U.S. markets open in 4 hours 23 minutes
  • S&P Futures

    4,137.50
    +19.50 (+0.47%)
     
  • Dow Futures

    33,749.00
    +125.00 (+0.37%)
     
  • Nasdaq Futures

    13,882.50
    +83.75 (+0.61%)
     
  • Russell 2000 Futures

    2,267.90
    +22.90 (+1.02%)
     
  • Crude Oil

    62.93
    -0.22 (-0.35%)
     
  • Gold

    1,747.30
    +11.00 (+0.63%)
     
  • Silver

    25.65
    +0.12 (+0.47%)
     
  • EUR/USD

    1.1986
    +0.0003 (+0.02%)
     
  • 10-Yr Bond

    1.6380
    0.0000 (0.00%)
     
  • Vix

    16.86
    +0.21 (+1.26%)
     
  • GBP/USD

    1.3785
    +0.0004 (+0.03%)
     
  • USD/JPY

    108.7650
    -0.1620 (-0.15%)
     
  • BTC-USD

    62,860.75
    -1,632.71 (-2.53%)
     
  • CMC Crypto 200

    1,372.87
    -2.90 (-0.21%)
     
  • FTSE 100

    6,973.15
    +33.57 (+0.48%)
     
  • Nikkei 225

    29,642.69
    +21.70 (+0.07%)
     

The Most and Least Tax-Friendly Cities for Retirees

Erica Corbin
·12 min read

When considering the perfect spot to spend your golden years, you’ll likely take many factors into account: cost of living, weather, proximity to loved ones and maybe even your ability to pursue hobbies that are important to you. Nothing says comfortable retirement quite like living next door to your favorite golf course or fishing hole, after all. But one piece of the retirement-planning puzzle that can easily be overlooked is taxes. Though it might seem less important than the aforementioned factors, a high tax rate will deplete your nest egg faster than you can say, “But my favorite golf course is in Minneapolis!” So, it’s important to know what your ideal retirement city’s tax situation looks like.

In order to determine the most and least tax-friendly cities for retirees, GOBankingRates examined the 50 biggest U.S. cities in terms of population size and scored them across five factors: estimated total taxes paid annually in retirement, the effective retirement tax rate in the state, the amount paid in property taxes annually, the estimated property tax rate and sales tax. Though many of the most tax-friendly cities owe their spot on the list to a 0% tax rate, a lack of retirement taxes didn’t necessarily make a city “tax-friendly.” For example, Austin, Texas, despite its 0% tax rate, wound up as one of the least tax-friendly cities due to a high sales tax and annual property taxes more than three times the U.S. average.

Whether your retirement is years down the road or just around the corner, it’s important to know how taxes will affect your outlook. Starting with the most tax-friendly cities for retirees, learn the best and worst places to retire when it comes to taxes.

