Retirement

Cost of Living / Taxes

Mississippi offers a sweet income-tax deal for retirees. It not only exempts Social Security benefits from state income taxes but also excludes all qualified retirement income -- including pensions, annuities, and IRA and 401(k) distributions. Remaining income is taxed at a maximum 5%. In addition, Mississippi is home to some of the lowest property taxes in the nation. Residential property is taxed at 10% of assessed value, and seniors qualify for a homestead exemption on the first $75,000 of value. The statewide sales tax is 7%.  Locally, food and beverage taxes add 2% and lodging taxes add 2% as well.  Counties and cities may add up to 3% to the state rate, but prescription drugs and health care services are exempt. In 2011, Kiplinger ranked Mississippi as having the second lowest overall tax burden in the country.