Retiring in California: how your income is taxed
California is fairly tax-friendly for retirees. On a typical retirement income it ranks #28 of 51 for the lowest state income tax.
The rules in California
- Social Security: Social Security benefits are fully exempt from California income tax.
- Pensions: All private and government pensions are fully taxed as ordinary income. No general pension exclusion. Military retirement: for 2025-2029, up to $20,000 of military retirement or Survivor Benefit Plan pay can be excluded if federal AGI is $125,000 or less ($250,000 or less joint). Otherwise it is taxed.
- 401(k), 403(b) and IRA withdrawals: 401(k) and IRA withdrawals are taxed as ordinary income at California's regular rates.
- At 65 and older: Each filer 65 or older gets a senior exemption credit ($153 for 2025).
Calculate your California retirement taxes
State income tax in California: $430 a year
In California, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In California you'd pay about $430 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $65,234 (6.8% total).
California ranks #28 of 51 for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in California
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $430 | $0 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $4,902 | $1,773 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply California's main exclusions and may differ for income-tested credits.
States with lower retirement taxes
Moving to California in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to California come from (IRS migration data, 2022–2023).
- Texas to California
- New York to California
- Washington to California
- Arizona to California
- Nevada to California
- Florida to California
Frequently asked questions
Does California tax Social Security?
Not taxed. Social Security benefits are fully exempt from California income tax.
Does California tax pensions?
Taxed. All private and government pensions are fully taxed as ordinary income. No general pension exclusion. Military retirement: for 2025-2029, up to $20,000 of military retirement or Survivor Benefit Plan pay can be excluded if federal AGI is $125,000 or less ($250,000 or less joint). Otherwise it is taxed.
Does California tax 401(k) and IRA withdrawals?
Taxed. 401(k) and IRA withdrawals are taxed as ordinary income at California's regular rates.
Is California a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, California charges about $430 in state income tax, ranking #28 of 51 (lowest tax first).
Related
Sources: ftb.ca.gov, lao.ca.gov, moaa.org. Rules reviewed .