Annuity Information by State
State taxes and regulations can significantly affect your annuity income. Explore the 10 most popular retirement states to understand how annuities work where you live — or where you plan to retire.
Florida
FL4.6 million residents age 65+
Florida is the #1 retirement destination in America, with no state income tax on annuity income. Over 4.6 million residents are age 65+, making it the largest market for life annuities in the country.
View Florida Details →Texas
TX3.7 million residents age 65+
Texas offers retirees no state income tax and a growing population of seniors. With 3.7 million residents over 65, it's one of the largest annuity markets in the US.
View Texas Details →California
CA5.8 million residents age 65+
California has the largest population of seniors in the US at 5.8 million aged 65+. While the state has higher taxes, annuities remain a popular choice for guaranteed retirement income.
View California Details →New York
NY3.2 million residents age 65+
New York is home to 3.2 million residents over 65. The state has some of the strictest annuity regulations in the country, which protects consumers but also means working with knowledgeable brokers is essential.
View New York Details →Pennsylvania
PA2.4 million residents age 65+
Pennsylvania is one of the most tax-friendly states for retirees. Annuity income is fully exempt from state income tax once you reach retirement age, making it an excellent state for life annuity buyers.
View Pennsylvania Details →Ohio
OH2.1 million residents age 65+
Ohio offers a retirement income credit and relatively low cost of living, making annuities an attractive option for the state's 2.1 million seniors looking for guaranteed income.
View Ohio Details →Illinois
IL2.0 million residents age 65+
Illinois does not tax retirement income including annuity distributions, making it a surprisingly favorable state for annuity buyers despite its reputation for high taxes.
View Illinois Details →North Carolina
NC1.8 million residents age 65+
North Carolina is an increasingly popular retirement destination with moderate taxes, a mild climate, and 1.8 million residents over 65 seeking guaranteed retirement income.
View North Carolina Details →Arizona
AZ1.3 million residents age 65+
Arizona's warm climate and flat tax rate make it a top retirement destination. With 1.3 million seniors and growing, the demand for guaranteed annuity income continues to rise.
View Arizona Details →Michigan
MI1.8 million residents age 65+
Michigan offers significant tax benefits for retirees, with many residents able to deduct substantial retirement income from state taxes. The state's 1.8 million seniors represent a strong annuity market.
View Michigan Details →Why Your State Matters for Annuity Income
The state you live in can make a meaningful difference in your after-tax annuity income. Here's what varies:
- State income tax: Nine states have no income tax at all. Others tax annuity income as ordinary income at rates from 2.5% to over 13%.
- Retirement income exclusions: Many states offer partial or full exclusions for retirement income, including annuity distributions.
- Consumer protections: State insurance departments regulate annuity sales differently. Some states (like New York) have best-interest standards that require agents to recommend what's best for you.
- Guaranty association coverage: Every state has an insurance guaranty association that protects annuity owners if a carrier fails. Coverage limits vary by state, typically $250,000 to $500,000.
For detailed federal tax information, see our annuity tax guide.
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