Last updated: July 21, 2020

1. Louisville, Kentucky

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $165,500

  • Annual property tax estimate by county: $1,489.50

  • Property tax rate: 0.90%

  • Sales tax: 6.00%

2. Jacksonville, Florida

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $180,600

  • Annual property tax estimate by county: $1,535.10

  • Property tax rate: 0.85%

  • Sales tax: 7.00%

3. Las Vegas

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $274,400

  • Annual property tax estimate by county: $1,975.68

  • Property tax rate: 0.72%

  • Sales tax: 8.25%

4. Atlanta

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $264,500

  • Annual property tax estimate by county: $2,089.55

  • Property tax rate: 0.79%

  • Sales tax: 8.90%

Learn Why: A Tiny Tax Refund Could Be the Best Thing To Happen To Your Finances

5. Nashville, Tennessee

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $267,000

  • Annual property tax estimate by county: $2,563.20

  • Property tax rate: 0.96%

  • Sales tax: 9.25%

6. Memphis, Tennessee

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $89,100

  • Annual property tax estimate by county: $1,229.58

  • Property tax rate: 1.38%

  • Sales tax: 9.25%

7. Tampa, Florida

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $224,900

  • Annual property tax estimate by county: $2,451.41

  • Property tax rate: 1.09%

  • Sales tax: 8.50%

8. Miami

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $337,900

  • Annual property tax estimate by county: $3,446.58

  • Property tax rate: 1.02%

  • Sales tax: 7.00%

Related: Understand How You Can Prepare for Rising Gas Prices and Taxes

9. New Orleans

  • Annual retirement taxes: $515

  • Effective retirement tax rate: 0.99%

  • Home value: $179,700

  • Annual property tax estimate by county: $1,096.17

  • Property tax rate: 0.61%

  • Sales tax: 9.45%

10. Fresno, California

  • Annual retirement taxes: $715

  • Effective retirement tax rate: 1.37%

  • Home value: $246,000

  • Annual property tax estimate by county: $1,599

  • Property tax rate: 0.65%

  • Sales tax: 7.98%

11. Mesa, Arizona

  • Annual retirement taxes: $763

  • Effective retirement tax rate: 1.47%

  • Home value: $257,100

  • Annual property tax estimate by county: $1,516.89

  • Property tax rate: 0.59%

  • Sales tax: 8.30%

12. Phoenix

  • Annual retirement taxes: $763

  • Effective retirement tax rate: 1.47%

  • Home value: $248,100

  • Annual property tax estimate by county: $1,463.79

  • Property tax rate: 0.59%

  • Sales tax: 8.60%

13. Philadelphia

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $162,600

  • Annual property tax estimate by county: $2,715.42

  • Property tax rate: 1.67%

  • Sales tax: 8.00%

14. Chicago

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $229,600

  • Annual property tax estimate by county: $3,168.48

  • Property tax rate: 1.38%

  • Sales tax: 10.25%

15. New York

  • Annual retirement taxes: $268

  • Effective retirement tax rate: 0.52%

  • Home value: $668,500

  • Annual property tax estimate by county: $4,746.35

  • Property tax rate: 0.71%

  • Sales tax: 8.00%

16. Sacramento, California

  • Annual retirement taxes: $715

  • Effective retirement tax rate: 1.37%

  • Home value: $332,600

  • Annual property tax estimate by county: $2,261.68

  • Property tax rate: 0.68%

  • Sales tax: 8.75%

17. Tucson, Arizona

  • Annual retirement taxes: $763

  • Effective retirement tax rate: 1.47%

  • Home value: $196,300

  • Annual property tax estimate by county: $1,590.03

  • Property tax rate: 0.81%

  • Sales tax: 8.70%

2020 IRS Tax Brackets: How Much You’ll Pay in 2020 on What You Earned in 2019

18. Virginia Beach, Virginia

  • Annual retirement taxes: $822

  • Effective retirement tax rate: 1.58%

  • Home value: $271,900

  • Annual property tax estimate by county: $2,202.39

  • Property tax rate: 0.81%

  • Sales tax: 6.00%

19. Columbus, Ohio

  • Annual retirement taxes: $370

  • Effective retirement tax rate: 0.71%

  • Home value: $159,700

  • Annual property tax estimate by county: $2,363.56

  • Property tax rate: 1.48%

  • Sales tax: 7.50%

20. El Paso, Texas

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $130,000

  • Annual property tax estimate by county: $2,717.00

