2026 Retirement Analysis Flags 5 Tax-Friendly States for Federal Workers as Healthcare Gaps Complicate Savings
Updated
Updated · FEDweek · Jul 30
2026 Retirement Analysis Flags 5 Tax-Friendly States for Federal Workers as Healthcare Gaps Complicate Savings
2 articles · Updated · FEDweek · Jul 30
Summary
A 2026 retirement analysis for federal employees says tax-friendly states can stretch FERS, TSP and Social Security income, but the best choices balance taxes with living costs, medical access and family proximity.
Florida and Nevada levy no state income tax, while Georgia and Mississippi offer broad retirement-income breaks; moving from California could avoid roughly 8% to 9% in state income taxes.
Federal taxes still apply regardless of where retirees move: FERS pensions, traditional TSP withdrawals and part of Social Security remain subject to IRS taxation.
New Hampshire and South Carolina stood out for pairing favorable tax treatment with stronger primary-care access—78.87% and 78.54% of need met—while Tennessee and North Carolina were cited as solid alternatives.
Florida, Nevada, South Dakota, Alaska and Wyoming were flagged for weaker healthcare access in some areas, underscoring that zero state income tax can be offset by higher costs or long drives for care.