Best States to Retire

When you’re about to retire, it is crucial to consider where you’ll spend your time after achieving this life goal. When looking at a list of the best states to retire, your opinion may differ from someone else’s. Thus, you must consider several factors:

• What do you want your lifestyle to look like in this new chapter?
• What kind of retirement fits your budget?
• Are you looking to stay close to the state where you currently reside?
• How does the proximity of your loved ones weigh into your decision?

Regardless of your plans or preferences, everyone is looking for the same thing: the best. From taxes to lifestyle and more, we’re going over what matters most to the future retirees and pinpointing the best states in which to retire.

Where is the Best State To Retire?

In regards to the question of which state is the best in which to retire, the answer can vary widely. This is because future retirees’ wants and needs vary just as much. You won’t enjoy retirement sitting in the mountains if you love the beach, no matter how good the tax breaks are.

Of course, aspects like healthcare, quality of life, and social opportunities still require consideration. Yet, to maximize your retirement, you must look at the full picture.

Best State to Retire: A Look at Lifestyles

Before breaking down the financial considerations and complex data, it’s essential to consider your lifestyle. For example, if you’re looking to enjoy the fresh mountain air, spending your golden years in southern Florida won’t do you any good. The best states to retire will provide a balance of practicality and your passions.

For social retirees, you will want to consider which states have the best retirement communities. A few standouts should be no surprise, including Florida, which is known for The Villages, California, which offers the Valle Verde Retirement Community, and even Sun City in Arizona.

Looking at the overall senior populations in each state can showcase the percentage of fellow citizens that are also enjoying their golden years¹.

Senior Populations by State:

1. Florida (20.1%)
2. Maine (20.0%)
3. West Virginia (19.4%)
4. Vermont (18.8%)
5. Delaware (18.2%)
6. Montana (18.2%)
7. Pennsylvania (17.8%)
8. Hawaii (17.8%)
9. New Hampshire (17.5%)
10. South Carolina (17.2%)

David Bakke, a Financial Expert at DollarSanity², weighs in on how he helped his mother choose Florida as the best state for her retirement: “My family started out in Ohio. My father died a few years back. So at that point, I went to work with my Mom on where to retire. We took into account a variety of factors, such as healthcare, cost of living, safety, and taxes. At the end of the day, we chose Florida, and she has been comfortably retired there ever since.”

A sense of community can be important for those retiring and even help maintain positive mental health in your golden years. As Bakke says of his mother’s choice: “The environment (in Florida) is conducive to elderly folks (and) also played a role.”

When someone is looking to live their best, post-career life, this aspect should factor into their considerations when choosing the best state to retire. Next, let’s look at the best states to retire for taxes.

Best State To Retire for Taxes

Life after retirement still requires money management – especially when living on a fixed income. One of the most significant areas of concern for retired people is dealing with taxes. But when determining the best states to retire for taxes, it’s important to remember that tax bills come in many shapes and forms.

Types of Taxes to Consider:

• Estate and inheritance taxes
• Sales taxes at both state and local levels
• Property taxes
• Income tax rates

These differing tax rates are essential as renters may not be as concerned about property taxes, but sales tax can be a more significant factor. If you choose to work after retirement, you’ll still have to consider income taxes, whereas estate taxes are essential for anyone leaving their loved ones an inheritance. The best states to retire in for taxes are as follows³.

Best States to Retire for Taxes:

1. Delaware
2. Hawaii
3. Colorado
4. Wyoming
5. Nevada
6. South Carolina
7. Washington D.C. (District of Columbia)
8. Arizona
9. Idaho
10. Tennessee

Marcus Arcabascio, Chief Financial Officer of USA Credit Unions, spotlights Delaware as one of the best states to retire for property taxes, “Delaware is an excellent option for retirees. There are low property taxes here, making it ideal (for purchasing) a home.”⁴

Additionally, property taxes are not the only tax perk of living in the First State. “(Delaware) is also one of the few states with no sales tax,” Arcabascio continues, “The tax exemptions are not just limited to property. There are no inheritance taxes either, making it easier for retirees to plan for the future. If I were to pick a tax-friendly state to retire in, I would unquestionably pick Delaware.”

Overall, Delaware takes the lead as one of the best states to retire for taxes but its cost of living is higher than the national average. Still, Delaware’s cost of living is dwarfed by the those of Hawaii, New York, California, and several other states.

Thus, considering many economic factors is critical to choosing where to live in your golden years. Knowing the best states to retire tax-wise should weigh into your decision, but your research shouldn’t end there.

Best State To Retire on a Fixed Income

When you’re living on a fixed income, the primary financial factor to consider when choosing the best state to retire is a low cost of living. If you’re looking to enjoy your golden years in states with the lowest cost of living, here’s where you’ll find them⁵.

