Key Takeaways
- The current law is that Mississippi does not text Social Security, 401K, pension, or military retirement.
- A couple that is earning about $190,000 a year from these sources would ultimately pay zero dollars in income tax.
- The buildup Mississippi act is lowering income taxes from 4.0% in 2026 with the goal to remove in 2030
- Homeowners from age of 65+ earn $75,000 in reduction assessment value on their primary home for property taxes.
- These tax breaks only applied to primarily homes, not second homes.
- It is important to always talk to a qualified tax advisor, as well as the Mississippi Department of Revenue about each situation.
There are many financially experienced retirees, looking at waterfront homes on the golf course. They are doing a deeper comparison than most real estate markets typically show. They are not just looking at listing prices, they are looking at cost of ownership. This includes construction, Lynn, property, taxes, insurance, and how much their retirement income is going to be taxed each year.
When you look at the full picture in Ocean Springs, Bay, St. Louis, and pass Christian, the results are typically surprising. There is a mix of no state tax on retirement, income and strong property tax benefits for seniors. They also lower construction costs than Florida and they plan to reduce income taxes which creates a financial advantage that is hard to match on the Gulf Coast.
Mississippi’s Retirement Income Exemption: Current Law, Not Future Promise
Mississippi does not tax retirement income. This has already become a part of the state law. It is fully established, not being facing, or dependent on anything.
This includes these sources are fully exempt from state income tax
- Social Security income
- IRA distributions
- 401(k) distributions
- Pension income this includes public and private
- Military retirement pay
For example, a retiree earning $200,000 per year from Social Security, IRA withdrawals, and pitch and plan would pay zero dollars in Mississippi state income tax with that income.
Compared to other states like California that is 13.3%, New York up to 10.9%, or Illinois is 4.95%. Compared to these other states like Florida or Texas which also have no income tax Mississippi offers a very similar result. For retirees that often have much lower home building and land cost.
The Build- Up Mississippi Act: Earned Income Going to Zero
The buildup Mississippi act is working to reduce the state’s income tax on earned income. In 2026 the rate is 4.0% on income above $10,000. With that the first $10,000 and not tax. Moving forward, the plan is to lower the rate overtime with a goal of moving it completely. This all depends on the states meaning certain fundamental requirements.
For retirees, this law mostly helps in certain situations such as
- A spouse who is working
- A part-time or consulting
- Income from a rental property
The tax cuts are planned but not guaranteed. The main financial benefit for these retirees is the law that is now in place. That reinforces not to tax retirement income.
Tax Laws continue to change so it’s important to talk to a qualified tax advisor for the Mississippi Department of Revenue about each situation.
The Senior Property Tax Exemption and its Limits
Mississippi residents that are 65 or older can get $75,000 in the assessed value of their primary home for property taxes. The state’s property tax is typically already low around 0.6%. That is compared to Florida’s at 0.9% in Texas at 1.5 to 2.0% in coastal areas.
It is important to know that the $75,000 senior exemption in Mississippi Homestead is only applied to primary homes. This is homes that they primarily use and that excludes waterfront homes. A waterfront home used as a secondary home will not qualify. Buyers who make Mississippi their main residence are allowed to use these benefits while second home owners cannot use it.
Quantifying the Advantage : A realistic Retirement Scenario
If there was a couple, both age of 68 with a yearly income of
- Combined Social Security at $60,000
- IRA with drawals: $90,000
- Pension income: $40,000
The total is $190,000
Mississippi state income tax on this income is : 0
In comparison:
In California: about $14,000- $18,000 per year
In Illinois: around $9,400 per
In New York is around $12,000- $15,000 per year
If a retiree moved from California to Mississippi, and over the span of 20 years, they could save about $280,000-$360,000 and state income taxes alone.
This does not include extra savings from lower property taxes, insurance cost, or lower bill cost on the Mississippi Gulf Coast.
The Full comparison: Mississippi vs other coastal destinations
Retirement Income Tax
MS Gulf Coast: $0 (fully exempt)
FL (Coastal): $0 (no state tax)
TX (Coastal): $0 (no state tax)
SC (Coastal): Partially exempt
Earned Income Tax
MS Gulf Coast: 4.0%, going down to 0
FL (Coastal): None
TX (Coastal): None
SC (Coastal): Up to 7%
Property Tax Rate
MS Gulf Coast: ~0.6%
FL (Coastal): ~0.9%–1.1%
TX (Coastal): ~1.5%–2.0%
SC (Coastal): ~0.5%–0.7%
Senior Property Benefit
MS Gulf Coast: $75K value reduction
FL (Coastal): Homestead exemption
TX (Coastal): Over-65 exemption
SC (Coastal): Varies
Luxury Build Cost
MS Gulf Coast: $280–$400+ per sq ft
FL (Coastal): $375–$625+ per sq ft
TX (Coastal): $300–$500+ per sq ft
SC (Coastal): $350–$550+ per sq ft
Insurance Environment
MS Gulf Coast: Moderate
FL (Coastal): Very high
TX (Coastal): Moderate to high
SC (Coastal): High
The Life that Makes the Numbers Worth It
- Residence of easy access to the Gulf of Mexico for different activities. Such as fishing, boating, sailing, and the Gulf Islands, natural seashore
- Ocean Springs was also named USA. Today is the number one best coastal town. The southern living best small town was also nominated in Mississippi. Bay St. Louis was ranked number two in the year 2022.
- Strong local food scenes are also in the area. This includes vestige located in Ocean Springs. This is a highly rated restaurant.
- St. Louis Bay is approximately 15 minutes from New Orleans which is a great location.
- On top of that, they have less traffic and a more relaxed community. Mini buyers are looking for this compared to Florida.
To get started on the most efficient path check out https://thornhillconstruction.com/plans/ or https://thornhillconstruction.com/signature-series/ . Thornhills construction is the path to build with an efficient process. See the finished homes here https://thornhillconstruction.com/gallery/
Frequently Asked Questions
If I keep my Florida address and buy a second home in Mississippi, do I still get the tax benefits?
Mississippi retirement benefit applies only if you owe Mississippi State income tax. If you live in Florida in our Florida residence, this does not apply to you. No state income tax. The Mississippi senior property tax break and homestead exemption applies to primary homes in Mississippi. And it would not include the second homes.
Is the retirement income tax benefit likely to go away?
Mississippi’s retirement income exemption continues to be in place. It is very widely supported. However, like all tax laws it has not been able to change. It is best to check on updates with your qualified tax advisor.
Does the $75,000 senior exemption apply to land or total home value?
This reduction only applies to the assessed value of the primary home. For more information get in contact with your local tax advisor and how it applies to your property.
Your Next Step
There are many financial benefits of retiring on Mississippi golf. This is based on current laws, real cost differences, proving tax advantages. The retirement income tax break exists today. The lower cost construction also exists today.
If you’re ready to build your luxury coastal home on the Mississippi coast then get a free consultation scheduled today at Thornhill construction.