Montana
Montana has a very similar story. With the cost of living of 103.7, the majority of retirement incomes are taxed here. Social Security retirement benefits are taxed, too, even if the taxable amount could differ from the federal taxable amount.
The state doesn’t have a sales tax, but in some areas, they charge for a resort tax instead. The property tax rate is quite low here, and the costs of living are 3.7% higher than the national average.
Colorado
In Colorado, you will be surprised to find out that the cost of living is 5.5% higher than the state average, reaching 105.5. Also, the income tax system lets you get a large tax deduction on retirement incomes.
Taxpayers who fall under 55 years old are also allowed to exclude up to $15,000 from their military retirement plan. Railroad retirement benefits in Colorado are also exempt from the state tax.
As property tax rates are lower, sales tax is somehow high (given that it excludes medicine and groceries), exceeding 11% in some areas of the state.
Why wasn’t Hawaii included? It’s more expensive to survive there than in San Francisco! After the wildfire on 8-8-23 wiped out Lahaina on Maui, one family faced having to pay $9K a month to rent a 4-BR house!
Military retirement is not taxed in CT. Future tax pans are expected to reduce tax on other retirement income and social security is taxed on a sliding scale. CT is a very good state for retirees