Retiring in Virginia: What the State Actually Takes

On the ordinary retirement profile — $34,000 of Social Security and $61,000 of plan distributions — Virginia takes $2,693 a year in state income tax.

That is the number people compare, and it is the smallest of three. Property tax adds about $3,355 on the state's $453,389 median home, and insurance another $2,265. The three together come to $8,313, placing Virginia 30th of 50.

A note before you start. This is general education, not tax advice. Every Virginia 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 Virginia takes from retirement income

On Social Security. Fully exempt, with no income threshold, no phase-out, and no age condition. Va. Code 58.1-322.02(3) subtracts benefits received under Title II of the Social Security Act and other benefits subject to federal income taxation solely pursuant to IRC section 86. The same definition is reused elsewhere in the Virginia code in a way that matters: 'adjusted federal adjusted gross income', the measure used to phase out the age deduction, is federal AGI minus those Social Security benefits — so Social Security is not merely untaxed, it also does not count against a retiree's age deduction.

On 401(k) and IRA distributions. Read this as an age deduction, not a retirement-income exclusion. Virginia has no subtraction aimed at 401(k), 403(b), or IRA distributions as such — those are fully included in Virginia taxable income. What older filers get instead is the general age deduction under Va. Code 58.1-322.03(5): $12,000 per qualifying individual, which reduces Virginia adjusted gross income from whatever source, retirement or otherwise. Two tracks. (1) Individuals born on or before January 1, 1939 get the full $12,000 with NO income test at all.

2. The rule that decides your Virginia bill

Private and public pensions are fully taxable. Virginia has no general pension exclusion and no carve-out for Virginia Retirement System, federal, or other state pensions — a retired Virginia teacher and a retired private-sector employee are taxed identically, and both rely on the age deduction rather than on any pension-specific relief. Military benefits are the exception, and the exception got substantially bigger recently. Va. Code 58.1-322.02(18) allows a subtraction of up to $40,000 of military benefits for taxable years beginning on and after January 1, 2025, following a phase-in of $10,000 (2022), $20,000 (2023), and $30,000 (2024). The age requirement is gone: the age-55-or-older condition applied only to the 2022 and 2023 tranches under subdivision (b); the subtraction under subdivision (c), which governs 2024 onward, is 'allowed for military benefits received by an individual of any age.' A great deal of published material still repeats the age-55 rule and is out of date. 'Military benefits' is defined broadly as military retirement income for service in the U.S.

Virginia's retirement picture is unusual in the fifty-state dataset: Social Security is fully exempt, military benefits get a large and newly age-free subtraction, and everything else — private pensions, government pensions, 401(k) and IRA distributions — is taxed at the ordinary schedule with only the age deduction as relief.

The age deduction's $1-for-$1 phase-out is much steeper than the partial phase-outs common in other states. A single 70-year-old at $62,000 of adjusted federal AGI receives nothing from it, and there is no residual floor.

3. What Virginia 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 5.8%. That is what an extra dollar of distribution costs — a larger number than the 2.8% 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 $2,194.

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

An effective rate of 0.7% on the state's $453,389 median home is about $3,355 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.

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

Virginia has no statewide ad-valorem homestead exemption that reduces annual property tax bills (the state's constitutional 'homestead exemption' at Va. Code 34-4, up to $25,000-$50,000 depending on filing, is a bankruptcy/creditor-protection exemption, unrelated to property tax). Instead, Va. Code 58.1-3210 authorizes (but does not require) each city/county to offer real property tax relief — exemption, deferral, or both — to homeowners age 65+ or permanently disabled, with income/net-worth limits set locally (commonly $50,000-$75,000 income caps); apply through the local Commissioner of the Revenue. Separately, Va. Code 58.1-3219.5 provides a full, statewide real estate tax exemption for the principal residence of a veteran with a 100% service-connected permanent and total disability (and, since a 2024 update, surviving spouses of certain fallen first responders).

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 Virginia: $2,265 a year — 22nd 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 Virginia actually costs

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

Virginia comes to $8,313, 30th of 50.

