Texas
Texas is more than the Lone Star State—it provides retirees a favorable tax climate. Texas’s retirement income taxes attracts retirees.
Texas does not tax income. All income—including Social Security, pensions, and 401(k) and IRA distributions—is tax-free. This may help retirees save more money.
Texas gives retirees tax advantages beyond retirement income. The state has no estate or inheritance taxes, simplifying estate planning and relieving heirs of financial constraints.
Even so, Texas retirees must know certain tax requirements. Texas’ high property tax rate may deter retirees from buying a house. The state’s sales tax is high at 6.25%, and local governments may add up to 2%, making the maximum sales tax 8.25%.
