5 States That Do Not Tax Social Security or Retirement Income

3. Tennessee

Insider Monkey Score: 19

Tax Friendliness: Tax Friendly

Cost of Living Index: 90.4

The state of Tennessee does not have an individual income tax. Therefore, Social Security retirement benefits and other forms of retirement income are not taxed in the state. Public and private pension income is not taxed either. The cost of living here is 9.6% lower than the national average. However, the one tax that can hit hard is sales tax.