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Where you live when you retire, doesn’t have to be where you live when you are retired. If you’re thinking about moving, one important consideration is taxes. Here’s a short guide to help you decide, with updates for 2025 that impact how Social Security benefits were taxed in three states plus how military pensions were affected. State income taxes can range as high as 13.3% – unless you live in a state that doesn’t tax retirement income. 😊 Nine states impose no income tax at all. If you are a retiree, you can move to any one of those states and not pay any state income taxes on your retirement income. But the list doesn’t end there. There are many other states that selectively exempt income from some retirement sources, like Social Security, pensions, military pensions, and distributions from defined contribution retirement plans. Read More: If you want some help planning for retirement, here are the best retirement planning tools in 2025. An important part of knowing if you are on track for retirement is understanding your expenses will be in retirement. Check out the average spending for retirees. Financial planning is more than just saving for retirement. See how your net worth stacks up by age. Table of Contents9 States That Don’t Collect Income Tax13 States That Don’t Tax Defined Contribution Plan DistributionsWhat about Roth IRA distributions? 15 States That Don’t Tax Pension Income35 States That Don’t Tax Military Pensions41 States That Don’t Tax Social Security Income (Plus The District of Columbia)Is it Better to Live in a State that Doesn’t Tax Retirement Benefits? 9 States That Don’t Collect Income Tax Nine states currently have no income tax. Since they don’t tax income, that also means they don’t tax retirement income. The nine states with no income tax include: Alaska Florida New Hampshire* Nevada South Dakota Tennessee Texas Washington Wyoming * New Hampshire had a 3% income tax levied on interest and dividend income received in 2024. However, this tax has been repealed starting January 1st, 2025. 13 States That Don’t Tax Defined Contribution Plan Distributions As is the case with federal income tax, most states tax distributions from defined contribution plans. These include traditional, SEP, and SIMPLE IRAs; 401(k), 403(b), 457, and Thrift Savings Plans (TSPs). However, 13 states don’t impose tax on defined contribution plan distributions. (Source: Bankrate) You start with the nine that don’t tax income tax: Alaska Florida New Hampshire Nevada South Dakota Tennessee Texas Washington Wyoming Then add these four states that don’t tax defined contribution plan distributions: Illinois Iowa Mississippi Pennsylvania What about Roth IRA distributions? Generally speaking, states follow the same tax treatment with Roth IRA distributions as the IRS. But since each state has its own tax code, you’ll need to check with your tax preparer or tax software program to determine if (and when) Roth IRA distributions can be taken tax-free. * Note that in researching for this article, we could not
The purpose of this post is simply to illustrate that the world of retirement planning and living is vastly different than that of many, if not most, in the HumbleDollar community of writers and readers. No judgement intended. While we debate, saving, budgets, annuities, investment and withdrawal strategies, the real world, doesn’t or can’t save or invest adequately let alone accumulate wealth. According to the Federal Reserve, the median retirement savings for individuals age 55-64 […]
In 2020, during the heart of the COVID pandemic, I remember listening to a FIRE-focused podcast hosted by two people who claimed to be financially independent and retired early. Even though it’s been over 16 years since I first started writing about FIRE, the topic still fascinates me. The journey toward financial independence is full […] The post Being Truly FIRE Is Terrible For Entrepreneurship, But That’s OK appeared first on Financial Samurai.
Earlier this year, I wrote about stepping away from full-time work at the end of 2026 or early 2027. The idea is to either retire early and focus on my hobbies and passions, or transition … Read more
🎙️Episode #449 – Can real estate really carry you through retirement? We’ll show you how to build income that last because cash flow isn’t always… The post The Case Against Real Estate for Retirement appeared first on Coach Carson.
A retirement bucket strategy is an approach by which the retirement corpus is split into 3-4 buckets of varying risk. As retirement progresses and market conditions change, the retiree is expected to manage the buckets. That is, transfer money from one bucket to another to ensure the expenses (indexed to inflation, with some room for… The post Implementing a retirement bucket strategy with minimal churn appeared first on freefincal.
Managing finances on a retirement budget requires careful planning and smart spending. With a fixed income, retirees need to make every dollar count and avoid unnecessary expenses that can strain their finances. Understanding which purchases to avoid can help retirees maintain their financial health and enjoy a more secure and stress-free retirement. 1. Timeshares Timeshares might seem like a great way to guarantee a vacation spot every year, but they can be a financial drain […]
Save, invest, prosper with My Own Advisor. Weekend Reading – The 2% Retirement Rule Well hello! Welcome to some new Weekend Reading related to an article I read on not 4% rules, not 3% rules but the 2% retirement rule. In case you missed my recent post… I recently updated this post about how I built our dividend income portfolio: How I… Join the million dollar portfolio journey. The article Weekend Reading – The 2% […]
The other evening, I went to a school reception held for parents and alumni who donated at least a certain amount in the calendar school year. It was a warm, intimate gathering where I mingled with other parents, shared stories, and listened to the head of school and a couple of trustees talk about the […] The post The Difficulty Of Donating Money When You’re Unemployed Or FIRE appeared first on Financial Samurai.
Social Security Commissioner Frank Bisignano ignited controversy Friday after suggesting that raising the retirement age could be considered as part of future entitlement reforms. In an interview with Fox Business host Maria Bartiromo, Bisignano said “everything’s being considered and will be considered” when asked if benefits could be delayed past age 67. Read the rest
If you’ve been following along here for any length of time, you know I’m obsessed with goals. Big ones. Audacious ones. Goals that most people would say are “unrealistic” or “too ambitious.” But here’s the funny thing: I’ve found that when I set targets that make me uncomfortable – goals that stretch my imagination and force me to grow—I not only rise to meet them, I often end up arriving much sooner than expected. Since […]
Comparison is the thief of joy. Tailor your retirement plan to your unique personality. Start your journey by reading this week’s terrific links. Take your retirement offline. Of Dollars And Data It’s perfectly normal to experience a Bear Market during retirement. Chart Kid Matt Starting early and saving more beats higher returns. Morningstar Social Security is a massive part of many Americans’ wealth. …The post My Ambition Is To Have Ambition…..When Is My Retirement? appeared first on A Teachable Moment.
We all know the importance of planning when it comes to achieving retirement success. But what, exactly, should you plan for? Today, we’re boiling it down to the three questions you must answer before you retire. Answer all three correctly, and you’ll be well on your way to retirement success. Sounds easy, right?? Hold that thought. Done right, it will take you some time to work through what initially seems to be an easy homework […]