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.
The northeastern retirement haven for snowbirds who can't quite leave the seasons. No wage income tax, no sales tax, and pristine outdoor lifestyle.
| Progressive, top 5% | Income tax | No state income tax |
| Exempt | Social Security | Exempt |
| Defined-benefit pensions + SS exempt; partial exemption for IRA/401k at 65+ | Pension treatment | All retirement income state-tax-free (since 2025) |
| 0.40% | Property tax (effective) | 1.93% |
| 9.29% | Avg combined sales tax | 0.00% |
| 88.1 | Cost of living (US=100) | 109.7 |
| None | Estate / inheritance tax | None |
| Hot humid summers, mild winters. Gulf Coast (Mobile, Gulf Shores) has Florida-like climate. | Climate | Four full seasons including snowy winters. Mild summers (70–80°F), cold winters (often below 20°F). |
| Mixed — strong in Birmingham (UAB), weaker in many smaller cities. Best to retire near a major medical center. | Healthcare | Excellent — Dartmouth-Hitchcock Medical Center is one of the top academic systems in the country. |
| Fairhope, Huntsville, Auburn | Top retirement cities | Portsmouth, Hanover, Wolfeboro |
Homestead exemption + age 65+ full state property tax exemption on principal residence
Property tax exemption for elderly (varies sharply by town) with age 65/75/80 tiers
Alabama: Cheapest of the major southern retirement states. Social Security, government pensions, and most defined-benefit pensions fully exempt — plus rock-bottom property taxes. New Hampshire: The northeastern retirement haven for snowbirds who can't quite leave the seasons. No wage income tax, no sales tax, and pristine outdoor lifestyle. 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, New Hampshire does not tax Social Security retirement benefits.
Alabama's cost of living index is 88.1 (US = 100). New Hampshire's is 109.7. Alabama is cheaper on average.
Enter your retirement income and see the after-tax difference between Alabama and New Hampshire 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.