Worst: No. 1, California

State income tax: 1.25% - 10.55%

State sales tax: 8.25%

Inheritance tax: No

The Golden State is a retiree's tax nightmare. Although Social Security benefits are exempt from state income taxes, all other forms of retirement income are fully taxed. Californians pay some of the highest income taxes in the U.S. State and local sales taxes can reach 10.5% in some cities and towns, although food and prescription drugs are exempt. Real estate is assessed at 100% of cash value, but taxes are capped at 1% of value.

Worst: No. 2, Rhode Island

State Income Tax: 3.75% - 9.9%

State Sales Tax: 7%

Inheritance Tax: No

Retirees face plenty of tax shoals in the Ocean State. Social Security benefits are taxed just like they are by the federal government. Rhode Island nicks virtually all other sources of retirement income, too. Starting this year, capital gains are taxed as ordinary income, eliminating the lower capital-gains rate in effect before 2010. The nation's smallest state also has one of the biggest statewide sales-tax rates -- 7% -- although it excludes food, medicine, some clothing and precious metal bullion. The Tax Foundation says Rhode Island's median real estate taxes are the fifth-highest in the U.S.

Worst: No. 3, New Jersey

State income tax: 1.4% - 8.97%

State sales tax: 7%

Inheritance tax: Yes

Its nickname may be the Garden State, but New Jersey is a thorny thicket for some retirees. Median real-estate taxes are the highest in the nation, according to the Tax Foundation. There are a few bright spots: New Jersey does not tax Social Security benefits and military pensions. It also allows residents 62 or older with incomes of $100,000 or less to exclude up to $15,000 ($20,000 for married couples filing jointly) of pensions, annuities and IRA withdrawals. Groceries, medicine and clothing are exempt from sales tax. The state imposes an inheritance tax on the transfer of real and personal property worth $500 or more, but bequests to family members are exempt.

Worst: No. 4, Vermont

State Income Tax: 3.55% - 8.95%

State Sales Tax: 6% (localities can add another 1%)

Inheritance Tax: No

There are no exemptions for retirement income in the Green Mountain State, except for Railroad Retirement benefits (which are exempt in every state). Out-of-state pensions are fully taxed. Vermont exempts medical devices and prescription and nonprescription drugs from its 6% sales tax. But it imposes a 9% tax on prepared foods, restaurant meals and lodging, and a 10% sales tax on alcoholic beverages served in restaurants. Real-estate taxes have two components: school property tax and municipal property tax collected by towns and cities where the property is located.

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Worst: No. 5, Iowa

State income tax: 0.36% - 8.98%

State sales tax: 6% (localities can add another 1%)

Inheritance tax: Yes

The Hawkeye State allows single retirees to exclude up to $6,000 of retirement-plan distributions from state income taxes, and married couples can exclude up to $12,000. It taxes a portion of residents' Social Security benefits, although it is in the process of phasing out the tax. Food and prescription drugs are exempt from state sales tax. Real estate is assessed at 100% of market value, and most property is taxed by more than one taxing authority, such as cities, counties and school districts. There is a small homestead tax credit for residents who live in-state at least six months of the year.