New Jersey Retirees Can Look To This Tax-Friendly Neighboring State With Vibrant Culture And Mountains

After decades of working, raising families, and paying the bills, many Americans are eager to retire. For some, moving to a warmer climate is a priority, while others want to stretch their savings or relocate closer to loved ones. And in the Northeast, where property taxes and the cost of living can take a big chunk out of a nest egg or be unrealistic for retirees living on a fixed income, sometimes just crossing the state line can make all the difference.

Consider New Jersey, for example. Steve Trevelise from New Jersey 101.5 points out that, despite property tax perks for seniors, many people are still fed up with the state's high cost of living. That may be why, according to United Van Lines' 2025 National Movers Study, the Garden State had the country's highest proportion of outbound moves among states included in the ranking for the eighth year in a row. In 2025, 62% of moves involving New Jersey were people leaving the state, with retirement and affordability listed among the factors influencing their decision to move. While this data is specific to the moving company's customers (it's based on moves within the UniGroup network), it still shows a number of New Jersey retirees are looking to settle down elsewhere post-career. 

One good option for New Jersey retirees is actually right next door. According to U.S. Census data, Pennsylvania was the top choice for people moving from New Jersey, with over 38,000 people relocating there in 2024. Pennsylvania's tax-friendliness, especially for retirees, is a major draw. Add to that its historic towns, vibrant cultural hubs, and beautiful mountain scenery (such as in the Lehigh Valley region), and it's easy to see why New Jersey retirees find compelling reasons to settle down just across the border instead of hundreds of miles away.

One of Pennsylvania's biggest selling points for retirees is how it handles retirement income. Pennsylvania's personal income tax rate is 3.07%, but state exemptions mean many retirees owe little or no state income tax on their retirement benefits. The state doesn't tax Social Security benefits, and distributions from qualifying retirement plans — including pensions, IRAs, and 401(k)s — are generally exempt. While New Jersey also exempts Social Security benefits and offers retirement income exclusions, those benefits depend on income and eligibility. For example, New Jersey retirees must have been 62 or older on the last day of the tax year and have earned an income of less than $150,000.

Property taxes are another thing to keep in mind, especially for retirees on a fixed income or with limited savings. New Jersey has some of the country's highest property tax bills at around 1.88% in 2024, according to Tax Foundation. On the other hand, Pennsylvania comes in with a lower average of around 1.26% for the same year. However, Pennsylvania does impose an inheritance tax ranging from 0% to 15%, so it's worth looking into this for retirees who plan to pass on property to heirs.

Location matters, too. Whether they're looking for a trendy city like Easton with a fabulous farmer's market or a historic suburb not too far from Philadelphia, retirees will find a variety of lifestyles to choose from in Pennsylvania. For city-lovers who want to ditch their car, Philadelphia offers public transportation and rideshare options for getting around. Meanwhile, most suburban and rural communities will require a car for everyday errands. Retirees planning a move can start by comparing living costs, medical services, transportation needs, and community vibes to narrow down the best areas to plant their retirement roots.

Pennsylvania offers a mix of cultural attractions, mountain scenery, historic appeal, and welcoming communities that make it easy to fill your days. Bethlehem was named one the country's top 100 places to retire by Investopedia, which noted its affordable housing. From its growth into a cultural hub to walkable downtown and busy event calendar, Bethlehem is an appealing option for retirees who want easy access to New Jersey and Lehigh Valley International Airport. The former Bethlehem Steel industrial complex has become SteelStacks, a destination for concerts, festivals, films, and community events. Its historic downtown also offers shops, restaurants, and free annual events such as Musikfest.

About three hours west, Altoona was ranked the state's top place to retire (and seventh nationwide) by U.S. News and World Report. The report notes that 19% of the town's population is over 65, and Altoona offers peaceful mountain views, outdoor fun, and attractions like theaters, art museums, parks, and golf courses. Other top-ranked retirement destinations in Pennsylvania include Johnstown, Williamsport, Lebanon, Charmbersburg, Erie, and Allentown.

For outdoor lovers, Pennsylvania's Pocono Mountains region is filled with forested hills, lakes, hiking trails, and small mountain towns. Lehigh Gorge State Park offers riverside trails and beautiful autumn scenery, while Delaware Water Gap National Recreation Area gives retirees more opportunities to enjoy nature. However, anyone who prefers city life should consider Pittsburgh or Philadelphia, which took sixth and tenth place on the report's state ranking, respectively. Both offer a ton of dining and entertainment options with convenient public transportation. Of course, Pennsylvania's winters bring snow and freezing temperatures, especially in the mountains. Retirees may want to consider winter driving conditions and home maintenance, although the changing seasons are typically part of the appeal for many established Northeasterners.