Key Takeaways<\/p>\n
Retiring in a state that doesn\u2019t tax 401(k), IRA, or Social Security withdrawals lets you keep more of your income and stretch your savings further. When you\u2019re on a fixed retirement income<\/a>, every dollar counts. That\u2019s why it pays to live in a state that won\u2019t tax your 401(k), IRA, or Social Security withdrawals\u2014you get to keep more of your money.\n<\/p>\n Earlier this year, Investopedia compiled a list of\u00a050 of the best cities to retire in<\/a>\u00a0across the U.S.,\u00a0using data<\/a> like the average cost of living and access to travel, health care, and entertainment.\n<\/p>\n Of the 50 top cities to retire in, 18 are located in states that don\u2019t tax your 401(k)<\/a> or IRA<\/a> withdrawals (or your Social Security benefits<\/a>, for that matter). Here they are grouped by region.\n<\/p>\n Midwest Gregory is a small town with just over 1,200 residents. While the median<\/a> household only earns $52,432 per year, these earnings stretch further due to low living costs. For example, average housing costs at the county level are just $589 per month. And the wider area offers “world-class hunting opportunities,” according to the town’s website.<\/p>\n Corning, Iowa <\/p>\n Corning is a slightly larger town with a population of nearly 1,500. On top of having no state tax on 401(k) and Social Security withdrawals, it offers a relatively low median county home value of $116,900. That\u2019s nearly a fourth of the nationwide median home value of $410,800. It’s also the birthplace of Johnny Carson, who hosted “The Late Show” for nearly three decades.\n<\/p>\n Mason City, Iowa <\/p>\n Mason City is a medium-sized town with nearly 26,800 residents. It combines Midwestern affordability with modern amenities, like arts and entertainment. Embedded throughout the town is a significant collection of Prairie School-style architecture, including\u00a0Frank Lloyd Wright’s last remaining hotel.\u00a0Its Music Man Square honors its connection to the musical The Music Man, whose writer and composer, Robert Meredith Wilson, was born in Mason City.\u00a0<\/p>\n Northeast Located on the Pennsylvania-Ohio border, Hermitage not only doesn\u2019t have a state tax on retirement income, but the total average monthly tax costs for two adults and no children is relatively low at $560. This lets you keep more of your income. Hermitage is the site of the world’s only free golf course<\/a>, as well as attractions including Buhl Farm Park and a state-of-the-art Food Waste to Energy facility.<\/p>\n Johnstown, Pennsylvania <\/p>\n Johnstown lies about 67 miles east of Pittsburgh, making it an easy day trip to the Steel City. This gives you access to urban amenities without the associated higher living costs. In fact, the median county-level home value in Johnstown is just $115,900. (If you sell a high-value home to move here, you might retire mortgage-free<\/a>.) The town is home to a world-class polka festival as well as numerous options to enjoy the outdoors.<\/p>\n Altoona, Pennsylvania <\/p>\n Altoona is the largest town in Pennsylvania on our list with over 42,400 residents. It\u2019s an ideal retirement destination for those seeking not only affordability but also access to amenities. Altoona is home to a national historic landmark called Horseshoe Curve, a 19th-century marvel of engineering that pushes trains through a dramatic curve. There’s also a regional delicacy called Altoona-style pizza and Amish farm markets to explore.<\/p>\n Conway, New Hampshire <\/p>\n Located on the New Hampshire-Maine border, on the southeastern edge of the White Mountain National Forest, Conway is a small town comprised of five villages. The outdoors offer many attractions, from Cathedral Ledge to Echo Lake, as well as several ski resorts. The Conway Scenic Railroad shuttles visitors and residents across the wider area\u2014it’s a convenient option for day trips. Residents can enjoy its small town charm along with a relatively low tax burden. On top of no state tax on retirement withdrawals, the average monthly tax costs are $609.<\/p>\n Concord, New Hampshire <\/p>\n Concord is New Hampshire\u2019s capital. It\u2019s a medium-sized town with nearly 44,800 residents and lots of art, culture, history, and things to do. Its main street recently underwent a $14 million renovation\u2014it’s bursting with dining options. Other attractions include the Capitol Center for the Arts, which hosts performances, and, for the science-minded, the McAuliffe-Shepard Discovery Center. There’s also the historic State House. Plus, you\u2019re only one hour from Boston and 30 minutes from the Manchester-Boston Regional Airport.<\/p>\n Southeast Natchez is a small town on the Mississippi River. “Considered the birthplace of Mississippi,” its visitors website reads, Natchez “is known internationally as a quaint Southern town with a culture and heritage enriched by the contributions of many.” There are annual festivals, including the Balloon Festival Weekend in October. What makes Natchez stand out among retirement destinations is its incredibly low housing costs.<\/p>\n Fast Fact<\/p>\n The median county-level home value in Natchez, Mississippi is just $106,300, the lowest on our list.