South Dakota carries the lowest income-adjusted tax burden among no-income-tax states at $5,041 per capita, with a cost of living index of just 89.
Texas, Florida, and Wyoming each fail retirees on property taxes, insurance costs, or healthcare access despite offering zero income tax.
States with income taxes that exempt retirement income can cost modest-income retirees less than no-income-tax states funding themselves through property or grocery sales taxes.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Every retiree eyeing a move has heard the same pitch: do everything you can to find somewhere that will allow you to skip income tax, thereby keeping more money and living better. For the most part, this is true, but what it omits is the mechanism. A state that does not tax income still funds schools, roads, and hospitals, so revenue lands elsewhere on your household. The substitute can easily cost a retiree more than the tax it replaced.