Beware these 15 worst states for taxes on your retirement

Maybe you want to spend your retirement somewhere sunny. Or maybe a view of the mountains is more your style.

But before you start making plans, its worth looking at the tax situation in any state youre considering. Some places impose significantly harsher taxes on retirees than others.

Our rankings take into consideration how much tax each state imposes on retirement income, any state-imposed estate or inheritance taxes, and the Tax Foundations estimates for average state and local sales taxes and the average, effective property tax. We also highlight some of the tax credits and exclusions seniors may qualify for.

An expert can help you look at your options. Certified financial planners who are "fiduciaries" have strategies just for retirees and they're bound by law to put your interests first.

Here are the 15 worst states when it comes to taxing retirees, counting down to the state where seniors face the worst tax burdens.

Tax on retirement income: Yes

State income tax: 5% flat rate

Average property tax: 1.15% of home value

Average state and local sales tax: 6.25%

Massachusetts does not tax Social Security benefits or government pension income, but most other retirement income is taxed at a flat rate of 5%.

The Bay State has the 18th-highest average property tax rate in the country, with owners of a $350,000 house paying roughly $4,025 in tax per year.

Fortunately, residents over the age of 65 who earn less than a certain amount (for the 2020 tax year, thats $61,000 for individuals and $92,000 for married couples who file jointly) are eligible for a property tax credit of up to $1,150.

Massachusetts also has an estate tax a tax on the fair market value of your assets after you die ranging from 0.8% to 16% on estates worth over $1 million. This $1 million threshold is tied with Oregon's for the lowest in the country.

Tax on retirement income: Yes

State income tax: 0% to 4.797% (highest rate applies to incomes over $217,400)

Average property tax: 1.62% of home value

Average state and local sales tax: 7.17%

The Buckeye State does not tax Social Security benefits, although income from most other retirement accounts is taxed as regular income.

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Seniors aged 65 or older can claim a retirement income credit of up to $200 per year on sources of income other than their Social Security, as well as a senior citizen tax credit of $50.

Ohios property taxes are the ninth-highest in the country, but seniors who earn less than a certain amount ($33,600 during the 2020 tax year) may qualify for the homestead exemption, which exempts up to $25,000 of their homes market value fromlocal property taxes.

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Tax on retirement income: Yes

State income tax: 2% to 5.75% (highest rate applies to incomes over $250,000)

Average property tax: 1.04% of home value

Average state and local sales tax: 6.00%

Although Maryland is known as the Free State, dont expect much in the way of freebies if youre planning to retire there. While Social Security benefits are not subject to state income tax, most other forms of retirement income are.

On the bright side, residents 65 or older may qualify for an exclusion of up to $31,100 on distributions from 401(k), 403(b), and 457 plans and income from public and private pensions.

In addition to a state income tax of 2% to 5.75%, Marylands 23 counties and Baltimore City also levy local income taxes ranging between 2.5% and 3.2% of residents taxable income.

Property taxes in Maryland also are fairly high, with the owner of a $350,000 home paying around $3,640 a year. Maryland also is the only state in the country to charge both an estate tax and an inheritance tax: Estates are taxed, and so are the heirs who receive a deceased persons assets.

Tax on retirement income: Yes

State income tax: 5.80% to 7.15% (highest rate applying to incomes over $52,600)

Average property tax: 1.27% of home value

Average state and local sales tax: 5.50%

Retiring in the Pine Tree State is not all bad: Maine doesnt tax Social Security benefits, and retirees can deduct up to $10,000 of eligible pension income.

However, all other forms of retirement income are subject to state income tax rates as high as 7.15%, with the highest rate applying to anyone with an income of more than $52,600.

Maines property taxes are also pricey, plus Maine charges an estate tax ranging from 8% to 12% on estates valued above $5.7 million. Fortunately, the sales tax in the state is lower than average, and Maine does not allow cities or towns to impose any local sales tax.

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Tax on retirement income: Yes

State income tax: 1% to 13.30% (highest rate applies to incomes over $1,000,000)

Average property tax: 0.74% of home value

Average state and local sales tax: 8.66%

Lets start with some good news: If youre planning to retire in the Golden State, your Social Security benefits are exempt from state income taxes.

Unfortunately, all of your other retirement income is fully taxable, and at the highest tax rate in the country if you earn more than $1 million a year. (If thats the case, well done.)

Another bright spot for retirees is that the average property tax rate in California is quite low; on a home worth $350,000 youll only pay around $2,590. However, its worth noting that California has the highest state sales tax in the country at 7.25%, and the cost of living is 18% higher than the national average.

If you need a bit of help navigating California's complex tax rules, work online with a certified financial planner who can tailor you a tax-light retirement plan.

Tax on retirement income: Yes, but deductible up to $20,000

State income tax: 4% to 8.82% (highest rate applies to incomes over $1,077,550)

Average property tax: 1.40% of home value

Average state and local sales tax: 8.52%

Social Security benefits and military pensions are exempt from state taxes in New York. But the Empire State has the 14th highest property tax rate in the country, with the average taxes on a $350,000 house costing around $4,900.

The good news is that tax breaks are available for seniors at the local level. Local governments and school districts have the option to reduce the assessed value of a seniors home by up to 50%, depending on the seniors income.