<\/p>\n Sebring, Florida <\/p>\n Sebring is a small town in central Florida that offers a humid subtropical climate with hot summers and mild winters. If you\u2019re looking for a retirement destination where nice weather meets tax benefits, Sebring might be it. There’s much to explore, starting with the Sebring International Raceway. There are cultural options (including a collection of murals in a nearby town) and over 100 lakes in the area, as well as a state park.<\/p>\n Paris, Tennessee <\/p>\n Though it shares a name with a pricey city overseas, Paris, Tennessee, is remarkably affordable. It offers small-town charm coupled with a low tax burden. Not only will your retirement income not be taxed, but the average monthly tax costs for two adults and no kids is just $511. In addition to bakeries, parks, and other attractions, there’s even a replica of the Eiffel Tower in town.<\/p>\n Southwest Known as the official Cajun Capital of Texas, Port Arthur is a large town that sits on the Gulf of America. It’s about 90 miles east of Houston. Janis Joplin is a Port Arthur native\u2014she’s featured in the nearby\u00a0Museum of the Gulf Coast. If you enjoy Cajun seafood, water views, and low taxes, Port Arthur might be for you.<\/p>\n Eagle Pass, Texas <\/p>\n Located in southern Texas on the U.S.-Mexico border, Eagle Pass is a medium-sized town with over 28,300 residents and a low cost of living. The average monthly cost of food is $470, and average monthly county-level tax costs for two adults is also $470. The only casino in Texas, the\u00a0Lucky Eagle Casino, is located just outside of town.<\/p>\n Longview, Texas <\/p>\n Longview is a large town about 130 miles east of Dallas. “Our rolling hills are a favorite for travelers of all kinds, whether they ride two, three or four wheels, on the road or off,” its website says. It\u2019s known for its Great Texas Balloon Race and live downtown concerts, so if you\u2019re looking for fun, entertainment, and a low tax burden, Longview is a great choice.<\/p>\n West Pomeroy is a small town in the southeast corner of Washington. Compared to the rest of the state, it has low monthly living costs: $716 for housing and $526 for taxes for two adults and no kids. It’s home to a historic main street.<\/p>\n Omak, Washington <\/p>\n Omak is located in the foothills of the Okanogan Highlands in north-central Washington. For a town of only about 5,050 residents, it has ample access to amenities. There are also several events to look forward to, including a Zombie Fun Run.<\/p>\n Carson City, Nevada <\/p>\n Carson City is a large town just a few miles from Lake Tahoe, the largest alpine lake in North America. Those who retire here have access to beautiful waterfronts and lake activities without the burden of a state tax on retirement income.<\/p>\n Evanston, Wyoming <\/p>\n Evanston is a small town in the southwest corner of Wyoming. On top of not having to pay state taxes on retirement income, residents don\u2019t have to pay state taxes on any individual or corporate income. In fact, the state ranks 1st overall on the Tax Foundation\u2019s 2025 State Tax Competitiveness Index.<\/p>\n How to Optimize Your 401(k) or IRA Withdrawals <\/p>\n To make the most of your 401(k) or IRA withdrawals, follow these best practices:<\/p>\n Start with your RMDs: A required minimum distribution (RMD)<\/a> is the amount you must withdraw from your 401(k) or IRA after age 73 to avoid facing penalties. Start by withdrawing at least this amount. The Bottom Line <\/p>\n Not having to pay state taxes on your 401(k) or IRA withdrawals is a big advantage. It means that every month less of your money will go to the government and more will stay in your pocket. This helps your retirement savings last longer and can help you afford activities, trips, and other expenses you might not be able to afford otherwise. So it’s worth trying one of these places for retirement\u2014you might be surprised at what you find.<\/p>\n","protected":false},"excerpt":{"rendered":"Key Takeaways Retiring in a state that doesn\u2019t tax 401(k), IRA, or Social Security withdrawals lets you keep…\n","protected":false},"author":2,"featured_media":200724,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,246,111,139,69,244,245],"class_list":{"0":"post-200723","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz","13":"tag-personal-finance","14":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/200723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=200723"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/200723\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/200724"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=200723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=200723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=200723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nOf the top 50 U.S. cities to retire<\/a>, 18 are located in states with no state tax on retirement income.
\nFrom low housing costs to access to health care, arts, and entertainment, these tax-friendly cities provide a balance of financial security and quality of life.<\/p>\n
\n Gregory, South Dakota <\/p>\n
\n Hermitage, Pennsylvania <\/p>\n
\n Natchez, Mississippi <\/p>\n
\n Port Arthur, Texas <\/p>\n
\n Pomeroy, Washington <\/p>\n
\nPlan withdrawals around taxes: Withdraw from your 401(k) or IRA before withdrawing from tax-free accounts like a Roth IRA<\/a> to minimize your lifetime taxes.
\nPlan withdrawals around deductions: Some tax deductions for older adults have income limits. Plan your retirement income withdrawals accordingly.<\/p>\n