18 Small Towns With No Taxes on 401(k), IRA, and Social Security Income to Consider

Key Takeaways Retiring in a state that doesn’t tax 401(k), IRA, or Social Security withdrawals lets you keep more of your income and stretch your savings further. Of the top 50 U.S. cities to retire , 18 are located in states with no state tax on retirement income. From 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. When you’re on a fixed retirement income , every dollar counts. That’s why it pays to live in a state that won’t tax your 401(k), IRA, or Social Security withdrawals-you get to keep more of your money. From 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.Marcia Straub/ Getty Images Earlier this year, Investopedia compiled a list of 50 of the best cities to retire in across the U.S., using data like the average cost of living and access to travel, health care, and entertainment. Of the 50 top cities to retire in, 18 are located in states that don’t tax your 401(k) or IRA withdrawals (or your Social Security benefits , for that matter). Here they are grouped by region. Midwest Gregory, South Dakota Gregory is a small town with just over 1,200 residents. While the median 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. Corning, Iowa 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’s 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. Mason City, Iowa 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 Frank Lloyd Wright's last remaining hotel. Its Music Man Square honors its connection to the musical The Music Man, whose writer and composer, Robert Meredith Wilson, was born in Mason City. Northeast Hermitage, Pennsylvania Located on the Pennsylvania-Ohio border, Hermitage not only doesn’t 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 , as well as attractions including Buhl Farm Park and a state-of-the-art Food Waste to Energy facility. Johnstown, Pennsylvania Johnstown lies about 67 miles east of Pittsburgh, making it an easy day trip to the Steel City. This gives you access to...

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