Retiring in Louisiana: What the State Actually Takes

On the ordinary retirement profile — $34,000 of Social Security and $61,000 of plan distributions — Louisiana takes $1,084 a year in state income tax.

That is the number people compare, and it is the smallest of three. Property tax adds about $1,432 on the state's $260,300 median home, and insurance another $5,937. The three together come to $8,453, placing Louisiana 32nd of 50.

A note before you start. This is general education, not tax advice. Every Louisiana figure comes from this site's own fifty-state income-tax dataset and its retirement tax engine, computed for a single filer aged 70 unless stated otherwise; property tax, median home price and insurance figures come from the site's core state dataset. Rates are for tax year 2026. Property tax is assessed locally in most states, so the effective rate here is a statewide figure rather than your county's.

1. What Louisiana takes from retirement income

On Social Security. Fully exempt. Louisiana begins from federal adjusted gross income, so any federally taxable portion of benefits enters the Louisiana base and is then removed as exempt income under Schedule E code 07E: Social Security benefits that are taxed on the federal return are exempt from Louisiana tax, entered as the amount shown on federal Form 1040 or 1040-SR line 6b. No income threshold, no age condition, no phase-out.

On 401(k) and IRA distributions. The exclusion is per taxpayer, strictly age-gated at 65, and the amount doubled recently. Under La. R.S. 47:44.1, twelve thousand dollars of annual retirement income received by an individual sixty-five years of age or older is exempt from state income taxation. The figure was $6,000 and Act 11 doubled it to $12,000, so any source quoting $6,000 is describing superseded law. On a joint return it is $12,000 each, not per return: the Department's own worksheet has separate Taxpayer and Spouse columns with a $12,000 maximum in each, which is why married-joint is recorded at $24,000 - two separate per-person exemptions, available only where both spouses are 65 or older and both personally receive retirement income.

2. The rule that decides your Louisiana bill

This is the asymmetry the schema exists to preserve, and in Louisiana it is about as stark as it gets. A private pension is exempt only to the extent of the $12,000 age-65 allowance it shares with 401(k) and IRA distributions; a public, federal or military pension is exempt in full, with NO cap, NO age condition and NO income limit. public, exempt in full under three Schedule E codes: 02E, Louisiana State Employees' Retirement System (LASERS); 03E, Louisiana State Teachers' Retirement System (TRSL); and 05E, Other Retirement Benefits, covering every retirement system specifically exempted by Louisiana law - school employees, State Police, municipal employees and police, parochial employees, firefighters, assessors, clerks of court, district attorneys, registrars of voters, sheriffs, and certain other local systems. Federal and military, exempt in full under 04E, Federal Retirement Benefits, which covers retirement received from a Federal Retirement System including benefits from a military survivor benefit plan; the Department states that federal retirement benefits received by federal retirees, both military and nonmilitary, may be excluded, and Railroad Retirement System benefits are excludable on the same footing. There is no age trigger on any of these - a 45-year-old retired Louisiana state trooper or military retiree pays nothing, while a 64-year-old with a private pension pays 3% on every dollar. Separately, and not a retirement provision: Schedule E code 10E, under La

Louisiana is one of the most generous states for a career public-sector, federal or military retiree and merely average for a private-sector one. A lasers, trsl, local-system, federal or military pension is untaxed at any age; a 401(k) is taxed at 3% above a $12,000 allowance that does not start until 65.

The order of Louisiana retirement income matters: because the fully-exempt categories are removed before the $12,000 cap is applied, a retiree with both a state pension and a 401(k) keeps the full $12,000 allowance for the 401(k) rather than having it absorbed by the pension.

3. What Louisiana charges at three income levels

The same state, three retirements. All figures are for a single filer aged 70.

The marginal rate at the typical profile is 3%. That is what an extra dollar of distribution costs — a larger number than the 1.1% effective rate, and the one that matters when deciding how much to withdraw.

A married couple with $48,000 of Social Security and $62,000 of distributions pays $368.

4. Property tax, and why it lands harder in retirement

An effective rate of 0.6% on the state's $260,300 median home is about $1,432 a year.

For a retiree this is a harder cost than income tax, and the reason is structural: property tax is levied on the house, while retirement income falls. A bill sized to a working income arrives every year after the income has gone.

It is also assessed locally almost everywhere, so a statewide effective rate conceals real variation between counties. Treat the figure above as the state's shape rather than as your bill.

Louisiana does have a homestead provision, and it is the one lever on this line worth understanding.

Louisiana's constitutional homestead exemption exempts the first $75,000 of a primary residence's fair market value (roughly $7,500 of assessed value, since Louisiana assesses residential property at 10% of fair market value) from parish/local ad-valorem property tax — it does not apply to municipal (city) taxes in most cities. Only one homestead exemption per person/household; the owner must own and occupy the home as a primary residence as of January 1 of the tax year and apply once with the parish assessor (renews automatically after initial application, in most parishes). Typically saves a homeowner roughly $750-$800/year. Separate, larger exemptions exist for seniors (65+) and disabled veterans via the 'special assessment level' freeze and additional exemption amounts, not modeled here.

