The short version
- Social Security taxed?
- No
- Income tax
- Flat 2.5%
- Property tax on a $300,000 home
- ≈ $1,440 / yr ($120 / mo)
- Everyday cost index (U.S. = 100)
- 111
- January / July high
- 67°F / 106°F
- Sales tax (state + local avg)
- 8.54%
Retiring in Arizona
Sunshine, a low flat tax, and low property taxes made it a retiree magnet. Watch out: brutal desert summers and fast-rising home prices.
How Arizona taxes your retirement income
Social Security: not taxed at all.
Pensions: Taxed as regular income; small exclusion for Arizona public pensions.
401(k) and IRA withdrawals: 401(k)/IRA withdrawals taxed as regular income.
The setup: Flat 2.5%.
Property tax & senior breaks
The average effective property tax rate is about 0.48% — roughly $1,440 a year ($120 a month) on a $300,000 home. Your county sets the real number.
Help for seniors: Low-income homeowners 65+ can freeze their home's valuation (Proposition 108).
Try your own home value in the Property Tax Estimator.
Everyday costs & sales tax
Overall cost of living runs about 11% above the U.S. average. The combined state and average local sales tax is 8.54%.
Weather
January days top out around 67°F and July days around 106°F, with roughly 296 sunny days a year. Watch out for: Extreme summer heat in the desert; wildfire risk in the high country.
Healthcare
Excellent care in Phoenix and Tucson, including Mayo Clinic in Scottsdale; rural gaps.