How to Pay Zero State Income Tax as a Retired Teacher in CT
- Marc Lowe
- Dec 18
- 3 min read
Most Connecticut teachers assume state taxes in retirement are unavoidable.
That's not necessarily always the case.
With the right income planning, many retired Connecticut teachers can legally structure their retirement so they owe little — or even nothing — in Connecticut state income tax.
But it does take some planning.
The Hidden Opportunity Teachers Miss
Connecticut has specific income thresholds that, when respected, can make a teacher pension effectively tax-free at the state level.
The catch?
The rule is based on Connecticut AGI, not federal AGI
It applies to how income is coordinated, not just how much you earn
One wrong move can quietly push you over the line
Most retirees don’t find out about this until they crossed the threshold until after the tax return is filed.... that's if they actually review their Tax Return each year.
Why “I’ll Just Figure It Out Later” Gets Expensive
I regularly see retired teachers:
Paying state taxes they didn’t need to pay
Withholding taxes from pensions unnecessarily
Triggering avoidable income through poor withdrawal sequencing
The irony? Many of them could have paid $0 in CT income tax with a plan in place.
This Is What Planning Actually Looks Like
Paying no state income tax in retirement isn’t about loopholes or tricks.
It’s about intentionally coordinating:
Pension income
Social Security timing
IRA and 403(b) withdrawals
Roth conversion strategy
Investment income and capital gains
When these pieces aren’t aligned, Connecticut takes your state taxes and spends them how they see fit as opposed to you saving, spending or investing it.
When you have a tax strategy, you have the opportunity to keep more of what you earned.
Who This Is For
This strategy is especially relevant if you are:
A Connecticut teacher within 5–10 years of retirement, or
Recently retired and wondering why state taxes still show up
If you’re already retired and paying state taxes, it may not be too late — but the window narrows every year.
The Real Question
The real question isn’t:
“Will I owe state income tax in retirement?”
It’s:
“Do I have a strategy designed to help me avoid it?”
That’s what I help Connecticut teachers answer.
Want to See If Paying $0 in CT State Income Tax Is Realistic for You?
I work with Connecticut teachers to map out retirement income intentionally — so taxes don’t quietly erode the lifestyle they worked decades to build.
If you’re approaching retirement and want to know whether zero state income tax is achievable in your situation, that’s exactly the conversation we start with.
About the Author
Marc Lowe, CFP® is a fee-only fiduciary advisor based in Waterford, CT, helping retirees & business owners make smarter financial decisions.
The information presented in this Presentation is the opinion of the author and does not reflect the views of any other person or entity unless specified. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services offered through In The Money Retirement, an investment adviser registered with the state of Connecticut. The information linked to on third-party sites is being provided strictly as a courtesy and convenience. When you link to any of the web sites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of information provided at these websites. When you access these websites, you are leaving our website and assume any and all responsibility and risk for use of the web sites you are visiting.The tax and estate planning information offered by the advisor is general in nature. It is provided for informational purposes only and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.
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