Choosing where to retire is one of the biggest decisions of your life. Every state has a sales pitch. What matters is the reality of day-to-day living, the tax burden, the healthcare quality, and whether the lifestyle actually matches what you want. Kevin breaks down the five states that consistently rank at the top for retirees — with real numbers, not marketing copy.
1. Florida
Florida’s appeal starts with the tax structure:no state income tax, which means your pension, Social Security, and investment income aren’t taxed at the state level.Florida Department of Revenueconfirms no individual income tax, and the state also exempts Social Security from taxation. The climate is the other obvious draw — warm year-round, with beach access across both coasts.
The caveats: homeowner’s insurance has exploded in Florida following Hurricane Ian and the Surfside collapse. According toInsurance Journal, Florida homeowners pay the highest average premiums in the country — $6,000+/year for coastal properties. Property taxes in popular retirement counties run 1-1.5% of assessed value. The Villages, one of the most famous retirement communities in the world, starts in the mid-$200Ks for condos and runs well over $500K for single-family homes.
2. Arizona
Arizona has made major strides on taxes — the state moved to a flat 2.5% income tax rate in 2023, one of the lowest in the country.Arizona Department of Revenuealso exempts Social Security from state income tax. The Scottsdale, Sun City, and Tucson areas have mature, well-developed retirement infrastructure. Summer heat — 115°F days in Phoenix — is a real consideration, though many retirees escape to higher elevations or travel during the hottest months.
3. Tennessee
Tennessee hasno state income tax on wages or salaries, and the Hall Tax on investment income was fully repealed in 2021.Tennessee Department of Revenueconfirms the full repeal. Cost of living is significantly below national average — median home prices in desirable retirement areas like Chattanooga and the Smoky Mountains region run $280K-$400K. The trade-off is healthcare access: Tennessee’s hospital infrastructure outside major cities is thinner than Florida or Arizona.
4. Delaware
Kevin covers the Maryland vs. Delaware comparison in depth in a separate video, but the Delaware case for retirees is strong:no sales tax, property taxes among the lowest in the mid-Atlantic, and a pension exclusion that exempts up to $12,500 of pension income from state taxes for residents over 60. According toDelaware Division of Revenue, Social Security is fully exempt. For Montgomery County residents considering staying in the region, Delaware offers a meaningful tax improvement. See the full comparison in the Maryland vs Delaware retirement article.
5. South Carolina
South Carolina exempts Social Security from state income tax and offers a substantial retirement income deduction — up to $15,000 for residents over 65.South Carolina Department of Revenuepublishes the full breakdown. The Hilton Head, Kiawah Island, and Myrtle Beach areas have well-developed retirement communities with strong healthcare access. Cost of living is below Florida in most categories. The growing retiree population has driven property values up in coastal SC significantly since 2020, but it remains cheaper than comparable Florida markets.
What About Maryland?
Maryland doesn’t make the top 5 for pure retirement tax efficiency — the state income tax burden is real, property taxes are higher than Delaware, and cost of living is elevated. But for retirees who want to stay near family, maintain DC access, and stay in the MCPS school district for grandchildren considerations, staying in Montgomery County has lifestyle value that pure tax calculations don’t capture. TheMontgomery County relocation guidecovers what staying looks like financially.
Frequently Asked Questions
Which state has the lowest taxes for retirees?
Florida, Tennessee, and Delaware all offer strong tax environments for retirees — no income tax on wages/pensions in Florida and Tennessee, low property taxes and full Social Security exemption in Delaware. Arizona’s 2.5% flat tax and Social Security exemption make it competitive as well.
Is Florida still the best state for retirement?
Florida remains at or near the top for tax advantages and climate. The rising homeowner’s insurance costs — now among the highest in the country — are a significant offset that wasn’t as relevant five years ago. Budget for $4,000-$8,000/year in insurance depending on location and property type.
Is Delaware a good state to retire from Maryland?
Often yes. No sales tax, low property taxes, Social Security exemption, and pension income deduction make Delaware meaningfully cheaper for retirees than Maryland. It’s close enough to maintain family connections and healthcare relationships in the region.
What should I consider besides taxes when choosing a retirement state?
Healthcare access and quality, proximity to family, climate, cost of living beyond taxes (groceries, utilities, insurance), social and cultural amenities, and the specific community you’d live in. Tax savings that come with isolation or poor healthcare access aren’t necessarily a good trade.
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Sources and next steps
Verified local sources:Maryland REALTORS housing statistics;GCAAR housing market reports;FRED 30-year mortgage rate series;Maryland SDAT real property search.
Related Kevin guides:market stats;relocation guide;book a call.
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Expanded local research sources:GCAAR housing market reports;Maryland REALTORS housing statistics;Realtor.com Montgomery County market data;FRED 30-year mortgage rates;Maryland SDAT real property search;Zillow Montgomery County home values;Montgomery Planning development;Montgomery Planning development review;MCATLAS zoning map;Montgomery Planning data catalog;Montgomery County permits;Visit Montgomery travel guide;Visit Montgomery restaurant directory;Tripadvisor Montgomery County things to do.
Contextual links for this video
Kevin site links:home selling guide;market stats;DMV Housing Market 2026: Is a Crash Coming or Are the Numbers Telling a Different Story?;Zillow Just Banned Private Listings — Here’s What Home Buyers and Sellers Actually Need to Know;10 Things You Should Never Say to Your Real Estate Agent When Selling Your Home.
Outside research links for this video:GCAAR housing market reports;Maryland REALTORS housing stats;Realtor.com Montgomery County market data;Reddit discussion search for this topic;Google context search for this video.
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