Two things about homestead rules catch people out after a move. They almost always require the property to be your primary residence, which a snowbird splitting the year has to be able to demonstrate. And several states require an application to the county rather than granting it automatically — a benefit you qualify for and never claimed is worth nothing.

5. Insurance, the line nobody prices

Average home insurance in Louisiana: $5,937 a year — 48th cheapest of the fifty states.

This is the line almost no retirement comparison includes, and across the country it varies more than income tax does: from Hawaii's $900 to Florida's $8,375, a ninefold spread.

For a retiree it behaves like a second property tax. It rises independently of income, a fixed-income household absorbs the whole increase, and it is a condition of the mortgage if you still have one.

6. What retiring in Louisiana actually costs

Income tax on the typical retirement profile, plus property tax and insurance on each state's own median home. Louisiana is shown against its own neighbours in the ranking, and against the extremes.

Louisiana comes to $8,453, 32nd of 50.

Income tax is 13% of that total. It is the line every comparison leads with and, here, not the largest of the three.

One large caveat, and it matters. Each row uses that state's own median home, and those differ a great deal. So this compares the typical house in each state, not the same house in each state — buying below a state's median improves its figure materially.

7. Whose pension it is changes the bill

Louisiana does not tax all pensions the same way. The same $50,000 costs $754 if it is a private employer pension and $0 if it is a government one. This is the asymmetry the schema exists to preserve, and in Louisiana it is about as stark as it gets. A private pension is exempt only to the extent of the $12,000 age-65 allowance it shares with 401(k) and IRA distributions; a public, federal or military pension is exempt in full, with NO cap, NO age condition and NO income limit. public, exempt in full under three Schedule E codes: 02E, Louisiana State Employees' Retirement System (LASERS); 03E, Louisiana State Teachers' Retirement System (TRSL); and 05E, Other Retirement Benefits, covering every retirement system specifically exempted by Louisiana law - school employees, State Police, municipal employees and police, parochial employees, firefighters, assessors, clerks of court, district attorneys, registrars of voters, sheriffs, and certain other local systems. Federal and military, exempt in full under 04E, Federal Retirement Benefits, which covers retirement received from a Federal Retirement System including benefits from a military survivor benefit plan; the Department states that federal retirement benefits received by federal retirees, both military and nonmilitary, may be excluded, and Railroad Retirement System benefits are excludable on the same footing. There is no age trigger on any of these - a 45-year-old retired Louisiana state trooper or military retiree pays nothing, while a 64-year-old with a private pension pays 3% on every dollar. Separately, and not a retirement provision: Schedule E code 10E, under La This is the distinction most published comparisons flatten. A state described as exempting pension income may exempt only the government kind — and a private-sector career is the case most states treat least generously.

8. What a Roth conversion costs in Louisiana

Converting $50,000 to a Roth costs an extra $1,500 in Louisiana tax — 3 cents on the dollar.

These are computed, not read off the bracket table, which matters because a conversion large enough to be worth making usually leaves the bracket it started in.

The state's share is the part you can move. Convert in a year you are resident somewhere with no income tax and it is zero; convert here and it is 3%. The federal tax is due either way.

9. What part-time work costs here

$20,000 of part-time work costs an extra $600 in Louisiana tax — an effective 3% on the earnings.

Compare that with the 3% a Roth conversion costs. The state treats the two identically, which keeps the decision a non-tax one.

Two federal rules apply on top and neither depends on your state. Earnings can raise the taxable share of Social Security, and claiming before full retirement age exposes you to the federal earnings test.

10. The order to draw your accounts in

The order you draw accounts in is worth real money, and the right order depends on the state.

Before the age trigger, draw from taxable and Roth money first. Louisiana charges $1,114 on $50,000 of plan distributions at 60 and $754 at 70, so a dollar taken early costs more than the same dollar taken later.

After the trigger, the pre-tax balance becomes the cheap source and the order reverses.

Required minimum distributions overrule all of this from 73 onward. Once they begin you must take the calculated amount whether the order suits you or not, which is the argument for drawing down or converting the pre-tax balance in the years before.

11. Or move across the state line

For most people the real alternative to Louisiana is not Wyoming — it is the state on the other side of the line, near the same family, the same doctors and the same weather.

Mississippi is the cheapest of the group at $6,297, $2,156 below Louisiana. Whether that is worth a move is a question about your life rather than your spreadsheet — but it is the comparison worth running, because it is the one you could actually act on.

One thing this table cannot show is the county. Property tax is set locally, and the spread inside a single state is routinely wider than the gap between two neighbouring states. A border move to a cheaper state and an expensive county can leave you worse off.

12. If you are moving to Louisiana from somewhere else

The eight most populous states people leave, measured against Louisiana on the same three lines.

Louisiana is cheaper than 4 of these eight. Which means the answer genuinely depends on where you are starting from.

A move is not free, and this table does not price it. Transaction costs on both houses run to several per cent of the sale price, and at typical values that is often more than the first two or three years of the saving.

