Just realized something that could be pretty relevant for anyone thinking about where to retire. Turns out 13 states in the US don't tax retirement income at all. Like, zero taxes on Social Security, 401(k) withdrawals, IRAs, pensions—the whole package.

The full list is Alaska, Florida, Illinois, Iowa, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, and Wyoming. Nine of these states actually have zero state income tax across the board. The other four specifically carved out tax breaks for retirees even though they do tax regular income.

Now here's where it gets interesting. If you're wondering does Indiana tax retirement income—the answer is yes, they do. Indiana taxes retirement income, which is something to factor in if you're considering that region. Same goes for most other states, honestly. Only those 13 have made the full commitment to not touching retirement income.

There are some nuances worth knowing. Washington doesn't have income tax but does tax capital gains. Mississippi and Pennsylvania will hit you with taxes on early distributions if you withdraw before hitting retirement age. So it's not always as simple as 'move to X state and pay nothing.'

Federal taxes are still a thing no matter where you live though. The IRS wants its cut regardless. How much of your Social Security gets taxed federally depends on your combined income. If you're filing individually and your combined income is under $25,000, you're clear. Between $25k-$34k, up to 50% of benefits could be taxable. Over $34k, you could owe taxes on up to 85% of your Social Security.

For married couples, those thresholds jump to $32k, $32-44k, and over $44k respectively.

The real question is whether this tax planning actually moves the needle for your retirement. For some people, especially those with substantial retirement income, picking the right state could genuinely save thousands annually. For others, it might not be worth uprooting your entire life. Worth running the numbers though if you're in a high-tax state and have flexibility on where to retire.