South Dakota

South Dakota attracts retirees with its natural beauty, rich history, and strong community. For retirees, the Mount Rushmore State has a low retirement income tax rate.

One state without an income tax is South Dakota. All income, including Social Security, pensions, and 401(k) and IRA payouts, is exempt from state taxes. This tax-friendly policy gives seniors extra money to enjoy their golden years.

South Dakota offers tax benefits beyond retirement income. Retirees may leave their possessions to their heirs without state taxes. With no income tax, pensioners and their family may save capital.

However, South Dakota retirees should address many tax issues. Local governments may increase the state’s 4.5% general sales tax to 6.5%. Property taxes are minimal but vary by county and property value.