You pay Social Security taxes all your working life, but for some people, the taxes don't stop once they sign up for monthly checks. Certain states take a slice of certain retirees' benefits, forcing them to rely more upon their personal savings to cover their expenses. 

Fortunately, there are 37 states that leave Social Security benefits alone. Consider retiring in one of these places if you'd like to hold onto as much of your Social Security benefit as possible.

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These 37 states don't tax your Social Security benefits

The following 37 states don't tax anyone's Social Security benefits:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Mississippi
  • Nevada
  • New Hampshire
  • New Jersey
  • New York
  • North Carolina
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Virginia
  • Washington
  • Wisconsin
  • Wyoming

What can you do if you live in one of the 13 states that tax Social Security benefits?

Just because your state taxes some recipients' Social Security benefits doesn't mean it's going to tax yours. Most states have laws in place dictating when the government may tax benefits, and usually only high-income beneficiaries owe something. For example, in Connecticut, only single individuals with an adjusted gross income (AGI) of $75,000 or more and married couples with an AGI of $100,000 or more owe any taxes on their Social Security benefits.

Other states, like Colorado, decide who owes taxes based on the amount of money each person receives annually from Social Security, rather than on their AGI. But the general idea is the same. Those with larger incomes and bigger Social Security checks are more likely to owe taxes than those with lower incomes and smaller checks.

Contact your state department of taxation if you're unsure if you could face Social Security benefit taxes in retirement. Arming yourself with this knowledge could help you avoid them. For example, a single Connecticut resident nearing the $75,000 AGI threshold could opt to withdraw more money from a Roth retirement account to avoid pushing their AGI above the threshold for Social Security benefit taxation.

This isn't always possible, but understanding how your state taxes benefits is still useful. If you're unable to avoid them, you can at least be prepared.

Do I have to worry about federal taxes?

The federal government also taxes Social Security benefits, but like many of the state governments that do so, it has rules in place to exempt some people from them. The federal government looks at your provisional income, which is your AGI plus any nontaxable interest plus half of the Social Security benefits you earn during the year.

Individuals with a provisional income of $25,000 or more and married couples with a provisional income of $32,000 or more could owe taxes on up to 50% of their Social Security benefits. Single adults with provisional incomes of $34,000 or more and married couples with provisional incomes of $44,000 or more could owe taxes on up to 85% of their benefits. Here's an in-depth guide to Social Security benefit taxes if you're interested in learning more about how this works.

Similar to state taxes, you may be able to avoid federal Social Security benefit taxes by monitoring your annual spending and limiting how much money you withdraw from tax-deferred retirement accounts. But it's not always possible, and in that case, the next-best thing you can do is prepare yourself for a higher tax bill.

The rules surrounding benefit taxation could change between now and when you retire, so stay abreast of any new laws or law changes related to Social Security benefit taxes. As you near retirement, determine whether you'll owe taxes, and ensure you have enough savings to cover these, as well as your other retirement expenses.