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4 U.S. Small Towns Retirees Have To Pay Social Security Taxes In (And 7 They Won’t)

Remember to factor in taxes when deciding where you want to spend your golden years.

By Jenny Cohen

Edited by Chris Kissell

Updated March 5, 2025

Small towns can be a great option for retirement, but it's important to consider some key financial factors before you move to one of these places.

One issue to review is whether a state will tax your Social Security benefits. Such taxes can be an additional burden on your bottom line, forcing you to supplement your income.

Will you pay Social Security taxes in the following small towns popular with retirees? Find out.

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North Port, Florida

North Port is near the Gulf of Mexico, making it a good option if you want to be near water when you retire.

You won't have to pay taxes on your Social Security income, as Florida has no state income tax. However, you will still have to pay property taxes and sales tax.

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Wofford Heights, California

Wofford Heights offers good weather and plenty of access to nature if you enjoy hiking, fishing, and boating.

The state doesn't tax Social Security benefits, but California has the highest state sales tax at 7.25%.

Media, Pennsylvania

Media is about a half-hour from Philadelphia, giving you small-town vibes while still offering access to a major city.

Pennsylvania does not tax Social Security, and you also don't have to pay taxes on retirement account withdrawals or pensions, giving you an added reason to move to the Keystone State.

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Holly Hills, Colorado

Holly Hills is a town outside of Denver that offers access to outdoor activities year-round, such as skiing in the winter and hiking in the summer.

Social Security is partially taxed in Colorado, but residents get deductions of between $20,000 and $24,000 depending on their age.

Pendleton, New York

Pendleton is about 20 miles from Buffalo and offers great outdoor activities and nearby lakes. Niagara Falls will also keep you busy.

Your Social Security benefits are not taxed in the state, but retirement account withdrawals are partially taxed.

Lehi, Utah

Lehi is in the mountains of Utah, which makes it attractive if you like skiing, hiking, and other outdoor activities. It is also about a half-hour from Salt Lake City.

Utah does fully tax Social Security income. Check with the state to see if you qualify for a Social Security tax credit, which could help you save money.

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Green Valley, Arizona

If you want to be around other retirees, Green Valley can be a fine choice. The median age there is 73.5 years old.

Social Security is not taxed in Arizona, but you will owe taxes on things such as retirement account withdrawals.

Kimmswick, Missouri

Kimmswick is an affordable option that is about 30 minutes from St. Louis if you want access to a big city.

Starting this year, Missouri no longer taxes Social Security benefits.

Bristol, Vermont

Bristol has a New England small-town feel that you may enjoy if you can handle cold and snowy winters.

Vermont taxes Social Security, but individual middle-class retirees who earn in the range of $50,000 or less typically are exempt.

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Georgetown, Texas

Georgetown caters to older Americans with its Sun City development for residents who are 55 and older.

The state is also good for retirees who don't want to pay taxes on Social Security, as Texas does not tax income.

Hamilton, Montana

Enjoy beautiful scenery and outdoor activities when you retire in Hamilton.

Montana taxes Social Security income, but only if it's above a certain threshold. So, check with the state before deciding whether to move there.

Bottom line

Moving to a new place in retirement can be exciting, but it's important to review the tax situation before making a final decision.

Make sure your retirement plan includes all estimated expenses, including whether your Social Security benefits will be taxed.

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