Florida's biggest rival for the snowbird crowd. Dry desert climate, lower humidity than the Southeast, a flat 2.5% income tax, and Social Security fully exempt.
| State income tax | Flat 2.5% |
| Social Security | Fully exempt |
| Pensions & 401k/IRA | Most pensions taxed; first $2,500 of federal/state/local pension income exempt |
| Avg combined sales tax | 8.40% |
| Estate / inheritance tax | None |
Effective property tax: 0.51% (ranked #12 of 50 states).
Senior property tax freeze available age 65+ with income under ~$45K (varies by county)
Cost of living index: 102.5 where the US average is 100 — about 3% above the national average.
Hot dry summers (100°F+ in Phoenix), mild winters. Flagstaff and Prescott offer cooler mountain climates year-round.
Excellent — Mayo Clinic Scottsdale, Banner Health, HonorHealth. Tucson has top geriatric care.
Scottsdale, Tucson, Prescott
No, Arizona does not tax Social Security retirement benefits.
Flat 2.5%. Flat 2.5% on most retirement income; Social Security fully exempt.
Arizona's cost of living index is 102.5 where the US average is 100. Effective property tax averages 0.51% and combined sales tax averages 8.40%.
Popular retirement spots in Arizona include Scottsdale, Tucson, Prescott.
Enter your retirement income and estimate what you'd actually pay in Arizona in 30 seconds.
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Tax data current as of 2026 publication. Rates and rules change annually — verify with a CPA before relocating. This page is educational and not personalized tax or legal advice.