Side-by-side for American retirees in 2026.
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.
Big, varied, and tax-friendly. No state income tax, lower cost of living than Florida, and three distinct retirement regions (Hill Country, Gulf Coast, North Texas).
| Flat 2.5% | Income tax | No state income tax |
| Exempt | Social Security | Exempt |
| Flat 2.5% on most retirement income; Social Security fully exempt | Pension treatment | All retirement income state-tax-free |
| 0.51% | Property tax (effective) | 1.63% |
| 8.40% | Avg combined sales tax | 8.20% |
| 102.5 | Cost of living (US=100) | 92.6 |
| None | Estate / inheritance tax | None |
| Hot dry summers (100°F+ in Phoenix), mild winters. Flagstaff and Prescott offer cooler mountain climates year-round. | Climate | Highly varied. Hot humid summers statewide. Hill Country mild winters; Panhandle has snow; Gulf Coast similar to Florida. |
| Excellent — Mayo Clinic Scottsdale, Banner Health, HonorHealth. Tucson has top geriatric care. | Healthcare | Strong in major metros — MD Anderson Cancer Center (Houston), Houston Medical Center, Dallas-area systems. Rural Texas healthcare is weaker. |
| Scottsdale, Tucson, Prescott | Top retirement cities | Fredericksburg, San Antonio, Georgetown |
Senior property tax freeze available age 65+ with income under ~$45K (varies by county)
$100K homestead exemption (2023) + senior 65+ school tax freeze + additional $10K senior exemption
Arizona: 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. Texas: Big, varied, and tax-friendly. No state income tax, lower cost of living than Florida, and three distinct retirement regions (Hill Country, Gulf Coast, North Texas). The right choice depends on your income mix, climate preference, and whether state income tax matters more to you than property tax.
No, Arizona does not tax Social Security retirement benefits.
No, Texas does not tax Social Security retirement benefits.
Arizona's cost of living index is 102.5 (US = 100). Texas's is 92.6. Texas is cheaper on average.
Enter your retirement income and see the after-tax difference between Arizona and Texas 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.