Want to Avoid Paying Income Taxes? Here Are 12 States That Won’t Tax Your Retirement Income

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If you plan on retiring early, it’s best to avoid Pennsylvania. But if you want to work for a little bit longer and want to postpone your retirement, the Keystone State might be great for you since they do not tax 401(k)s, IRAs, and pensions from an eligible employer-sponsored retirement plan. Also, don’t worry, your Social Security won’t be taxed either.

In terms of income tax ranges, the state does have a low, flat income tax rate of 3.07%. You also have to do your due diligence and research exactly where you’re planning on moving since some school districts and municipalities may tax your income too.

Depending on a recipient’s relationship with the deceased and their age, the state also has an inheritance tax that ranges from 4.5% to 15%.

South Dakota

For a peaceful retirement, you might want to look for South Dakota. This state is so spacious you basically won’t have to worry about pesky people rubbing their noses in where they don’t belong!

What about taxes? Luckily, since there is no income tax in the Mount Rushmore State, you won’t have to pay anything on your pension, 401(k), and IRA withdrawals. What’s more, your Social Security benefits won’t be taxed either.

Neither you nor your loved ones have to worry about inheritance or estate taxes if you move here during retirement!

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