  • Property tax rate: 2.09%

  • Sales tax: 7.25%

21. Seattle

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $718,500

  • Annual property tax estimate by county: $6,322.80

  • Property tax rate: 0.88%

  • Sales tax: 10.10%

22. Tulsa, Oklahoma

  • Annual retirement taxes: $1,176

  • Effective retirement tax rate: 2.26%

  • Home value: $123,000

  • Annual property tax estimate by county: $799.50

  • Property tax rate: 0.65%

  • Sales tax: 8.52%

23. San Diego

  • Annual retirement taxes: $715

  • Effective retirement tax rate: 1.37%

  • Home value: $640,900

  • Annual property tax estimate by county: $3,909.49

  • Property tax rate: 0.61%

  • Sales tax: 7.75%

24. Baltimore

  • Annual retirement taxes: $1,353

  • Effective retirement tax rate: 2.60%

  • Home value: $120,900

  • Annual property tax estimate by county: $797.94

  • Property tax rate: 0.66%

  • Sales tax: 6.00%

25. Long Beach, California

  • Annual retirement taxes: $715

  • Effective retirement tax rate: 1.37%

  • Home value: $606,200

  • Annual property tax estimate by county: $3,576.58

  • Property tax rate: 0.59%

  • Sales tax: 10.25%

26. Washington

  • Annual retirement taxes: $1,236

  • Effective retirement tax rate: 2.38%

  • Home value: $575,600

  • Annual property tax estimate by county: $2,647.76

  • Property tax rate: 0.46%

  • Sales tax: 6.00%

27. Los Angeles

  • Annual retirement taxes: $715

  • Effective retirement tax rate: 1.37%

  • Home value: $698,800

  • Annual property tax estimate by county: $4,122.92

  • Property tax rate: 0.59%

  • Sales tax: 9.50%

28. San Antonio

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $178,500

  • Annual property tax estimate by county: $3,784.20

  • Property tax rate: 2.12%

  • Sales tax: 8.25%

Discover: The 50 Cheapest Countries To Retire To

29. Kansas City, Missouri

  • Annual retirement taxes: $869

  • Effective retirement tax rate: 1.67%

  • Home value: $149,500

  • Annual property tax estimate by county: $1,808.95

  • Property tax rate: 1.21%

  • Sales tax: 8.61%

30. Indianapolis

  • Annual retirement taxes: $1,093

  • Effective retirement tax rate: 2.10%

  • Home value: $147,600

  • Annual property tax estimate by county: $1,594.08

  • Property tax rate: 1.08%

  • Sales tax: 7.00%

31. Oklahoma City

  • Annual retirement taxes: $1,176

  • Effective retirement tax rate: 2.26%

  • Home value: $135,100

  • Annual property tax estimate by county: $1,310.47

  • Property tax rate: 0.97%

  • Sales tax: 8.63%

32. Colorado Springs, Colorado

  • Annual retirement taxes: $1,483

  • Effective retirement tax rate: 2.85%

  • Home value: $302,900

  • Annual property tax estimate by county: $1,423.63

  • Property tax rate: 0.47%

  • Sales tax: 8.25%

33. Oakland, California

  • Annual retirement taxes: $715

  • Effective retirement tax rate: 1.37%

  • Home value: $737,700

  • Annual property tax estimate by county: $5,016.36

  • Property tax rate: 0.68%

  • Sales tax: 9.25%

34. Dallas

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $212,700

  • Annual property tax estimate by county: $4,658.13

  • Property tax rate: 2.19%

  • Sales tax: 8.25%

35. Fort Worth, Texas

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $200,100

  • Annual property tax estimate by county: $4,742.37

  • Property tax rate: 2.37%

  • Sales tax: 8.25%

Read More: You Don’t Have To Be a Millionaire To Retire In These Places

36. Wichita, Kansas

  • Annual retirement taxes: $1,220

  • Effective retirement tax rate: 2.34%

  • Home value: $129,300

  • Annual property tax estimate by county: $1,616.25

  • Property tax rate: 1.25%

  • Sales tax: 7.50%

37. Denver

  • Annual retirement taxes: $1,483

  • Effective retirement tax rate: 2.85%

  • Home value: $426,200

  • Annual property tax estimate by county: $2,301.48

  • Property tax rate: 0.54%

  • Sales tax: 8.31%

38. Arlington, Texas

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $213,000

  • Annual property tax estimate by county: $5,048.10

  • Property tax rate: 2.37%

  • Sales tax: 8.00%

39. Houston

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $190,400

  • Annual property tax estimate by county: $4,721.92

  • Property tax rate: 2.48%

  • Sales tax: 8.25%

40. Raleigh, North Carolina

  • Annual retirement taxes: $1,426

