To make the most of retirement income, many retirees look to live in places that don't tax retirement income. There are several options so retirees can take their pick. While states have guidelines, it is also important to take a close look at city and county rules and regulations to ensure they too, do not tax any sort of pension and/or income.
States with No Income Tax
While Federal taxes will still apply, people living in: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming will not be subject to any state income tax. We must note however, these states are not necessarily cheaper to live in, because the lack of income taxes must be compensated elsewherre, such as in sales tax or property tax.
States that Do Not Tax Pensions
Louisiana: Will tax certain pensions, but not federal pensions, and waives state tax for some others.
Pennsylvania: Will not tax any pension, but will still tax wages.