Louisiana charges no transfer tax on the purchase, which is one closing cost you will not meet here and do meet in most states. Closing costs here run about 2% to 5% of the price — $5,206 to $13,015 on the median home, which is the real entry fee for the annual saving this article has been describing.

13. What Louisiana does not exempt you from

The federal system, entirely. This is the commonest misunderstanding about state retirement taxation, and it is worth stating plainly.

Required minimum distributions still apply. The amount is federal — your prior-year balance divided by an IRS life expectancy factor — and identical in all fifty states. A state changes what the distribution costs you, not whether you must take it.

Social Security is still federally taxable, on the federal provisional-income calculation, whatever your state does with it.

IRMAA still applies, with its two-year lag. A large conversion or distribution raises a Medicare premium two years later regardless of address.

And capital gains are still federally taxed. What Louisiana adds on top is a separate question from what the federal system takes.

14. Establishing that you actually live here

Any state tax advantage is worth nothing until Louisiana is your domicile, and the state you left may disagree about when that happened.

High-tax states audit departing residents. The question is not whether you own a home here; it is whether you genuinely abandoned the old domicile. Days spent in each state, voter registration, vehicle registration, where your doctors are and where you claim a homestead all bear on it.

The snowbird case is the risky one. Splitting the year between two states while keeping a home in both is exactly the profile a residency audit is built for. If a plan depends on the saving, count the days from the first year rather than reconstructing them afterwards.

15. Who Louisiana actually suits

A military retiree, whose pension is exempt here while a private one is not.

Someone with a government pension, which this state treats better than a private one of the same size.

It suits an affluent retiree least. At the affluent profile the bill is $3,454, and whatever exclusion helps a modest income has stopped helping by then.

It suits a homeowner less than a renter, because $5,937 of average insurance attaches to the property rather than to the income.

16. What to check before you decide

Get your county's actual property tax rate, not the state average. Property tax is levied locally almost everywhere, and the spread inside a state is often wider than the spread between states.

Get a real insurance quote on a real address. $5,937 is the state average; construction, roof age and exposure move it a long way.

Work out your own income tax rather than using the profile above. $95,000 split one way is not $95,000 split another, and in Louisiana the mix between Social Security and distributions changes the answer.

And check what your current state actually charges you before assuming it is worse. On these three lines the ranking surprises people in both directions.

Frequently asked questions

Does Louisiana tax Social Security? No. Fully exempt. Louisiana begins from federal adjusted gross income, so any federally taxable portion of benefits enters the Louisiana base and is then removed as exempt income under Schedule E code 07E: Social Security benefits that are taxed on the federal return are exempt from Louisiana tax, entered as the amount shown on federal Form 1040 or 1040-SR line 6b. No income threshold, no age condition, no phase-out.

Does Louisiana tax 401(k) or IRA withdrawals? The exclusion is per taxpayer, strictly age-gated at 65, and the amount doubled recently. Under La. R.S. 47:44.1, twelve thousand dollars of annual retirement income received by an individual sixty-five years of age or older is exempt from state income taxation.

What about pensions — private, government, or military? A $50,000 pension costs $754 if private, $0 if a government pension, and $0 if military retired pay. Those differences are the state's own policy, not an accident of the arithmetic.

What does retiring in Louisiana actually cost? Income tax of $1,084 on the typical profile, plus about $1,432 of property tax and $5,937 of insurance on the median home — $8,453, which is 32nd of 50.

Is Louisiana a cheap state to retire in? On these three lines it ranks 32nd of 50. Whether that makes it cheap for you depends far more on the house than on the tax code.

Is there an age at which the tax falls? Yes. The same $50,000 of plan distributions costs $1,114 at 60 and $754 at 70.

What does a Roth conversion cost in Louisiana? An extra $1,500 in state tax on $50,000 converted, and $3,000 on $100,000. That is 3% of the amount converted, on top of the federal tax.

Does part-time work get taxed differently from my 401(k) withdrawals? $20,000 of part-time earnings costs $600 in state tax, an effective 3%.

Would a neighbouring state be cheaper than Louisiana? Mississippi is the cheapest of Louisiana and its neighbours at $6,297 against Louisiana's $8,453.

Do required minimum distributions change if I move here? No. The required amount is a federal calculation and identical in every state. What changes is what the distribution costs once taken.

Does this article include local income tax? No local income tax applies to retirement income in Louisiana on the figures used here.

Will Louisiana's treatment still apply in ten years? State legislatures revise retirement taxation regularly — several states have changed theirs in the past three years. Figures here are for tax year 2026 and are worth re-checking before a move.

What to do next

Two numbers decide this and neither is the one in the headline: your county's actual property tax rate, and a real insurance quote on a real address.

• Retirement state tax calculator — what any state charges on your income, cited per state
• RMD calculator — the distribution you must take, which no state changes
• Home insurance premium estimator — the line this article says decides it
• The Relocation Tax Playbook — establishing domicile, and the states that contest it