News & Trending Tax News

4 U.S. Small Towns Retirees Have To Pay Social Security Taxes In (And 7 They Won’t)

Remember to factor in taxes when deciding where you want to spend your golden years.

charming downtown streets Cold Spring New York
Updated Oct. 24, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Small towns can be a great option for retirement, but it’s important to consider some key financial factors before you move to one of these places.

One issue to review is whether a state will tax your Social Security benefits. Such taxes can be an additional burden on your bottom line, forcing you to supplement your income.

Will you pay Social Security taxes in the following small towns popular with retirees? Find out.

If you’re over 50, take advantage of massive travel discounts and trip-planning resources

Over 50 and love traveling? Join AARP today — because if you’re not a member, you could be missing out on huge travel perks. When you start your membership today, you can get discounts on hotels and resorts, airfare, cruises, car rentals, and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

An AARP membership not only unlocks discounts that could save you hundreds on your next trip, but you’ll also have access to deals on vacation packages, guided tours, and exclusive content to help plan your next getaway.

Important: Start your membership by creating an account here and filling in all of the information (do not skip this step!). Doing so will allow you to take up to 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

North Port, Florida

Pelow Media/Adobe North Port Florida city entrance

North Port is near the Gulf of Mexico, making it a good option if you want to be near water when you retire.

You won’t have to pay taxes on your Social Security income, as Florida has no state income tax. However, you will still have to pay property taxes and sales tax.

Wofford Heights, California

Avi/Adobe Wofford Heights California during day

Wofford Heights offers good weather and plenty of access to nature if you enjoy hiking, fishing, and boating.

The state doesn’t tax Social Security benefits, but California has the highest state sales tax at 7.25%.

Media, Pennsylvania

World Travel Photos/Adobe Red Covered Bridge

Media is about a half-hour from Philadelphia, giving you small-town vibes while still offering access to a major city.

Pennsylvania does not tax Social Security, and you also don’t have to pay taxes on retirement account withdrawals or pensions, giving you an added reason to move to the Keystone State.

Earn a $250 travel bonus with this incredible card

There's a credit card that's making waves with its amazing bonus and benefits. The Bank of America® Travel Rewards credit card has no annual fee and you can earn 25,000 bonus points after spending $1,000 in purchases in the first 90 days of account opening.

You can earn additional points just by using this card for your everyday purchases — unlimited 1.5 points per $1 spent on all purchases. The 25,000 bonus points can be redeemed for a $250 statement credit toward travel or dining purchases.

If you want to travel and dine out more, the Travel Rewards card can help you get where you want to go.

The best part? There's no annual fee.

Click here to apply now.

Holly Hills, Colorado

MarekPhotoDesign.com/Adobe welcome to Colorado sign

Holly Hills is a town outside of Denver that offers access to outdoor activities year-round, such as skiing in the winter and hiking in the summer.

Social Security is partially taxed in Colorado, but residents get deductions of between $20,000 and $24,000 depending on their age.

Pendleton, New York

Courtesy of FinanceBuzz North Facade of One Pendleton Place

Pendleton is about 20 miles from Buffalo and offers great outdoor activities and nearby lakes. Niagara Falls will also keep you busy.

Your Social Security benefits are not taxed in the state, but retirement account withdrawals are partially taxed.

Lehi, Utah

Courtesy of FinanceBuzz The Mill Pond Lehi Utah

Lehi is in the mountains of Utah, which makes it attractive if you like skiing, hiking, and other outdoor activities. It is also about a half-hour from Salt Lake City.

Utah does fully tax Social Security income. Check with the state to see if you qualify for a Social Security tax credit, which could help you save money.

Green Valley, Arizona

Courtesy of FinanceBuzz Green Valley Arizona

If you want to be around other retirees, Green Valley can be a fine choice. The median age there is 73.5 years old.

Social Security is not taxed in Arizona, but you will owe taxes on things such as retirement account withdrawals.

Kimmswick, Missouri

steheap/Adobe Mississippi river south of St Louis

Kimmswick is an affordable option that is about 30 minutes from St. Louis if you want access to a big city.

Starting this year, Missouri no longer taxes Social Security benefits.

Bristol, Vermont

Courtesy of FinanceBuzz Bristol vermont under cloudy sky

Bristol has a New England small-town feel that you may enjoy if you can handle cold and snowy winters.

Vermont taxes Social Security, but individual middle-class retirees who earn in the range of $50,000 or less typically are exempt.

Unlock exclusive entertainment deals and VIP perks (without a credit card)

Ready to take your entertainment and travels to the next level? Experience the finer things in life with the SELECT card.

No, it's not a credit card, it’s an exclusive membership — and your passport to a world of elite benefits and unforgettable moments.

Imagine sipping complimentary cocktails in downtown Manhattan at KYU NYC or saving 20% on the best sushi in Hollywood Hills at Yamashiro.

Like to shop? Members receive VIP discounts like 15% off at Brooks Brothers, and up to 60% off at Tumi.

Enjoy special offers at luxury hotels like the Four Seasons and Omni Select. For example, you get 15% off at Hyatt Hotels worldwide.

But it’s not just about the hundreds (or thousands) you could save. There are so many features that make you feel like a VIP every day. Like SELECT’s white-glove concierge that assists with bookings, recommendations, or anything you need. And priority access to reservations to some of the year’s hottest events (many not open to the public).

Apply for the SELECT card today

Georgetown, Texas

Cbrady310/Wirestock Creators/Adobe Courthouse in Georgetown Texas

Georgetown caters to older Americans with its Sun City development for residents who are 55 and older.

The state is also good for retirees who don’t want to pay taxes on Social Security, as Texas does not tax income.

Hamilton, Montana

vesperstock/Adobe vegetation clouds over mountains Hamilton Montana

Enjoy beautiful scenery and outdoor activities when you retire in Hamilton.

Montana taxes Social Security income, but only if it’s above a certain threshold. So, check with the state before deciding whether to move there.

Bottom line

Roberto/Adobe Benton county small downtown buildings and cars parked

Moving to a new place in retirement can be exciting, but it’s important to review the tax situation before making a final decision.

Make sure your retirement plan includes all estimated expenses, including whether your Social Security benefits will be taxed.

Easy-to-Earn Unlimited Rewards

Benefits

Card Details

  • $0 annual fee
  • Simple, flat-rate rewards
  • Flexible redemption options
  • Up to 75% preferred Rewards bonus potential
  • Apply Now
  • Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don't expire as long as your account remains open.
  • 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases.
  • Use your card to book your trip how and where you want - you're not limited to specific websites with blackout dates or restrictions.
  • Redeem points for a statement credit to pay for travel or dining purchases, such as flights, hotel stays, car and vacation rentals, baggage fees, and also at restaurants including takeout.
  • 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 18.74% - 28.74% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 4%.
  • If you're a Bank of America Preferred Rewards® member, you can earn 25%-75% more points on every purchase. That means instead of earning an unlimited 1.5 points for every $1, you could earn 1.87-2.62 points for every $1 you spend on purchases.
  • Contactless Cards - The security of a chip card, with the convenience of a tap.
  • This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Bank of <span class='whitespace-nowrap'>America<sup>®</sup></span> Travel Rewards credit card
4.1
info
Apply Now

on Bank of America’s secure website

Read Card Review

Intro Offer

Earn 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases

Annual Fee

$0

+

Why we like it