Income tax is 32% 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. The age that changes your Virginia bill

The same $50,000 of plan distributions costs $2,061 at 60 and $1,371 at 70. That is an age trigger, and it is worth $690 a year to wait — or, put the other way, it is what retiring early costs you in Virginia on top of everything else. Read this as an age deduction, not a retirement-income exclusion. Virginia has no subtraction aimed at 401(k), 403(b), or IRA distributions as such — those are fully included in Virginia taxable income. What older filers get instead is the general age deduction under Va. Code 58.1-322.03(5): $12,000 per qualifying individual, which reduces Virginia adjusted gross income from whatever source, retirement or otherwise. Two tracks. (1) Individuals born on or before January 1, 1939 get the full $12,000 with NO income test at all. It also changes the withdrawal order. Someone retiring before the trigger age has a reason to draw on taxable or Roth money first and leave the pre-tax balance until the exclusion applies.

8. What a Roth conversion costs in Virginia

Converting $50,000 to a Roth costs an extra $2,875 in Virginia tax — 5.7 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 5.7%. The federal tax is due either way.

9. What part-time work costs here

$20,000 of part-time work costs an extra $1,150 in Virginia tax — an effective 5.8% on the earnings.

Compare that with the 5.7% a Roth conversion costs. Wages are the more expensive dollar here.

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. Virginia charges $2,061 on $50,000 of plan distributions at 60 and $1,371 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 Virginia 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.

West Virginia is the cheapest of the group at $5,544, $2,769 below Virginia. 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 Virginia from somewhere else

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

Virginia is cheaper than 5 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.

Virginia charges a transfer tax on the purchase itself — 0.1%, customarily paid by the seller. On the state's $453,389 median home that is about $453, once, at the point of sale. Closing costs here run about 2% to 3.4% of the price — $9,068 to $15,415 on the median home, which is the real entry fee for the annual saving this article has been describing.

13. What Virginia 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 Virginia 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 Virginia 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 Virginia actually suits

It suits an affluent retiree least. At the affluent profile the bill is $7,236, and whatever exclusion helps a modest income has stopped helping by then.

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. $2,265 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 Virginia 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 Virginia tax Social Security? No. Fully exempt, with no income threshold, no phase-out, and no age condition. Va. Code 58.1-322.02(3) subtracts benefits received under Title II of the Social Security Act and other benefits subject to federal income taxation solely pursuant to IRC section 86. The same definition is reused elsewhere in the Virginia code in a way that matters: 'adjusted federal adjusted gross income', the measure used to phase out the age deduction, is federal AGI minus those Social Security benefits — so Social Security is not merely untaxed, it also does not count against a retiree's age deduction.

Does Virginia tax 401(k) or IRA withdrawals? Read this as an age deduction, not a retirement-income exclusion. Virginia has no subtraction aimed at 401(k), 403(b), or IRA distributions as such — those are fully included in Virginia taxable income. What older filers get instead is the general age deduction under Va. Code 58.1-322.03(5): $12,000 per qualifying individual, which reduces Virginia adjusted gross income from whatever source, retirement or otherwise.

What about pensions — private, government, or military? A $50,000 pension costs $2,061 if private, $2,061 if a government pension, and $6 if military retired pay. Those differences are the state's own policy, not an accident of the arithmetic.

What does retiring in Virginia actually cost? Income tax of $2,693 on the typical profile, plus about $3,355 of property tax and $2,265 of insurance on the median home — $8,313, which is 30th of 50.

Is Virginia a cheap state to retire in? On these three lines it ranks 30th 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 $2,061 at 60 and $1,371 at 70.

What does a Roth conversion cost in Virginia? An extra $2,875 in state tax on $50,000 converted, and $5,750 on $100,000. That is 5.7% 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 $1,150 in state tax, an effective 5.8%.

Would a neighbouring state be cheaper than Virginia? West Virginia is the cheapest of Virginia and its neighbours at $5,544 against Virginia's $8,313.

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 Virginia on the figures used here.

Will Virginia'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