Colorado
#15
Of 15 curated destinations
Sample SS untaxed at 65+; other retirement income may be taxed
- Social Security
- Not taxed (state)
- Withdrawal
- Partial / exclusion
- Property estimate
- $2,000
- State income tax on sample
- May apply
Washington ranks #6 against #15 for Colorado among 15 curated destinations. Same sample retiree in both: $30,000 of Social Security, a required withdrawal of about $30,189, and a $400,000 home.
By Sammy S. · Founder · AuthorUpdated for 2026
More retiree-friendly on tax
Better on the combination of Social Security treatment, retirement-income treatment, and estate or inheritance tax.
#15
Of 15 curated destinations
Sample SS untaxed at 65+; other retirement income may be taxed
#6
Of 15 curated destinations
Sample SS + RMD: $0 modeled state income tax
State rules first, then how they land on the sample retiree, then the levies that outlive income tax.
| Measure | Colorado | Washington |
|---|---|---|
| Social Security (state rule) | SS partially taxed | No state income tax |
| Social Security on the sample | Not taxed (state) | Not taxed (state) |
| Retirement income (state rule) | Partial retirement exclusions | No state income tax |
| Required withdrawal on the sample | Partial / exclusion | Not taxed (state) |
| Estate / inheritance tax | No state estate or inheritance tax | Estate tax (exemption ~$3.08M) |
| Property tax on a $400,000 home | $2,000 (0.5%) | $3,000 (0.75%) |
| Combined sales tax rate | 7.89% | 9.57% |
Social Security (state rule)
ColoradoSS partially taxed
WashingtonNo state income tax
Social Security on the sample
ColoradoNot taxed (state)
WashingtonNot taxed (state)
Retirement income (state rule)
ColoradoPartial retirement exclusions
WashingtonNo state income tax
Required withdrawal on the sample
ColoradoPartial / exclusion
WashingtonNot taxed (state)
Estate / inheritance tax
ColoradoNo state estate or inheritance tax
WashingtonEstate tax (exemption ~$3.08M)
Property tax on a $400,000 home
Colorado$2,000 (0.5%)
Washington$3,000 (0.75%)
Combined sales tax rate
Colorado7.89%
Washington9.57%
Colorado: Mountain lifestyle; age 65+ deducts SS fully — younger/higher-AGI filers may still owe.
Washington: No wage income tax; estate tax still applies.
Popular retirement moves often come down to how a state treats Social Security benefits and required withdrawals from a traditional IRA or 401(k). This page runs the same sample retiree — single, age 73, with Social Security and an IRS-required minimum distribution — through both states' rules.
Washington scores better on this destination list, by about 2.50 points on the underlying friendliness score.
Read the treatment ladder for the state-by-state rule, then the sample outcome, then estate and property context before comparing your own numbers.
Colorado — benefits: SS partially taxed. Sample required withdrawal: Partial / exclusion.
Washington — benefits: No state income tax. Sample required withdrawal: Not taxed (state).
These are two separate state decisions. A state can exempt Social Security entirely and still tax traditional IRA or 401(k) withdrawals as ordinary income — that combination is common among otherwise “retiree-friendly” states.
Modeled property tax on the same $400,000 home: $2,000 in Colorado vs $3,000 in Washington — about $1,000 apart.
Combined sales tax rates differ by 1.68 percentage points between the two states, which compounds over years of retirement spending.
Death taxes are a separate question from income tax — Colorado: No state estate or inheritance tax; Washington: Estate tax (exemption ~$3.08M). A state can look income-tax friendly and still tax an estate or inheritance.
Colorado's $0 figure on this vignette depends on the sample's exact age and balance — a larger IRA or younger retiree can change the outcome.
Washington's $0 figure on this vignette depends on the sample's exact age and balance — a larger IRA or younger retiree can change the outcome.
Rerun the required-withdrawal calculation with your own birth year and balance, then re-check each state's current retirement-income booklet before relocating.
Short definitions so the scoreboard numbers map to real retirement-tax rules.
Two separate rules: whether the state taxes Social Security benefits, and whether it taxes traditional IRA/401(k)/pension withdrawals. A state can treat them very differently.
The IRS-mandated annual withdrawal from a traditional IRA once you reach RMD age, computed from the Uniform Lifetime Table. This sample's RMD is about $30,189.
Estate tax is levied on the decedent's estate; inheritance tax is levied on certain heirs. A state can have one, both, or neither — separate from its income-tax treatment of retirees.
This site's structural score of Social Security, retirement-income, and estate/inheritance treatment. Lower score / lower rank number is more favorable on those axes — property and sales tax are shown as separate benchmarks.
"No state income tax on Social Security means the state taxes nothing."
Not necessarily. Colorado can still tax a traditional IRA/401(k) withdrawal even where Social Security itself is exempt.
"Washington is simply the better place to retire."
This ranking covers Social Security, retirement-income, and death-tax treatment on one fixed sample plus a property estimate. Housing, healthcare access, climate, and family proximity usually matter more to an actual move.
"An income-tax-friendly state has no death tax."
Not guaranteed. Colorado: No state estate or inheritance tax. Washington: Estate tax (exemption ~$3.08M). Death taxes are a separate legal regime from income tax.
"Federal tax on Social Security disappears if I move to a tax-friendly state."
Federal taxation of benefits depends on your combined income under IRS rules, not your state of residence. Moving states can eliminate the state-level tax while leaving the federal worksheet unchanged.
Before treating this destination comparison as a retirement decision.
Compare any two destinations
15 curated retirement destinations, ranked on benefit and withdrawal treatment.
Educational estimates for one fixed retiree, 2026 rules. Exclusion caps and thresholds change with legislation — confirm the current state booklet. Not tax advice.