Retiring in Iowa

Every figure below is sourced to Iowa’s own publications and dated. Estimates only, and not tax advice.

Retirement tax by state

What your state actually takes from a 401(k) withdrawal, a pension, and Social Security — in dollars, not a yes/no list.

Brokerage account growth

Long-term index-fund growth after expense-ratio drag — and what your state takes from the gains at withdrawal.

Roth vs. Traditional

Decided on the two rates that actually govern it — yours now, and yours at withdrawal, in the state you'll retire in rather than the one you're in.

Contribution limit optimizer

2026 limits, employer match, the 60-63 super catch-up, and whether the Roth catch-up mandate applies to you.

Required minimum distribution

When your RMDs start under SECURE 2.0, how much this year's is, and what missing it costs.

Backdoor Roth pro-rata

What a backdoor Roth conversion would actually cost you in tax — the pro-rata rule most calculators only describe.

Self-directed IRA real estate (UDFI)

The tax a leveraged rental owes inside a self-directed IRA — computed at trust rates, not the rate you'd assume.

Iowa at a glance

401(k) and IRA withdrawals
Not taxed
From age 55.
Social Security
Not taxed
Top marginal rate
3.8%
A flat rate on all taxable income.
Tax year
2026
Brackets are legislated and change on a fixed calendar, so the year matters.
  • The single most consequential Iowa fact for a retirement calculator: a 54-year-old and a 55-year-old with identical 401(k) distributions face completely different Iowa tax. The exclusion is a cliff at age 55 on December 31, not a phase-in.
  • Iowa's exclusion has no dollar cap. That makes Iowa materially more generous than the capped-exclusion states it is often grouped with, where a large distribution exhausts the exclusion and the remainder is taxed.
  • Certain lump-sum distributions from pensions and retirement plans are also exempt from the separate Iowa lump-sum tax where the recipient meets the same disabled / age-55 / surviving-spouse criteria.
  • Because Iowa begins from federal taxable income, a retiree's federal standard deduction (including the federal additional standard deduction for age 65 and the federal enhanced deduction for seniors) is already embedded in the Iowa starting figure. Iowa does not layer a second state-level standard deduction on top.

Local income tax applies in parts of Iowa

Iowa has a genuine local income tax and it is commonly missed, because it is levied as a PERCENTAGE OF STATE TAX LIABILITY rather than as a percentage of income. Form IA 1040 line 19 is 'School district surtax or EMS surtax: multiply line 18 by the percentage from list', and line 20 is 'Total state tax and local surtax'. Two separate levies ride on that line: a school district income surtax, set independently by each of Iowa's school districts, and an emergency medical services (EMS) income surtax adopted by some counties. Because the base is state tax owed rather than income, a taxpayer converts it by multiplying their Iowa tax by the district percentage, not their income. Representative 2026 district-by-district percentages are NOT recorded here because the Department publishes them as an annual list keyed to district number that could not be confirmed for 2026 within this pass. Disclose the mechanism and the fact that it varies by school district; do not quote a rate.