Retirement Retired Life

11 Hidden Gem Cities Where Retirees Pay Zero State Income Tax (But Nobody Talks About Them)

Picking the right retirement spot can help you make the most of your savings.

By Sarah Sharkey , Edited by Jessica Gibson

Updated April 6, 2026

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When planning for retirement, where you choose to spend your golden years can make all the difference. Specifically, opting for a city that allows you to stretch out your nest egg through the help of no state income tax or generally lower cost of living can help you set yourself up for retirement.

This guide explores overlooked gems where retirees can live comfortably on around $75,000 per year.

Editor's note: Housing data comes from Zillow and cost of living data comes from PayScale.com.

San Marcos, Texas

Home to Texas State University, San Marcos offers a blend of small-town affordability with big-city perks. Situated almost directly between Austin and San Antonio, San Marcos residents are a short drive away from two relatively large airports. The lively downtown scene is home to ample cultural events.

In terms of costs, Texas residents don't face a state income tax. With a cost of living below the national average, many retirees can enjoy a more affordable lifestyle in this thriving town.

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Palatka, Florida

Palatka sits on the St. John's River, around 45 minutes away from Florida's east coast. The town is home to plenty of scenic river views and a picturesque state park. It's outside of the regular hustle and bustle of St Augustine and Jacksonville. But retirees can access top-tier healthcare in nearby Jacksonville or Gainesville.

Average home values in Palatka are $204,123, and the lack of a state income tax sweetens the deal.

Tyler, Texas

This "Rose Capital of America" delivers small-town charm and surprising amenities. You'll find sufficient healthcare access and a vibrant arts community.

With a cost of living around 7% less than the national average and average home values of $248,563, retirees can take advantage of a well-rounded place to call home. Plus, Texas's tax-friendly stance seals its appeal for retirees seeking peace without isolation.

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Manchester, New Hampshire

For retirees seeking a home with four-season living, Manchester, New Hampshire, offers a relatively budget-friendly choice. The lack of state income taxes may help you stretch your savings further.

Although this city's cost of living is around 10% higher than the national average, it's well below the cost of living in nearby cities, like Boston.

Bellingham, Washington

Bellingham sits between Seattle and Vancouver. It comes with all of the coastal beauty that many retirees crave, with excellent healthcare access and plenty of opportunities to get outdoors.

While Bellingham isn't the cheapest option on this list, it's significantly more affordable than Seattle and doesn't involve a state income tax.

Murfreesboro, Tennessee

Murfreesboro is just a 40-minute drive away from the better-known Nashville, Tennessee. The cost of living in this town is on par with the national average, but you won't contend with any state income taxes.

While this southern city does experience four seasons, winter is relatively mild. Residents can enjoy easy access to healthcare resources and plenty of cultural activities in both Murfreesboro and nearby Nashville.

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Chattanooga, Tennessee

Chattanooga sits on the banks of the Tennessee River, just north of the Georgia state line. For retirees seeking beautiful mountain vistas, Chattanooga's proximity to the Appalachian Mountains makes it an ideal choice. With a revitalized downtown, residents will find a growing dining and arts scene.

The cost of living in Chattanooga is 12% lower than the national average, and average home prices sit around $314,306.

Knoxville, Tennessee

Knoxville is nestled in the Appalachian Mountains. With seemingly endless vistas and easy access to the Great Smoky Mountains, residents will find plenty of outdoor activities. Additionally, the city boasts a rich history, which permeates the city with historic charm.

The cost of living in Knoxville is 14% lower than the national average, and the state's lack of an income tax could make living in this outdoor haven an affordable dream come true.

Boulder City, Nevada

For retirees seeking a sunny spot, Boulder City could offer a great opportunity. This desert climate offers hot summers and mild winters with limited rainfall. Although this community offers plenty of access to nature and a quieter pace, the hustle and bustle of Las Vegas is a short drive away.

Although it's not the most affordable option on this list, it's slightly more affordable than nearby Las Vegas.

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Rapid City, South Dakota

Rapid City is a mid-size city that sits in western South Dakota. You'll find a growing downtown area with a dining scene and a strong local economy. Additionally, residents can find access to healthcare in town. Although the summers are pleasant, the winters can bring significant snow. In terms of getting outside, this city could serve as a jumping-off point to explore the Badlands, which are known for their surprising beauty.

Rapid City offers a cost of living below the national average. Plus, the lack of state income tax further tamps down your costs.

Casper, Wyoming

Casper attracts visitors seeking out the wild beauty that Wyoming is known for. The historic town offers a taste of the American West with plenty of charming details. Additionally, you'll find access to healthcare and other amenities in town. But the surrounding natural beauty of Casper offers many residents a quiet and peaceful place to call home.

With a cost of living 13% below the national average and no state income taxes to factor into your budget, Casper could offer the right twist for some retirees.

Bottom line

When deciding on a retirement destination, budgeting isn't the only factor that comes into play. Many consider their favorite vacation spots and family member locations before settling in a new town.

Hidden gem cities don't always stay hidden forever. As you assess your retirement readiness, consider taking a trip to visit a place that piques your interest before jumping into your next chapter.

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