The federal government has two retirement programs. One is the Civil Service Retirement System; the other is the Federal Employees Retirement System. If you are a retired federal employee, you likely receive an annuity from one of these programs for years of service. As a retiree, you would like to make your money last through your retirement years. One of the ways to accomplish this is to check state taxes before you relocate for retirement.
States With No Income Taxes
As of 2011, nine states have no income taxes. These states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Your federal retirement annuity is not subject to income taxes in these states. However, other taxes may surprise you. Sales taxes are often high in states with no income tax, but Alaska has no sales tax or income tax. Sales tax in Texas, for example, is 6.25 for the state, but local governments may add 2 percent.