Side-by-side for American retirees in 2026.
Cheapest of the major southern retirement states. Social Security, government pensions, and most defined-benefit pensions fully exempt — plus rock-bottom property taxes.
One of the most generous states for retirees — up to $130K per couple of retirement income excluded from state tax. Mild climate, mountains, and Atlanta as a hub.
| Progressive, top 5% | Income tax | Flat 5.29% |
| Exempt | Social Security | Exempt |
| Defined-benefit pensions + SS exempt; partial exemption for IRA/401k at 65+ | Pension treatment | $65K/person retirement exclusion at 65+ — among the most generous in the US |
| 0.40% | Property tax (effective) | 0.81% |
| 9.29% | Avg combined sales tax | 7.40% |
| 88.1 | Cost of living (US=100) | 90.8 |
| None | Estate / inheritance tax | None |
| Hot humid summers, mild winters. Gulf Coast (Mobile, Gulf Shores) has Florida-like climate. | Climate | Hot humid summers, mild winters in southern half; cooler in northern mountains. Long growing season. |
| Mixed — strong in Birmingham (UAB), weaker in many smaller cities. Best to retire near a major medical center. | Healthcare | Strong — Emory Healthcare (Atlanta), Piedmont Healthcare. Solid coverage in mid-sized cities. |
| Fairhope, Huntsville, Auburn | Top retirement cities | Athens, Savannah, Blue Ridge |
Homestead exemption + age 65+ full state property tax exemption on principal residence
Standard $2,000 homestead + larger exemptions for 65+ in many counties; double for 65+ with income under ~$10K
Alabama: Cheapest of the major southern retirement states. Social Security, government pensions, and most defined-benefit pensions fully exempt — plus rock-bottom property taxes. Georgia: One of the most generous states for retirees — up to $130K per couple of retirement income excluded from state tax. Mild climate, mountains, and Atlanta as a hub. The right choice depends on your income mix, climate preference, and whether state income tax matters more to you than property tax.
No, Alabama does not tax Social Security retirement benefits.
No, Georgia does not tax Social Security retirement benefits.
Alabama's cost of living index is 88.1 (US = 100). Georgia's is 90.8. Alabama is cheaper on average.
Enter your retirement income and see the after-tax difference between Alabama and Georgia in 30 seconds.
Open tax estimator →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.