Some seniors may also qualify for a School Tax Relief (STAR) exemption, in which the first $66,800 of their home value is exempt from school property taxes. In order to be eligible, youll need to be at least 65 years of age and have had an annual household income below a certain threshold ($86,300 or less during the 2019-2020 school year).

In addition to property taxes, retired New Yorkers also have to consider the combined state and local sales tax, which is the 10th highest in the country, as well as an estate tax of 3.06% to 16% on estates worth $5.9 million or more.

Tax on retirement income: No

State income tax: 4.95% flat rate

Average property tax: 2.05% of home value

Average state and local sales tax: 9.08%

Retirees planning to settle down in the Land of Lincoln had better start saving their pennies (or start taking photos of their grocery receipts), because Illinois has the second-highest average property tax rate in the country.

An owner of a $350,000 house pays roughly $7,175 a year in property taxes, although some seniors in Illinois may qualify for a homestead exemption of up to $8,000, depending on which part of the state they live in.

Aside from the high property taxes, Illinois residents are also subject to the sixth-highest combined state and local sales tax in the U.S., as well as an estate tax ranging from 0.8% to 16% on estates above $4 million.

On the bright side, the states flat 4.95% income tax rate is quite low, and income from most retirement plans including Social Security benefits is exempt from state taxes.

Tax on retirement income: Yes, but minimal below $60,000

State income tax: 1.40% to 10.75% (highest rate applies to incomes over $5 million)

Average property tax: 2.21%

Average state and local sales tax: 6.60%

For retirees in the Garden State, property taxes are the biggest weed in the flower bed. New Jersey has the highest average property tax rate in the country: The owner of a $350,000 home has to shell out around $7,735 each year.

New Jersey provides some relief for retirees through its Senior Freeze program, which reimburses eligible seniors for property tax increases. Additionally, senior citizens with an annual household income of $10,000 or less qualify for a property tax deduction of $250.

Most Americans can cushion the blow from high property taxes by cutting costs on their home insurance many people overpay by $1,100.

Social Security benefits are not taxed in New Jersey, but while the state eliminated its estate tax in 2018, it still charges an inheritance tax of 11% to 16% on inherited property worth $500 or more.

Tax on retirement income: Yes

State income tax: 3.75% to 5.99% (highest rate applies to incomes over $148,350)

Average property tax: 1.53% of home value

Average state and local sales tax: 7.00%

Rhode Island may offer scenic views of the Atlantic, but you can expect to be hit with a tidal wave of taxation if you decide to retire in the Ocean State. All retirement income is fully taxable, including Social Security benefits, as long as it is also taxed federally.

However, residents earning a certain amount or less ($85,150 for individuals and $106,400 for joint filers in 2019) are exempt from paying state tax on their Social Security benefits.

Property taxes in Rhode Island are the 10th highest in the country, although homeowners 65 or older whose income is $30,000 or less are eligible for a state tax credit. And if you're still carrying a mortgage, you could be due for a money-saving refinance.

Rhode Island also has an estate tax ranging from 0.8% to 16% on estates worth more than $1.6 million, making it one of only a few states that tax estates valued at under $2 million.

Tax on retirement income: Yes

State income tax: 3.35% to 8.75% (highest rate applies to incomes over $204,000)

Average property tax: 1.80% of home value

Average state and local sales tax: 6.22%

If you retire in Vermont, the government will tap your income just like one of the states maple trees. The Green Mountain State taxes all forms of retirement income at rates between 3.35% and 8.75%, and that includes Social Security benefits.

However, individuals who earn an adjusted gross income of $45,000 or less, and joint-filing couples who earn $60,000 or less, are eligible for full exemptions from state Social Security tax.

Vermont also charges a flat 16% estate tax on any estate that exceeds $2.8 million in value. And, property taxes are quite pricey, with the average tax on a $350,000 house coming to around $6,300.

Fortunately, some retired homeowners may qualify for Vermonts Elderly and Permanently Disabled Tax Credit, which is worth 24% of the federal credit for elderly and permanently disabled individuals.

Tax on retirement income: Yes

State income tax: 5.35% to 9.85% (highest rate applies to incomes over $164,401)

Average property tax: 1.44%

Average state and local sales tax: 7.46%

Minnesota taxes all forms of retirement income including Social Security benefits with the exception of military pensions.

However, thanks to the North Star States progressive tax system, households earning less than $23,900 are exempt from paying state taxes on their Social Security benefits. The state also offers a special income tax deduction for seniors who make $61,080 or less, or $78,180 or less for couples who file jointly.

Property taxes in Minnesota are the 13th highest in the country, with owners of a $350,000 home paying around $5,040 a year.

The state's residents also are subject to an estate tax of 13% to 16% on estates valued at more than $3 million, although assets left to a surviving spouse are exempt.

Tax on retirement benefits: Yes

State income tax: 4% to 7.65% (highest rate applies to incomes over $263,480)

Average property tax: 1.73% of home value

Average state and local sales tax: 5.46%

Although all Social Security benefits and income from government pensions are exempt from state taxes in Wisconsin, any other retirement income is fully taxable at rates ranging from 3.86% to 7.65%.

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