Friend, the dream of retirement — fun in the sun, golf, grandkids, and lemonade by the pool — is something most of us look forward to. But where you choose to spend those golden years can have a surprisingly big impact on your finances and your overall peace of mind.

The right state (or even the right city within a state) depends on your sources of income and how different taxes will affect your monthly budget. As good stewards, we want to be wise with every dollar God has entrusted to us so we can enjoy our later years and still have resources to bless our families and the causes close to our hearts.

Here are the four main taxes that can vary significantly from state to state and directly affect your retirement lifestyle:

1. Taxes on Pension Income

Only three states currently do not tax pension income at all: Mississippi, Illinois, and Pennsylvania. If you have a military or government pension, you have several more fully tax-free options, including New York, Michigan, Hawaii, Kansas, Louisiana, Massachusetts, and Alabama.

Many other states tax pensions to varying degrees. If pension income is a major part of your retirement plan, this is one of the most important factors to research carefully.

2. Sales Taxes

Four states have no statewide sales tax: Alaska, New Hampshire, Oregon, and Montana. Most states do have sales tax, though rates and what’s exempt (such as groceries or medical supplies) differ widely.

If you enjoy shopping or expect to make regular purchases, even small differences in sales tax rates can add up over time and reduce the money you have available for the lifestyle you want.

3. Property Taxes

Property taxes can be one of the largest ongoing expenses in retirement, especially if you own a home or multiple properties. They are largely based on local real estate values, so living in an area with more affordable housing can significantly lower this cost.

Don’t forget to check city and local taxes too — they can add a meaningful amount. In some high-tax areas, it may actually make more financial sense to rent rather than own. Always calculate the expected property tax before you decide where to settle.

4. Taxes on Social Security Benefits

Thirty-six states plus Washington, D.C. do not tax Social Security benefits at all. The remaining states do tax them to some degree, though most have income thresholds that limit the impact.

If Social Security is your primary or only income source, this tax matters more. For most people it’s relatively small, but it’s still worth checking exactly how your chosen state handles it.

Seven States with No Income Tax on Wages

Currently, these seven states have no state income tax on wages (and Tennessee is scheduled to join them):

• Alaska
• Florida
• Nevada
• South Dakota
• Texas
• Washington
• Wyoming

Final Advice

Taxes are only one piece of the puzzle. You’ll also want to consider cost of living, healthcare access, climate, proximity to family, and the overall retirement lifestyle you desire. But ignoring the tax impact can quietly drain your retirement funds month after month.

Take time to visit the Department of Revenue website for each state you’re seriously considering. The information is public, clear, and worth the effort. A few hours of research now can save you thousands of dollars and a lot of stress later.

Choosing where to retire is one of the biggest stewardship decisions you’ll make in this season of life. Make it prayerfully and with open eyes so you can enjoy the peaceful, purpose-filled retirement you’ve worked so hard for.

If you want practical help planning your retirement finances, building reliable cash flow, and making wise decisions that protect your future, I invite you to join my free weekly webinar every Thursday. We walk through real strategies, answer your questions live, and help you see if our Retirement Club & Community is the right next step for your journey.

You’re not alone in this. Let’s rescue your retirement — one wise, faith-guided decision at a time.