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Cost of Retiring in Arizona (AZ) 2026

Arizona has a 2.5% flat income tax rate and does not tax Social Security. Popular retirement destination with warm climate.

2.5%
Top Income Tax Rate
100.7
Cost of Living Index (Near average)
No
Taxes Social Security
$900
Est. State Tax on $60K Income

Tax on $60,000 Retirement Income

Gross annual income$60,000
Top state income tax rate2.5%
Estimated effective rate1.5%
Estimated annual state tax$900
Monthly tax impact$75
After-tax income$59,100

5 Cheapest Alternative States

StateRateEst. Tax on $60K
AlaskaNo tax$0
FloridaNo tax$0
NevadaNo tax$0
New HampshireNo tax$0
South DakotaNo tax$0

Moving from Arizona to Alaska could save ~$900/year in state income tax alone.

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Source: IRS Rev. Proc. 2025-32, BEA Regional Price Parities (2024 vintage), SSA 2026 bend points. Tax estimates use a 60% effective factor on the top marginal rate as a simplified model. Consult a tax professional for your specific situation. Not financial advice.

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