Vermont vs. New Hampshire for Retirees

You have worked hard for decades. Now, it is time to enjoy the payoff.

If you are eyeing New England for your golden years, you are probably looking at Vermont and New Hampshire. Both states offer stunning scenery, crisp mountain air, and charming small towns.

But when it comes to your wallet, these twin states are very different.

Choosing the wrong state could cost you thousands of dollars a year in taxes. Choosing the right one means more money for travel, hobbies, and spoiling your grandkids.

As local real estate experts who help people relocate across the VT and NH border every day, we know exactly what retirees care about.

Let us break down the taxes, the lifestyle, and where your retirement dollar actually goes further.

The Big Difference |  How Your Retirement Income Gets Taxed

When you retire on a fixed income, every dollar matters. This is where New Hampshire and Vermont take completely different paths.

New Hampshire is famous for its "Live Free or Die" motto. They take that seriously when it comes to your income. As of 2025, New Hampshire has zero state income tax.

What does that mean for you?

•Your Social Security benefits are not taxed.

•Your pension income is not taxed.

•Your 401(k) and IRA withdrawals are not taxed.

You keep what you have saved.

Vermont, on the other hand, is not as friendly to your retirement accounts. Vermont has a progressive income tax system. They fully tax pensions and retirement account withdrawals. They also tax Social Security benefits for higher earners. However, Vermont does offer some relief. If you are a single filer making under $50,000 or married filing jointly under $65,000, your Social Security is exempt from state taxes.

If maximizing your monthly income is your top priority, New Hampshire wins this round easily.

Cost of Living | Sales Tax and Daily Expenses

Let us look at your daily spending. Groceries, clothes, cars, and furniture.

New Hampshire has zero sales tax. When you buy a $20,000 car, you pay $20,000. When you buy a new TV, there is no extra fee added at the register. Over a 20 year retirement, zero sales tax adds up to massive savings.

Vermont has a 6% state sales tax, and some local municipalities add their own local taxes on top of that.

Overall, Vermont has a higher cost of living index than the national average. Housing, utilities, and daily expenses simply cost more in the Green Mountain State.

If you are strictly looking at the numbers, New Hampshire generally lets your dollar stretch much further. You can read more about state tax policies on the Tax Foundation website.

Lifestyle and Healthcare |  More Than Just Money

Retirement is not just a math equation. It is about how you want to live your life.

Both states offer an incredible quality of life. You get beautiful fall foliage, snowy winters, and perfect summer days.

If you love the outdoors, Vermont is a paradise. It is quieter, more rural, and heavily focused on community and nature. Towns like Stowe and Brattleboro are famous for their welcoming, creative vibes. If you want a peaceful cabin in the woods where you can hike and ski, Vermont is calling your name.

New Hampshire offers a bit more variety. You have the rugged White Mountains in the north, but the southern part of the state is much more developed. You get easy access to Boston, major airports, and larger shopping centers.

When it comes to healthcare, both states perform well, but New Hampshire stands out. Recent studies by Bankrate ranked New Hampshire as the number one best state to retire in the entire country for 2025. They ranked incredibly high for neighborhood safety and senior healthcare access.

You can learn more about how states rank for retirees in this recent Bankrate retirement study.

The Final Verdict: Which State is Right for You?

So, where should you retire?

Choose New Hampshire if:

•You have significant income from pensions, 401(k)s, or Social Security.

•You want to avoid sales tax on big purchases.

•You want top tier healthcare and easy access to major cities.

Choose Vermont if:

•Your retirement income is modest enough to qualify for tax exemptions.

•You prioritize a quiet, nature focused lifestyle.

•You want a tight knit, rural community feel.

The best way to decide is to visit both. Drive across the border. Look at houses. Grab a coffee at a local diner.

When you are ready to start looking at properties, our team at VT NH Realty is here to help you navigate the local markets and find the perfect retirement home.

Frequently Asked Questions

Does Vermont tax Social Security benefits?

Yes, but with exemptions.Depending on your Adjusted Gross Income, your Social Security benefits could be exempt from Vermont state taxes.

Is New Hampshire completely tax free for retirees?

New Hampshire has no state income tax, no sales tax, and no tax on Social Security, pensions, or retirement accounts. However, they do have very high property taxes.

Which state has better healthcare for seniors?

Both states have excellent healthcare systems, but New Hampshire consistently ranks in the top five nationally for senior health and healthcare access.

Are property taxes higher in Vermont or New Hampshire?

The effective property tax rates are very similar, both ranking among the highest in the country. However, because home values are often higher in New Hampshire, the actual dollar amount you pay in property taxes is usually higher in New Hampshire.