When combined with the potential for benefit cuts early next decade, the rising cost of Medicare could become a huge burden on many senior households. Unless Congress acts to change Social Security, improve its health, and ensure its longevity, many will see their budgets severely reduced over the next seven years.

Eliminating state income taxes on tips, overtime and Social Security was a priority for House Republicans in the recent budget negotiations.

Most states offer at least one tax break to retirees but some exempt multiple forms of retirement income and eight states have no income tax at all.