These 6 Charming Havens Don’t Just Spare Your Social Security—They Keep All Retiree Taxes Low

When it comes to the best places to retire in the U.S., headlines often highlight states with no income or Social Security taxes. Yet, factors like sales and property taxes, which can meaningfully impact a retiree’s bottom line, are equally important—though often overlooked.

To create a comprehensive view of tax-friendly cities for older adults, Investopedia partnered with Travel + Leisure to analyze data and pinpoint towns with the lowest combined tax burdens. We examined median income taxes and FICA (payroll) taxes, median sales taxes, average property taxes, and the taxation of retirement income from Social Security, 401(k) plans, and IRAs at the state level.

Ultimately, six cities rose to the top, each blending minimal tax burdens with enticing local amenities to offer retirees an exceptional balance of value and lifestyle.

1. Conway, New Hampshire

Conway, the smallest community on our list, is comprised of several charming villages and has views of New Hampshire’s majestic White Mountains. 

For active retirees, this region promises endless adventure and natural beauty. Winter brings snow skiing, while summer invites exploration of covered bridges, cascading waterfalls, and tranquil swimming holes. 

The town also boasts inviting bookshops, antique stores, historic buildings, and even a Victorian-era train station for an extra dose of nostalgia.

Like all of the locations on this list, residents of Conway do not pay tax on retirement income, including Social Security income. Residents of Carroll County, which includes Conway, also pay the lowest combination of taxes of any of the counties represented on this list—just a median $916 a month—thanks in large part to New Hampshire’s absence of a sales tax. With no taxes on Social Security benefits, 401(k)s, or IRAs, retirees who don’t earn other types of income may find their tax bills exceptionally modest.

However, what you save in taxes, you might end up spending on housing since the median home value is $348,900—still low by national standards, but higher than any of the other places on this list. 

2. Johnstown, Pennsylvania

Nestled within the Allegheny Mountains, Johnstown enchants with stunning vistas year-round. Between total median monthly taxes of $944 and median home values around $116,000, don’t be surprised if you can afford a home that captures Johnstown’s beautiful views. The tax burden for retirees is so low partly because Pennsylvania’s sales tax rate is a reasonable 6%, with no additional local sales tax. And though the state does have income tax, it’s a flat 3.07% and doesn’t apply to Social Security or other forms of retirement income. 

Johnstown’s Cambria County boasts more than 125,000 acres of public land, including three well-stocked lakes where you can catch bass, muskellunge, and panfish. History enthusiasts can pedal the 51-mile Ghost Town Trail, lined with long-gone coal-mining communities and dotted with informative plaques that tell the region’s story.

3. Hermitage, Pennsylvania

Hermitage offers small-town charm paired with big-city amenities—plentiful dining, shopping, museums, and vibrant arts. If you ever get bored with the local offerings, Cleveland, Pittsburgh, and Erie are all within a roughly 90-minute drive (with no traffic).

For retirees who prioritize health care, Hermitage is conveniently located within 25 miles of 12 hospitals, complemented by an array of health care establishments throughout Mercer County.

Despite its amenities, Mercer County residents pay a median of just $968 per month in combined taxes, including roughly $160 in property taxes.

4. Altoona, Pennsylvania

Unlike the other small Pennsylvania towns on this list, Altoona is a mid-sized city of over 40,000 residents. It delivers many of the same mountain vistas and recreational opportunities as Johnstown. Retirees can enjoy swimming, boating, and fishing at Canoe Creek State Park, or explore the Railroaders Memorial Museum and the iconic Horseshoe Curve Landmark.

As for taxes, residents of Altoona and other parts of Blair County pay a median of $982 in combined taxes, including $143 for property taxes and $246 for state sales taxes.

5. Paris, Tennessee

If you haven’t yet had a chance to see the “City of Light,” you can get a taste of it in Paris, Tennessee. The town embraces its Parisian connection with its own 70-foot-tall, illuminated Eiffel Tower replica in the city’s Eiffel Tower Park.

But don’t be fooled; this small town is also très Americain. The World’s Biggest Fish Fry—a week-long festival serving over 12,500 pounds of catfish—features a parade, quirky catfish races, rodeos, and even a lively carnival.

As residents of Henry County, retirees here enjoy average monthly property taxes of just $58 a month, along with median FICA and federal income taxes of $511. Tennessee has no state income tax. The typical family also pays a median of $433 a month in sales tax.

6. Sebring, Florida

Sebring is best known for the Sebring International Raceway, originally a World War II airbase transformed into North America’s oldest permanent road racing track. The famed 12 Hours of Sebring annual motorsports race is held here, and the venue’s raceway hums with activity more than 300 days annually.

Retirees can also enjoy the annual Sebring Arts & Crafts Festival, the “Let It Grow” Garden and Plant Festival, championship-level golf courses, and access to more than 100 nearby lakes.

Those considering Sebring will find total median monthly total combined taxes of $1,015, including about $110 in property taxes, roughly $360 in state sales taxes per family, and nearly $550 in FICA and federal income taxes. (There is no state income tax.)

The Bottom Line

As Benjamin Franklin famously said, nothing is certain except death and taxes. But you can still take steps to try to reduce how much you pay in taxes during retirement. These six towns prove that with the right location, it’s possible to retain more of your hard-earned retirement savings without sacrificing comfort or fulfillment.

To learn more about how we created our list of the six surprising tax havens for retirees in the U.S., see our methodology.