5 States That Don’t Tax Social Security Or Pensions

4. Tennessee

Cost of Living Index: 90.2

There are no income taxes in the state of Tennessee. Warm climates, recreational activities, and an overall tax-friendly climate makes this state a desirable option for retirees. While sales tax is at a highest at 7%, property taxes are low (0.56%). Overall, Tennessee is one of the most affordable options for retirement. Cost of living is 10% lower than the national average at $42, 469 per year. Housing costs are 20% lower, while utilities are 6% lower than the national average.