.35% 4.95% $32,839
Minnesota Retirement #33 6.88% 5.35% - 7.85% 9.8% $44,600
Mississippi Retirement #10 7.0% 3.0% - 5.0% 3.0% - 5.0% $29,225
Missouri Retirement #8 6.23% 1.5% - 6.0% 6.25% $35,594
Montana Retirement #30 0.0% 1.0% - 6.9% 6.75% $32,859
Nebraska Retirement #6 5.5% 2.56% - 6.84% 5.58% - 7.81% $42,605
Nevada Retirement #6 6.85% 0.0% 5.58% - 7.81% $42,605
New Hampshire Retirement #40 0.0% 0.0% 8.5% $40,566
New Jersey Retirement #46 7.0% 1.4% - 8.97% 9.0% $49,840
New Mexico Retirement #29 5.13% 1.7% - 4.9% 4.8% - 7.6% $34,360
New York Retirement #45 4.0% 4.0% - 8.97% 7.1% $49,976
North Carolina Retirement #22 5.75% 6.0% - 7.75% 6.9% $38,437
North Dakota Retirement #19 5.0% 1.84% - 4.86% 2.1% - 6.4% $44,970
Ohio Retirement #13 5.5% 0.59% - 5.93% NA $36,421
Oklahoma Retirement #3 4.5% 0.5% - 5.5% 6.0% $39,881
Oregon Retirement #38 0.0% 5.0% - 11.0% 6.6% - 7.6% $41,435
Pennsylvania Retirement #31 6.0% 3.07% 9.99% $39,033
Rhode Island Retirement #43 7.0% 3.75% - 5.99% 9.0% $40,752
South Carolina Retirement #28 6.0% 0.0% - 7.0% 5.0% $30,845
South Dakota Retirement #26 4.0% 0.0% 0.25% - 6.0% $44,261
Tennessee Retirement #2 7.0% 0.0% 6.5% $34,828
Texas Retirement #5 6.25% 0.0% NA $43,032
Utah Retirement #17 4.75% 5.0% 5.0% $36,759
Vermont Retirement #42 6.0% 3.55% - 8.95% 6.0% - 8.5% $36,789
Virginia Retirement #24 4.0% 2.0% - 5.75% 6.0% $46,609
Washington Retirement #37 6.5% 0.0% 0.0% $45,881
West Virginia Retirement #16 6.0% 3.0% - 6.5% 8.5% $30,124
Wisconsin Retirement #23 5.0% 4.6% - 7.75% 7.9% $38,140
Wyoming Retirement #27 4.0% 0.0% 0.0% $65,199

*Figures as of 07/19/2011. Subject to change without notice.
**Figures may be averages or approximations ignoring ranges and exceptions.

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Definitions and Details

Cost of Living Rank: this number signifies how cost-effective it is to live in this state. Lower numbers are better (more economical) while higher numbers are worse (less economical). Cost of living rank does not take into account quality of life issues; it's only a measure economic value.

State Sales Tax: this number is the minimum sales tax changed by the state. It's important to remember that local counties, districts, and cities might charge additional sales taxes. It's safe to assume that actual sales taxes will be higher than this rate. Also consider that not all states charge sales tax on the same types of goods. Food, health care, prescription drugs, and miscellaneous services are often excluded.

State Income Tax: this number is usually a range because most state have a progressive income tax: the higher your income, the more you pay. Most retirees should plan with numbers from the high end of the range because those rates are easily reached if you earn over $50,000 per year.

State Corporate Tax: this number is included because many retirees are also small business owners and state corporate taxes can be decisive when considering between two otherwise desirable retirement locations. Corporate tax rates, like income tax rates, are often progressive: the more your business earns, the higher the rate. Keep in mind that financial service businesses are usually taxed at different rates than ordinary business.

Per Capita GDP: this number is the annual gross domestic product of the state divided by the total number of state residents. The per capita GDP gives a sense of how much the average, hypothetical resident earns. This number can serve as a standard against which to compare your annual salary or retirement income.

State Site: this is an outbound link to official state website where you can get more information about state policies, regulations, tax rates, and helpful resources like forms, guides, and important announcements.