3. Minnesota

Minnesota conforms closely to federal taxation rules for Social Security.

That means if your benefits are taxable federally, they may also be taxable at the state level, though recent legislative efforts have increased exemptions for lower-income seniors.

In recent years, Minnesota has worked to reduce the burden on middle-income retirees. Still, higher-income households may face state taxation on benefits.

Healthcare quality is strong in Minnesota, but tax-conscious retirees should carefully calculate total exposure.