The government has periodically repeated that Social Security retirement benefits—despite their usefulness as a tool to help elderly Americans retire in comfort—are not intended as a substitute for regular savings, but a supplement. The payments are intended to replace roughly 40 percent of a person’s pre-retirement earnings; as most people cannot survive on a sixty percent pay cut, another source of cash, usually savings from a person’s career, is highly recommended.

Some people, however, do not have the luxury of saving during their lives. Around half of working Americans today are living paycheck to paycheck, meaning that they are likely to end up with Social Security and little else upon retirement. For those people, there are a few ways to make Social Security benefits go further. One of these ways, albeit a fairly extreme one, is to move to a state that does not tax Social Security.

Fortunately, there are a lot of these states (thirty-seven, to be exact, plus the District of Columbia). Nine of them—Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming—do not have any state income tax at all, another way to save money—although less useful after a person has retired, and therefore is not receiving further income in any case.

The remaining states that exclude Social Security payments from taxation are Alabama, Arizona, Arkansas, California, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Virginia, and Wisconsin. Additionally, Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Rhode Island, and Vermont offer some form of tax offset for Social Security payments based on age or financial status, although they continue to tax them in principle.

West Virginia, one of the states that tax benefits, has begun to eliminate these taxes; this process will probably be complete by 2022. Until then, however, West Virginians are obliged to pay taxes on 35 percent of their Social Security benefits—down from 65 percent in 2020.

Finally, Utah, which formerly taxed Social Security the same way that the government does, recently changed its system. Prior to the switch, Utah taxed half of each retiree’s Social Security benefits; under the new rules, the state government issues a credit to families making below a certain income threshold per year, set at $30,000 for individuals and $50,000 for couples.

Trevor Filseth is a current and foreign affairs writer for the National Interest.

Image: Reuters