There is a version of the Florida tax pitch that gets delivered to retirees as if they were still drawing salaries: your state takes X% of your income; Florida takes nothing; multiply and rejoice.
For some retirees that math is exactly right. For others it is wildly wrong — because a surprising number of high-tax states have quietly carved retirement income out of their tax base, and a retiree living on Social Security, pensions, and IRA distributions may already be paying their fearsome-sounding state almost nothing. An Illinois retiree reading the exodus coverage could be forgiven for not knowing that Illinois — flat 4.95% on workers — taxes zero of their pension, zero of their 401(k) withdrawals, and zero of their Social Security.
This post is the honest version of the retiree’s math: which states have already given you the income-tax savings, which ones genuinely punish retirement income, and why the Florida case for retirees usually rests on different ground than the one for earners — ground that is often stronger, not weaker.
The Spectrum: Which Kind of State Are You Leaving?
Federal law spares every retiree one fight: states cannot tax Social Security beyond what the federal government includes, and most exempt it entirely. The real variation is in pensions, 401(k)s, and IRAs — and it sorts the states in this blog’s coverage into three rough bands.
The already-generous. Illinois exempts essentially all federally qualified retirement income — pensions, 401(k) and IRA distributions, Social Security — despite its 4.95% rate on everyone else. Pennsylvania does the same for retirement-age taxpayers, on top of an already-low 3.07% rate. Michigan has been phasing its retirement exemption back in, with most retirement income broadly exempt by 2026. A retiree leaving these states for Florida saves little or no income tax — and should know that before signing anything.
The partially-generous. New York exempts Social Security and government pensions entirely, and excludes the first $20,000 per person of private pension and IRA income — meaningful for modest retirements, a rounding error for large ones; a New York couple drawing $400,000 from IRAs still sends Albany a five-figure check every year. New Jersey offers a substantial pension exclusion, but with an income cliff: exceed the threshold and the exclusion collapses. Connecticut exempts Social Security and phases relief for pension and IRA income by income level — the comfortable are covered, the wealthy are not.
The full-freight states. Minnesota taxes most retirement income — including, for higher earners, a portion of Social Security, a distinction almost no other state still claims — at rates up to 9.85%. California taxes pensions and retirement-account distributions as ordinary income at rates that reach 13.3%, sparing only Social Security. A wealthy retiree leaving St. Paul or Palm Springs gets the full advertised savings, every year, on every distribution — including the large RMDs that begin in their seventies whether wanted or not.
So the first exercise is brutally simple: project your actual retirement income sources against your actual state’s actual rules. The answer ranges from “Florida saves us nothing on income” to “Florida saves us $40,000 a year,” and both answers are common.
The Parts of the Case That Don’t Care About Your Income
Here is the part the salary-math pitch misses: for retirees, the income tax is frequently the smallest item on the ledger. Three others routinely outweigh it.
Death taxes. The income-tax-generous states are, with suspicious frequency, death-tax states. Illinois exempts your pension and then taxes your estate above $4 million. Pennsylvania exempts your IRA distributions and then takes 4.5% of everything you leave the kids, from dollar one. Minnesota taxes you coming and going — income at 9.85%, estate above $3 million. New York, Connecticut, Massachusetts: estate taxes all. Florida has none of it — no estate tax, no inheritance tax, constitutionally barred from creating one. For a retiree with a meaningful estate, this single category can dwarf a lifetime of income-tax savings, and it is precisely the category the already-generous states never mention.
The one-time events. Retirement years are full of single large recognitions — the sale of the business, the downsizing of the long-appreciated house, the concentrated stock finally diversified, a Roth conversion ladder. Each is ordinary or capital income in the year it happens, fully taxable by your state of residence at recognition, regardless of how it treats pensions. The sequencing logic applies to retirees in full: the move that precedes the event is worth a percentage of the event.
Asset protection and the homestead. Florida’s homestead protections — creditor protection of the primary residence, the Save Our Homes assessment cap — are worth real money over a long retirement, independent of every income assumption.
Run all four columns — income, estate, events, protections — and the retiree’s Florida case is usually stronger than the earner’s, just differently shaped. It is also, not incidentally, the version your heirs care about.
The Catch: Retiree Moves Get the Same Audit
One thing retirement does not change: the state you leave applies the same residency machinery to you as to any founder dodging a liquidity event — domicile factors, the 183-day statutory test where it exists, and an examination that arrives years later, possibly addressed to your executor in the inheritance-tax states.
If anything, the retiree fact pattern needs more care, because retirement is when the calendar gets soft. No office anchors the week; the year flows between the Florida place, the old house no one can bear to sell, the grandchildren, the summer somewhere temperate. It is the perfect recipe for a count that drifts over 183 in the old state without anyone deciding anything — the summer failure mode, retired edition, repeated annually for decades. The defenses are unchanged: a genuine center of life in Florida, the checklist done, the day count won with margin and documented, every year, indefinitely.
Where Southbound Fits
“Every year, indefinitely” is the retiree’s specific burden — not one audit-proof year but twenty of them, kept without an assistant, a travel department, or any appetite for spreadsheets.
Southbound is an iOS app that carries that burden passively. iOS’s significant-location-change system — not battery-draining GPS — records each day as a Florida day or a non-Florida day automatically, year after year, with location evidence behind every entry. The Departure Budget turns each year’s count into one glanceable number: how many more days you can spend up north and still clear 183. Everything stays in your own iCloud account — Southbound runs no servers and never sees your location history — and exports as a CSV for your accountant, your attorney, or eventually your estate.
Southbound is on the App Store, free during the early-adopter launch period. Whatever your state already doesn’t tax, the day count is still the foundation everything else stands on — and it is the one part of retirement that should run itself.
This post is for general informational purposes only and does not constitute tax or legal advice. State treatment of retirement income, estate taxes, and exemption thresholds vary and change frequently. Work with a qualified tax attorney and CPA for advice specific to your situation.
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Southbound
Published Jul 27, 2026