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Teacher retirement by state: the 2026 rankings

Where a teacher retires changes the value of the same career by tens of thousands of dollars — through pension tax, through whether Social Security is part of the picture at all, and through what the state took out of every paycheque along the way. All 50 states, ranked on each, from our open dataset.

On this page
  1. States that do not tax teacher pension income — 20 of them
  2. Where a pension is taxed hardest
  3. Teachers without Social Security — 14 states
  4. What teachers pay in
  5. Average teacher salary, top and bottom

1. States that do not tax teacher pension income

20 states take nothing from a teacher’s pension. Two different routes get there: some levy no income tax at all, others levy one but exempt public pension income specifically — and the second group is the one people miss when they assume a state with income tax must tax their pension.

#StateState income taxPension exemptAvg. salary
1 Alabama Yes Yes $62,985
2 Alaska None — $81,450
3 Florida None — $56,663
4 Hawaii Yes Yes $75,860
5 Illinois Yes Yes $78,495
6 Iowa Yes Yes $65,312
7 Kansas Yes Yes $61,470
8 Louisiana Yes Yes $56,785
9 Massachusetts Yes Yes $93,554
10 Mississippi Yes Yes $54,975
11 Nevada None — $74,812
12 New Hampshire None — $69,432
13 New Jersey⚠ 0% only if age 62+ AND total household income ≤ $150,000 — a hard cutoff: $1 over and the whole exclusion is lost. Yes Yes $84,974
14 New York Yes Yes $98,655
15 Pennsylvania Yes Yes $79,078
16 South Dakota None — $58,486
17 Tennessee None — $61,222
18 Texas None — $63,749
19 Washington None — $96,589
20 Wyoming None — $65,668

A 0% pension rate does not mean a 0% tax bill: other income — 403(b) withdrawals in some states, part-time work, investment income — can still be taxable.

2. Where a pension is taxed hardest

These are effective rates on pension income at a realistic teacher retirement income, not top marginal rates. The difference matters: on a $45,000 pension, the gap between the top of this list and any state in section 1 is $3,645 a year, every year, for the rest of your retirement.

#StatePension tax rateOn $45,000/yrOver 20 years
1 Oregon 8.10% $3,645 $72,900
2 Idaho⚠ PERSI is generally taxable; the retirement-benefits deduction is narrow (age 65+, or 62+ and disabled, specific plans). 5.30% $2,385 $47,700
3 Minnesota 5.00% $2,250 $45,000
4 Virginia⚠ The $12,000 age-65 deduction phases out $1-for-$1 above $50,000 AGI (single), gone by ~$62,000; this rate assumes it is fully phased out. 4.80% $2,160 $43,200
5 California 4.50% $2,025 $40,500
6 South Carolina⚠ $10,000 retirement-income deduction plus a $15,000 age-65 deduction (offset by the retirement deduction). 4.50% $2,025 $40,500
7 Utah⚠ A retirement tax credit (max $450) phases out by income and is largely gone at $80k. 4.45% $2,002 $40,050
8 Nebraska 4.40% $1,980 $39,600
9 Wisconsin 4.40% $1,980 $39,600
10 Montana⚠ $5,500 age-65 retirement subtraction; no special break for in-state public pensions. 4.10% $1,845 $36,900
11 Vermont 4.10% $1,845 $36,900
12 North Carolina 3.99% $1,796 $35,910
Moving is not the only lever, but it is the biggest single one available after you stop working. Compare your own pension across states →

3. Teachers without Social Security

In 14 states, most public school teachers are not covered by Social Security for their teaching work. No coverage means no Social Security cheque from those years — the pension is not a supplement to retirement income, it is the whole thing. Anyone planning a career in these states is planning on one leg of the stool, and the 403(b) has to do the work the missing leg would have done.

#StateCoveragePension formulaTeacher pays in
1 Alaska Generally NOT covered DC plan (no DB) — Tier IV 8% of salary
2 California Generally NOT covered FAS × 2% × years (PEPRA tier) 10.205% of salary
3 Colorado Generally NOT covered HAS × 2.5% × years 11% of salary
4 Georgia Generally NOT covered AFC × 2% × years 6% of salary
5 Illinois Generally NOT covered FAS × 2.2% × years (Tier 2) 9.0% of salary
6 Kentucky Generally NOT covered FAS × 1.7–3.0% × years 12.855% of salary
7 Louisiana Generally NOT covered AFC × 2.5% × years 8% of salary
8 Maine Generally NOT covered AFC × 2% × years 7.65% of salary
9 Massachusetts Generally NOT covered FAS × 2.0–2.5% × years 11% of salary
10 Missouri Generally NOT covered FAS × 2.5% × years 14.5% of salary
11 Nevada Generally NOT covered AMC × 2.5% × years (2.25% if enrolled on/after 7/1/2015; 2.67% for service after 7/1/2001) 0% deducted (employer pays 36.75%)
12 Ohio Generally NOT covered FAS × 2.2% × years (Tier 1) 14% of salary
13 Rhode Island Partial — varies by district (~half not covered) FAS × 1% × years (DB) + DC plan 3.75% of salary
14 Texas Generally NOT covered Avg of 5 highest salaries × 2.3% × years 8.25% of salary

Coverage can vary by district within a state, and teachers who worked other covered jobs may still qualify on those earnings. Check your own record before assuming either way.

4. What teachers pay in

The employee contribution is the part of the deal nobody quotes when they call a pension “free money”. A teacher paying 14.50% of salary for thirty years has funded a substantial share of their own benefit. Read this table next to section 3: a high contribution rate and no Social Security is a very different bargain from a high contribution rate alongside it.

#StateContributionSocial SecurityAvg. salary
1 Missouri 14.50% Not covered $57,366
2 Ohio 14.00% Not covered $70,586
3 Kentucky 12.86% Not covered $60,594
4 North Dakota 11.75% Covered $60,704
5 Colorado 11.00% Not covered $72,781
6 Massachusetts 11.00% Not covered $93,554
7 New Mexico 10.70% Covered $69,736
8 California 10.21% Not covered $103,552
9 Illinois 9.00% Not covered $78,495
10 Mississippi 9.00% Covered $54,975
11 South Carolina 9.00% Covered $64,050
12 Wyoming 8.75% Covered $65,668

5. Average teacher salary, top and bottom

Salary drives the pension twice over: it sets the contributions going in and the final average salary the benefit formula multiplies at the end. A $48,577 gap between the highest and lowest state is not a pay gap alone — it compounds into a pension gap that lasts the whole of retirement.

#HighestAvg. salaryLowestAvg. salary
1 California $103,552 Mississippi $54,975
2 New York $98,655 Florida $56,663
3 Washington $96,589 Louisiana $56,785
4 Massachusetts $93,554 Missouri $57,366
5 Connecticut $89,593 West Virginia $58,099
6 Maryland $87,409 South Dakota $58,486
7 Rhode Island $85,772 Arkansas $59,193
8 New Jersey $84,974 Montana $59,305
9 Oregon $81,657 Vermont $59,800
10 Alaska $81,450 North Carolina $60,323

Salaries are state averages across all experience levels and lag published sources by roughly a year. They are not what a first-year teacher earns, and not what a retiring teacher’s final average salary will be.

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Educational estimates only, not tax advice. Rates are reviewed each year and corrected against primary sources; see Methodology for how each figure is derived. Last built 2026-09-02.