Discover 18 places with small-town charm and no taxes on your 401(k), IRA, and Social Security income

When you have a steady retirement income, every dollar counts. That’s why it pays to live in a state that doesn’t tax your 401(k), IRA, or Social Security withdrawals — where you can keep more of your money.

Earlier this year, Investopedia compiled a list of 50 of the best cities to retire across the United States, using data such as the average cost of living and access to travel, health care, and entertainment.

Of the 50 best cities to retire, 18 are in states that don’t tax 401(k)s or IRA withdrawals (or your Social Security benefits, for that matter). Here they are grouped by region.

Midwest

Gregory, South Dakota

Gregory is a small town with a population of just over 1,200 people. While the average family only earns $52,432 per year, these earnings are stretched further due to lower costs of living. For example, average housing costs countywide are just $589 per month. The broader area offers “world-class fishing opportunities,” according to the city’s website.

Corning, Iowa

Corning is a slightly larger city with a population of about 1,500 people. On top of no state tax on 401(k)s and Social Security withdrawals, it offers a relatively low county home value of $116,900. That’s nearly a quarter of the national median home value of $410,800. It is also the birthplace of Johnny Carson, who hosted The Late Show for nearly three decades.

(Mason City, Iowa).

Mason City is a medium-sized city with a population of approximately 26,800 people. It combines Midwestern affordability with modern amenities, such as arts and entertainment. Throughout the city there is a wealth of Prairie School style architecture, including Frank Lloyd Wright’s last remaining hotel. Music Man Square honors its connection to the musical The Music Man, whose writer and composer Robert Meredith Wilson was born in Mason City.

Northeast of the country

Hermitage, Pennsylvania

Located on the border of Pennsylvania and Ohio, Hermitage not only has a state tax on retirement income, but the total average monthly tax costs for two adults with no children is relatively low at $560. This allows you to keep more of your income. The Hermitage is the site of the world’s only free golf course, plus attractions including Buhl Farm Park and a state-of-the-art facility to convert food waste into energy.

Johnstown, Pennsylvania

Johnstown is located about 67 miles east of Pittsburgh, making it an easy day trip to the Steel City. This gives you access to urban amenities without the associated high costs of living. In fact, the countywide median home value in Johnstown is just $115,900. (If you sell a highly valued home to move here, you could retire mortgage-free.) The city is home to a world-class polka festival, as well as many options for enjoying the outdoors.

Altoona, Pennsylvania

Altoona is the largest Pennsylvania city on our list with over 42,400 residents. It is an ideal retirement destination for those looking not only for affordability but also access to amenities. Altoona is home to a National Historic Landmark called the Horseshoe Curve, a 19th-century engineering marvel that propels trains through a dramatic curve. There is also a regional delicacy called Altona-style pizza and Amish farm markets you can explore.

(Conway, New Hampshire).

Located on the New Hampshire-Maine border, on the southeastern edge of the White Mountain National Forest, Conway is a small town made up of five villages. The outdoors offers many attractions, from Cathedral Ledge to Echo Lake, as well as several ski resorts. The Conway Scenic Railway transports visitors and residents across the wider region, and is a convenient option for day trips. Residents can enjoy small-town charm along with a relatively low tax burden. On top of there being no state tax on retirement withdrawals, the average monthly tax costs are $609.

(Concord, New Hampshire).

Concord is the capital of New Hampshire. It is a medium-sized city with a population of approximately 44,800 people and has plenty of arts, culture, history, and things to do. Its main street recently underwent a $14 million renovation, and is full of dining options. Other attractions include the Capitol Center for the Arts, which hosts shows, and the McAuliffe-Shepard Discovery Center for the science-minded. There is also the historic statehouse. Plus, you’re just one hour from Boston and 30 minutes from Manchester-Boston Regional Airport.

