The Most- and Least-Taxed States for Retirement

When it comes to choosing where to live during retirement, weather isn't the only consideration. State and local tax laws have a significant impact on your nest egg.

The charts below show the highest and lowest state tax rates and costs of living, from data provided by nonprofit think tanks the Tax Foundation and the Council for Community and Economic Research.

​State Income Tax Rates

Highest

1. California (13.3%)

2. Oregon (9.9%)

3. Minnesota (9.85%)

4. Iowa (8.98%)

5. New Jersey (8.97%)

6. Vermont (8.95%)

7. Washington DC (8.95%)

Lowest

50. Alaska (0%)

49. Florida (0%)

48. Nevada (0%)

47. South Dakota (0%)

46. Texas (0%)

45. Washington (0%)

44. Wyoming (0%)

State and Local Sales Taxes

(state and average local tax rates combined)

Highest

1. Louisiana (10%)

2. Tennessee (9.5%)

3. Arkansas (9.3%)

4. Alabama (9%)

5. Washington (8.9%)

Lowest

50. Delaware (0%)

49. Montana (0%)

48. New Hampshire (0%)

47. Oregon (0%)

46. Alaska (1.8%)

Property Taxes

(Rankings based on the statewide average of local rates.)

Highest

1. New Jersey

2. Illinois

3. New Hampshire

4. Connecticut

5. Wisconsin

Lowest

50. Hawaii

49. Alabama

48. Louisiana

47. Delaware

46. Washington DC

If taxes were the only consideration in our retirement destinations, everyone would move to Alaska, which has no state income or sales taxes. However, the "last frontier" state also has one of the highest costs of living in the U.S. Therefore, you may also wish to consider which states have high and low costs of living.

Don't Forget: Cost of Living

Highest

1. Hawaii

2. District of Columbia

3. California

4. Alaska

5. New York

Lowest

50. Mississippi

49. Arkansas

48. Oklahoma

47. Michigan

46. Tennessee