Retirees in these states should be glad to avoid state taxes, but they must also consider the federal tax implications.

Location can also play a role because certain states tend to have higher incomes and subsequently higher Social Security payments.

If you earn enough during your career, however, you could receive a lot more from Social Security when you retire. The maximum retirement benefit this year is $4,873 per month, or $58,476 annually. That's about the same as the median income in the United States. And that amount will climb over time thanks to annual cost-of-living adjustments.

Though Social Security is in no danger of insolvency, the prospect of a big benefit cut is very much on the table.

The Social Security Fairness Act was proposed to reverse the rules surrounding the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

House lawmakers have the signatures they need to prompt a vote on a bill that would eliminate rules limiting Social Security income for pensioners.

HR 82 would eliminate the Windfall Elimination Provision, called WEP, and the Government Pension Offset, or GPO, sections of the Social Security law that curbed benefits for about 2.8 million public employees.