Retiring in New Mexico

Every figure below is sourced to New Mexico’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.

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

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.

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

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

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

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

401(k) and IRA withdrawals: Taxed
Social Security: Taxed above an income threshold; Below the threshold it is exempt, which is why a yes-or-no answer is usually wrong here.
Top marginal rate: 5.9%; The top of 6 graduated brackets.
Tax year: 2026; Brackets are legislated and change on a fixed calendar, so the year matters.

New Mexico taxes retirement money more heavily than its reputation as a retiree state suggests: private and public pensions and all qualified plan distributions are ordinary income, and the only categorical breaks are the Social Security threshold exemption and the military retirement exemption.
The Social Security cliff at $100,000/$150,000/$75,000 makes the marginal cost of one extra dollar of income near the line enormous. A retiree planning a Roth conversion or a large IRA withdrawal in New Mexico should model the year against those thresholds before the year ends, because crossing them re-taxes the entire benefit rather than the extra dollar.
DELIBERATE OMISSION, stated rather than left blank: autoIraProgram is not populated. New Mexico's Work and Save Act created a state-facilitated retirement savings marketplace and a voluntary payroll-deduction IRA, but it does not impose an employer mandate of the kind New York, Oregon, Rhode Island and Illinois have. Recording it in a field whose other entries are live mandates would misrepresent an employer's obligations here.