Southeast

Natchez, Mississippi

Natchez is a small city located on the Mississippi River. “As the birthplace of Mississippi,” its visitors website says, Natchez “is known worldwide as a quaint Southern city with a culture and heritage rich with the contributions of many.” Annual festivals are held, including a balloon festival on the weekend in October. What makes Natchez stand out among retirement destinations is its incredibly low housing costs.

Sebring, Florida

Sebring is a small city in central Florida that offers a humid subtropical climate with hot summers and mild winters. If you’re looking for a retirement destination where beautiful weather meets tax advantages, Sebring may be the destination for you. There’s plenty to explore, starting with Sebring International Raceway. There are cultural options (including a collection of murals in a nearby town) and more than 100 lakes in the area, plus a state park.

Paris, Tennessee

Although it shares a name with an expensive city abroad, Paris, Tennessee is remarkably affordable. It offers small-town charm along with a low tax burden. Not only will your retirement income not be taxed, but the average monthly tax costs for two adults and no children is just $511. In addition to bakeries, parks and other attractions, there is also a replica of the Eiffel Tower in the city.

Southwest

(Port Arthur, Texas).

Port Arthur, known as the official Cajun capital of Texas, is a large city located on America’s Gulf. It is about 90 miles east of Houston. Janis Joplin is a Port Arthur native, and is on display at the nearby Gulf Coast Museum. If you enjoy Cajun seafood, water views, and low taxes, Port Arthur may be the place for you.

Eagle Pass, Texas

Located in South Texas on the US-Mexico border, Eagle Pass is a medium-sized city with more than 28,300 residents and a low cost of living. The average monthly cost of food is $470, and the average monthly county tax costs for two adults is also $470. Texas’ only casino, Lucky Eagle Casino, is located just outside of town.

Longview, Texas

Longview is a large city about 130 miles east of Dallas. “Our undulating hills are a favorite for travelers of all types, whether they ride two, three or four wheels, on or off the road,” its website says. It’s known for the Great Texas Balloon Race and live concerts downtown, so if you’re looking for fun, entertainment, and a low tax burden, Longview is a great choice.

West

Pomeroy, Washington

Pomeroy is a small city in the southeast corner of Washington. Compared to the rest of the state, monthly costs of living are low: $716 for housing and $526 in taxes for two adults and no children. It is home to a historic main street.

Omak, Washington

Omak is located in the foothills of the Okanogan Highlands in north-central Washington. For a city with a population of only about 5,050 people, it has access to amenities. There are also several events to look forward to, including a Zombie Fun Run.

(Carson City, Nevada).

Carson City is a large city located just a few miles from Lake Tahoe, the largest alpine lake in North America. Those who retire here have access to beautiful waterfronts and lake activities without the burden of a state tax on retirement income.

Evanston, Wyoming

Evanston is a small city in the southwestern corner of Wyoming. In addition to not having to pay state taxes on retirement income, residents do not have to pay state taxes on any individual or corporate income. In fact, the state ranks first overall in the Tax Foundation’s 2025 State Tax Competitiveness Index.

How to Optimize Your 401(k) or IRA Withdrawals

To make the most of your 401(k) or IRA withdrawals, follow these best practices:

• Start with your RMDs: A required minimum distribution (RMD) is the amount you must withdraw from your 401(k) or IRA after age 73 to avoid facing penalties. Start by withdrawing at least this amount.
• Withdrawal plan around taxes: Withdraw from your 401(k) or IRA before withdrawing from tax-advantaged accounts like a Roth IRA to reduce lifetime taxes.
• Withdrawal plan around discounts: Some tax deductions for seniors have income limits. Plan your retirement income withdrawals accordingly.

Bottom line

Not having to pay state taxes on 401(k) or IRA withdrawals is a big advantage. This means that each month less of your money will go to the government and more will stay in your pocket. This helps your retirement savings last longer and can help you defray costs for activities, trips, and other expenses that you may not be able to afford otherwise. So it’s worth trying one of these places to retire, you might be surprised by what you find.