Study reveals most tax-friendly retirement spots in Alabama

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If you’re planning on spending your golden years in the Yellowhammer State, you may want to consider settling down in Tallassee, Wetumpka or Attalla.

A new study by financial technology company SmartAsset ranked the top 10 cities across Alabama and these three were deemed the top three best places in for those looking to avoid the pressure of the taxman.

For the most part, Alabama is fairly tax-friendly. The study highlights that retirees who own a home in Alabama benefit from some of the lowest property tax rates in the country. On the other hand, sales taxes in Alabama rank as the third highest in the U.S.

While that could hurt a senior’s budget, in general retirees in Alabama should have more money to spend as the cost of living in Alabama is about 10% lower than the national average and the state does not tax most types of retirement income.

In order to find the most tax-friendly spots to retire, the study compared a fixed income against an array of tax expenses, including income taxes, property taxes, and sales and fuel taxes, to calculate how much of that money would go to paying tax bills.

According to SmartAsset, the goal was “to find the areas with the most tax-friendly policies for retirees.”

“To do that,” the study says. “We looked at how the tax policies of each city would impact a retiree with a $50,000 income, with a hypothetical retiree getting $15,000 from Social Security benefits, $10,000 from a private pension, $15,000 from retirement savings like a 401(k) or IRA and $10,000 in wages.”

Here’s a look at how the top ten tax-friendly retirements spots in Alabama compare:

Rank City Income Tax Paid Property Tax Rate Sales Tax Paid Fuel Tax Paid Social Security Taxed? Retirement Tax Friendliness Index
1 Tallassee, AL $6,256 0.29% $766 $291 No 70
2 Wetumpka, AL $6,256 0.29% $880 $274 No 56.28
3 Attalla, AL $6,256 0.51% $766 $306 No 55.08
4 Greenville, AL $6,256 0.42% $842 $313 No 54.43
5 Harvest, AL $6,256 0.33% $842 $377 No 53.92
6 Roanoke, AL $6,256 0.39% $919 $304 No 53.46
7 Meridianville, AL $6,256 0.37% $842 $398 No 52.85
8 Boaz, AL $6,256 0.47% $995 $283 No 51.46
9 Fort Payne, AL $6,256 0.40% $995 $321 No 45
10 Guntersville, AL $6,256 0.38% $1,072 $277 No 51.15


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