State retirement tax · Hawaii
Retirement tax rules for Hawaii residents (2026 guide)
Hawaii's effective income-tax rate at retirement-bracket income is approximately 6.50%. Here's what it taxes, what it exempts, and how the worked numbers shake out.
Last reviewed May 3, 2026
Editorial review pending — see editorial process
Effective rate
6.50%
Taxes Social Security?
No
Approx. tax on $90k income
$3,900
Pension carve-outs
Yes
Hawaii runs a higher effective rate (6.50% or more on retirement-relevant income) but mitigates the bite with a full Social Security exemption. The conventional move for retirees in high-tax states is to weigh whether your retirement-stage tax savings from relocating clear the moving and quality-of-life costs.
What Hawaii taxes (and what it doesn’t)
Hawaii taxes retirement income (401(k) withdrawals, IRA withdrawals, pension payments) at the state's standard income-tax rate. Social Security benefits are FULLY EXEMPT from state tax — this matters because it can change your effective state-tax burden by 2-4 percentage points compared to a state that taxes SS.
State-specific note
Fully excludes employer-funded pension; partial exclusion on IRAs depending on contributions.
A worked example
Worked example. A Hawaii retiree with $60,000 of pension and IRA withdrawals plus $30,000 of annual Social Security is taxed on the $60,000 of non-SS income only (SS is exempt). At the approximate 6.50% effective rate, that's about $3,900/year — roughly $325/month — owed to the state.
Should you relocate?
Hawaii's high effective rate is the most-cited reason retirees consider relocating. Before moving, model both your before-tax cost of living and the tax-bracket arbitrage carefully — a $15K/year tax saving can be eaten by a $1.5M home purchase in the destination market.
See how Hawaii state tax shapes your retirement plan
The calculator’s Taxes tab uses the 6.50% effective rate above and the SS-exemption flag automatically. Run your specific numbers and see the year-by-year tax forecast.
Run my numbers →Frequently asked
Does Hawaii tax my Social Security?
No. Hawaii fully exempts Social Security benefits from state income tax. You'll only owe state tax on non-SS retirement income (401(k), IRA withdrawals, pensions, brokerage gains).
What's the effective state tax rate on my retirement income?
Hawaii's approximate effective rate for retirement-bracket income is 6.50%. For a $90k retirement income with $30k of Social Security, you'd owe roughly $3,900/year in state tax. Real liability varies with bracket structure, age-based exclusions, and pension carve-outs.
Should I relocate to Hawaii for retirement?
It depends on the size of your retirement income, the destination state's effective rate, and your moving costs. The state-tax differential alone is rarely the decisive factor for normal-income retirees. For households with $1M+ retirement income, multi-year tax-arbitrage savings can exceed $20k/year — enough to drive the decision.
Are pension benefits taxed differently in Hawaii?
Many states have specific carve-outs for pension income — particularly for public-sector pensions (teachers, firefighters, police, military). Fully excludes employer-funded pension; partial exclusion on IRAs depending on contributions. Yearfold's calculator uses an effective-rate approximation; real liability may be lower if you qualify for a pension exclusion.
Does this apply to property tax too?
No. This page covers state INCOME tax only. Property tax in Hawaii is set by local jurisdictions (county / city / school district) and varies dramatically within the state. For a complete retirement-cost picture, consult your specific county's tax assessor.
Primary sources
Effective-rate and SS-taxation flags above are derived from these sources. We re-verify each annually.
Related reading
Dist. of Columbia retirement tax rules →
Comparable effective rate (6.50% vs 6.50%).
Pennsylvania retirement tax rules →
For perspective from a different tax tier.
Minnesota retirement tax rules →
An example of a state that DOES tax Social Security.
Run my numbers →
The calculator's Taxes tab uses the same per-state effective rate.
How the Monte Carlo actually works →
2,000-word methodology page — covers state tax modelling.