Taxes will likely be a big part of your retirement budget, unless you live in a state that offers tax breaks to retirees. These states don't tax Social Security or many other types of retirement income, according to an analysis of state taxation of retirement benefits by Wolters Kluwer.
If you can get past the cold weather, Alaska is a tax haven for retirees. Alaska has no income tax or sales tax, and the state doesn't tax pension or Social Security income.
Florida offers generally pleasant weather and access to the beach, in addition to tax breaks for retirees. Seniors in Florida don't need to pay taxes on their Social Security or pension payments, and there's no state income tax. But the state sales tax rate is 6 percent.
Income from federally qualified retirement plans, individual retirement accounts, certain capital gains on employer securities and Social Security are excluded from taxation in Illinois. However, the state sales tax is 6.25 percent, and property taxes can be higher than in other states.
Although Mississippi does have an income tax, income from Social Security, retirement accounts, pensions and annuities is exempt from taxation. But watch out for Mississippi's 7 percent sales tax.
Nevada has no individual income tax, which includes the Social Security and pension income retirees get. But the sales tax is 6.85 percent.
Social Security and pension benefits aren't taxed in Pennsylvania, but most sales are taxed at 6 percent. The cost of living and housing costs are also typically significantly less than in neighboring states like New York and New Jersey.
South Dakota's state sales tax is a relatively low 4 percent. There's also no income tax for individuals, and Social Security and pension benefits aren't taxed.
There's no income tax in Texas, including retirement income such as Social Security and pensions. However, property tax rates can be high, and the sales tax rate is 6.25 percent.
Plentiful outdoor activities as well as access to both the ocean and mountains are big draws of Washington. Another perk: Social Security, pension and other forms of income aren't taxed. The sales tax is 6.5 percent.
Wyoming doesn't tax any form of income, including retirement benefits and Social Security. And the state sales tax is a relatively low 4 percent.
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