Tennessee
Similarly to New Hampshire, if you retired to the Volunteer State you’d only be required to pay taxes on interest and dividends. Luckily for seniors, though, those taxes have been rolled out entirely as of 2020.
So, once more, your pension is safe, your 401(k) and IRA distributions are safe, and Uncle Sam won’t pester you about your Social Security benefits either.
You do have to pay attention to income tax ranges, though. Back in 2019, there was a 2% tax on interest and dividends but that has since gone down to 1% in 2020. In 2021, the plan is to reduce it to 0%.
If you and your loved ones are filing jointly and your spouse turns 100 then all of your income will be exempt from taxes! How about that?
Texas
Since there is no personal income tax in Texas, you won’t have to pay anything on your pension income, 401(k), or IRA withdrawals. You might want to spend your extra money on a fancy cowboy hat or a pair of boots to really show appreciation for this tax-friendly state!
That also means that your social security benefits are safe, too!
Seniors in the Lone Star State only have to worry about enjoying their golden years. Come tax season, everything is a breeze! If you can put up with the extreme summer heat, we recommend you downsize and relocate to Texas after you exit the workforce!
