Which states have no tax on FERS pensions?

Several states exempt federal pension income from state income tax, including Alabama, Hawaii, Illinois, Louisiana, Massachusetts, Michigan, Mississippi, New York, Pennsylvania, and Wisconsin. Some of these states still tax other retirement income like TSP withdrawals. Check the tool for details on each state.

How much can I save by moving to a lower-cost state in retirement?

Moving from a high-tax, high-cost state to one with no pension tax and lower cost of living can save $5,000–$20,000+ per year in retirement. The exact savings depend on your pension amount, TSP withdrawals, and the cost-of-living difference between your current and target states.

Does FEHB coverage change if I move to another state?

FEHB coverage continues regardless of which state you live in. However, your plan choices and premiums may differ by region, and network availability varies. You can change plans during Open Season regardless of relocation.

Where to Retire — State Comparison Tool

Current tax burden

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per year on retirement income

Best state savings

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per year vs. current state

Best state

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lowest combined cost

10-year savings

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cumulative, best state

No Income Tax 9 states

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Pension-Exempt 0% tax on federal pensions

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Low Cost of Living COL ≤ 92

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High Tax States ≥ 5% on pensions

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⭐ Best Overall Pension-exempt + Low COL

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Counties

Full state comparison

State	Income tax %	Est. tax $/yr	COL index	Property tax %	Sales tax %	Climate	Healthcare	Annual savings

Important: These are estimates based on state-level averages and simplified tax assumptions. Your actual tax burden depends on income level, deductions, local rates, and individual circumstances. Always consult a qualified tax advisor before making relocation decisions. Property tax estimates use effective rates; actual bills vary by county and assessment practices.

Estimate your retirement income Tax guide for federal retirees