19. North Carolina
- State sales and average local tax: 6.98 percent
- State tax on your Social Security: None
- Effective property tax: 0.85 percent
- Income tax rate (65+): 5.25 percent
The best thing about moving to North Carolina is the fact that your Social Security benefits aren’t subject to taxation. However, Tar Heel State’s income tax rates are pretty high than most U.S. states. State sales and average local tax are decent, but it doesn’t mean you can’t do better.
18. Alabama
- State sales and average local tax: 9.22 percent
- State tax on your Social Security: None
- Effective property tax: 0.40 percent
- Income tax rate (65+): 5 percent
Another tax-friendly state you should consider when opting for the best retirement state is Alabama. Property taxes are really low, making Alabama a homeowner’s dream, but when it comes to its sales tax rate, you might want to give another state a chance since it is the third highest in our country.
