Florida is a popular state to retire in due to the lack of income taxes.  However, there is more to a great place to retire than the lack of income tax. In fact, some cities are great to retire in because of their income tax, but their discounts in other areas.

Before settling down anywhere for retirement think of the states exemptions on social security benefits, pensions, and other retirement income breaks.

Here are a few of the most tax-friendly states for retirees:

Alaska

State Income Tax: none
State Sales Tax: none
Inheritance Tax: No

Michigan

State Income Tax: 4.35%
State Sales Tax: 6%
Inheritance Tax: No

Pennsylvania

State Income Tax: 3.07%
State Sales Tax: 6% (localities can tack on an extra 2%)
Inheritance Tax: Yes

Colorado

State Income Tax: 4.63%
State Sales Tax: 2.9% (localities can add their own)
Inheritance Tax: No

Hawaii

State Income Tax: 1.4% – 11%
State Sales Tax: 4% (localities can add their own)
Inheritance Tax: No

South Carolina

State Income Tax: 3% – 7%
State Sales Tax: 6%
Inheritance Tax: No