Retiring in Hawaiʻi: Taxes, Exemptions and Care Costs

Key takeaway: Hawaiʻi doesn’t tax Social Security or employer-funded pensions, but IRA and 401(k) withdrawals are taxed (Hawaiʻi Dept. of Taxation). Assisted living is the most expensive in the country, at a median of $12,096 a month (CareScout 2025). Numbers checked October 30, 2026.

How retirement income is taxed

Income	Taxed by Hawaiʻi?
Social Security	No
Pensions paid for entirely by the employer (state ERS, federal civil service, military, many private plans)	No
The part of a pension you contributed to	Yes
401(k), 403(b) and traditional IRA withdrawals	Yes

Source: Hawaiʻi Dept. of Taxation, Tax Review Commission presentation, July 2026. The commission is studying whether to change pension taxation; nothing has been enacted.

Property tax breaks for older homeowners

County	Home exemption	Senior amount
Honolulu	$120,000	$160,000 at 65+ (rising to $140,000 / $180,000 on July 1, 2027)
Maui	$300,000	No age-based increase; a circuit breaker credit is available
Kauaʻi	$220,000	$240,000 at 60–69; $260,000 at 70+
Hawaiʻi County	$50,000	$80,000 at 60–69; $100,000 at 70–79; $125,000 at 80+

An exemption reduces the assessed value you’re taxed on. See property tax by county for rates.

The cost of care

Care type	Hawaiʻi	U.S.	Hawaiʻi rank
Assisted living, private one-bedroom	$12,096/mo	$74,400/yr	#1
Nursing home, private room	$16,395/mo ($196,735/yr)	$129,575/yr	#4
Home caregiver (non-medical)	$93,808/yr	$80,080/yr	#9

Statewide medians, 2025 survey. Sources: CareScout Hawaiʻi data; Business Wire. Older guides quoting $6,000 to $9,000 a month for assisted living are out of date.