  • Effective retirement tax rate: 2.74%

  • Home value: $281,800

  • Annual property tax estimate by county: $2,282.58

  • Property tax rate: 0.81%

  • Sales tax: 7.25%

41. San Jose, California

  • Annual retirement taxes: $715

  • Effective retirement tax rate: 1.37%

  • Home value: $989,000

  • Annual property tax estimate by county: $6,626.30

  • Property tax rate: 0.67%

  • Sales tax: 9.25%

42. San Francisco

  • Annual retirement taxes: $715

  • Effective retirement tax rate: 1.37%

  • Home value: $1,352,300

  • Annual property tax estimate by county: $7,437.65

  • Property tax rate: 0.55%

  • Sales tax: 8.50%

43. Albuquerque, New Mexico

  • Annual retirement taxes: $1,623

  • Effective retirement tax rate: 3.12%

  • Home value: $205,000

  • Annual property tax estimate by county: $1,660.50

  • Property tax rate: 0.81%

  • Sales tax: 7.88%

44. Charlotte, North Carolina

  • Annual retirement taxes: $1,426

  • Effective retirement tax rate: 2.74%

  • Home value: $232,500

  • Annual property tax estimate by county: $2,441.25

  • Property tax rate: 1.05%

  • Sales tax: 7.25%

See: Here’s Exactly How Much You Need Saved for Retirement in Your State

45. Austin, Texas

  • Annual retirement taxes: $0

  • Effective retirement tax rate: 0%

  • Home value: $384,600

  • Annual property tax estimate by county: $7,576.62

  • Property tax rate: 1.97%

  • Sales tax: 8.25%

46. Boston

  • Annual retirement taxes: $1,549

  • Effective retirement tax rate: 2.98%

  • Home value: $596,700

  • Annual property tax estimate by county: $4,654.26

  • Property tax rate: 0.78%

  • Sales tax: 6.25%

47. Milwaukee

  • Annual retirement taxes: $1,326

  • Effective retirement tax rate: 2.55%

  • Home value: $124,100

  • Annual property tax estimate by county: $2,779.84

  • Property tax rate: 2.24%

  • Sales tax: 5.60%

48. Portland, Oregon

  • Annual retirement taxes: $2,306

  • Effective retirement tax rate: 4.43%

  • Home value: $420,400

  • Annual property tax estimate by county: $3,573.40

  • Property tax rate: 0.85%

  • Sales tax: 0%

49. Minneapolis

  • Annual retirement taxes: $2,127

  • Effective retirement tax rate: 4.09%

  • Home value: $268,100

  • Annual property tax estimate by county: $2,707.81

  • Property tax rate: 1.01%

  • Sales tax: 8.03%

50. Omaha, Nebraska

  • Annual retirement taxes: $1,871

  • Effective retirement tax rate: 3.60%

  • Home value: $179,000

  • Annual property tax estimate by county: $3,526.30

  • Property tax rate: 1.97%

  • Sales tax: 7.00%

More From GOBankingRates

To determine the most and least tax-friendly cities for retirees, GOBankingRates looked at the 50 biggest cities in the U.S. by population according to the U.S. Census Bureau’s 2018 Population Estimates and scored them on the following factors: (1) estimated total amount paid in retirement taxes annually (this figure was calculated by state through SmartAsset‘s Retirement Tax Friendliness calculator, assuming a single filer turning 65 in 2020, receiving the national average annual amount in retirement benefits, sourced from the Social Security Administration’s November 2019 Monthly Statistical Snapshot, and collecting the majority of their income from a retirement account — assuming retirement benefits account for 33% of total income, as estimated by the SSA Fact Sheet); (2) the effective retirement tax rate in each state, calculated as the percentage of total income paid in retirement taxes; (3) the average amount paid in property taxes annually, calculated by using Tax-Rates.org‘s Property Tax Calculator to apply the appropriate county, parish or district’s tax rates to the estimated median home value for each city, as sourced from Zillow’s October 2019 Housing Data; (4) the estimated property tax rate in its county, parish or district from Tax-Rates.org; and (5) the sales tax rate in each city, according to Avalara. All 50 cities were then ranked according to their scores on the above five factors, with sales tax weighted at 1/2 times the other factors. Note: Detroit was excluded due to a lack of data. All data used to conduct this study was compiled and verified on Dec. 16, 2019, and is subject to change.

This article originally appeared on GOBankingRates.com: The Most and Least Tax-Friendly Cities for Retirees