States with the Lowest Cost of Living:

1. Mississippi
2. Oklahoma
3. Kansas
4. Alabama
5. Georgia
6. Ohio
7. Iowa
8. West Virginia
9. Indiana
10. Arkansas

As it is the state with the lowest cost of living, Mississippi stands out as one of the best states to retire on a fixed income. Housing, grocery, utility, and transportation prices make up the cost of living, and are all notable factors that affect everyone. The cost of healthcare is also important for retirees, which Medicare and other benefits such as Medicare Supplement plans can help keep low.

Best States To Retire on Social Security

Making sure your Social Security benefits go further is essential for all retirees. In the circumstance that they are your sole source of income, you must take extra considerations into your destination.

Your cost of living can be affected by personal choices, but when it comes to the essentials, covering your expenses is important. While there are plenty of options, the list of best states to retire on Social Security is heavily based in the Midwest as well as the South⁶.

Best States to Retire on Social Security:

1. South Dakota
2. Missouri
3. Alabama
4. Oklahoma
5. Kansas
6. Wyoming
7. North Dakota
8. Mississippi
9. Arkansas
10. Iowa

The methods used to determine this involves the overall cost of living. It compares the cost of renting a one-bedroom apartment in each place. While this can be a great benchmark, homeowners can have varying experiences.

Furthermore, there are several other economic factors everyone needs to remember. For example, the cost and accessibility of healthcare can be difficult in a variety of the states listed above when compared to other states throughout the country.

Best States To Retire With a Pension

Pensions are becoming less and less popular for several reasons, but for those reliant on this form of income, it’s important to consider where you spend your retirement. Each pension will vary, and there are several considerations to keep in mind:

• Many pensions are not transferable when moving to another state. This is because the funding of each pension is pooled together for those contributing within a certain state. Therefore, you’ll want to understand whether you’d lose the money you’ve worked for.
• Similarly, the pensions that are transferable may have penalties attached to them when transferring them. This is yet another reason it’s important to check into the details of your pension fund and understand what parameters apply.
• While not ideal, the best places to retire in the United States all have positive features besides financial aspects. Everyone will also be in different financial positions. If you are capable of affording to without your pension, you may want to focus on moving to a state you can enjoy and afford.

It’s always important to speak with a licensed financial advisor before making decisions that can affect your pension or outline the details of your financial health. But it’s a conversation worth having. Many of the best states to retire can offer non-financial benefits and, depending on your preferences and financial situation, you may be more comfortable leaving your pension money on the table.

There is no replacing the tranquil beach towns of Rhode Island, the sportsman opportunities of Louisiana, or the stunning views in Utah. If you can afford to move, there are plenty of options that may make it worth giving up your pension.

What State Is Best Financially To Retire In?

Michigan tops the list of states where it is financially best to retire. Here are ten great options that focus on providing affordability for retirees⁷:

States That are Financially Best to Retire:

1. Michigan
2. Tennessee
3. Missouri
4. Mississippi
5. Kentucky
6. Oklahoma
7. Georgia
8. Arkansas
9. Texas
10. Alabama

You will notice some overlap with the lists above; the metric of affordability is similar to the cost of living. However, these metrics consider the best states to retire for taxes and cost of living.

Combining both can help provide a more well-rounded scope of how much retirees can expect to pay. For example, you’ll note that Bankrate’s subcategory of the tax burden identifies Alaska as a great choice for retirees. Overall, however, the state sits at 36 for affordability.

What Are the Best States for Seniors To Retire In?

Early retirement is the dream of most of us. Sure, some prefer to remain within their careers for the long haul, but for the most part, it’s the dream of millions of workers to hang up their work boots and kick up their feet.

For some, the ideal location to do this might be a quiet town in the Midwest with a strong sense of community and small-town living. Others seek warmer weather, which is one of the many reasons Florida is top-of-mind when people think of the best states to retire. Alas, most of will have to wait until we reach our golden years to start thinking about retirement.

When searching for the best states to retire, money may be an important factor, but it isn’t everything. Here are several key metrics ranked, with ten being the highest, that seniors truly care about for their retirement ⁸.

• Quality of life (8.4)
• Cost of housing (8.2)
• Quality of healthcare (8.2)
• Crime rates (8.2)
• Healthcare cost (8.1)
• Public health (including COVID-19 response) (7.7)
• Taxes (7.6)
• Costs not associated with housing (7.5)
• Weather patterns (7.3)
• Proximity to family (7.2)
• Walkability (6.6)
• Resistance to climate change (6.1)
• Political environment (5.9)
• Diversity and equality (5.8)
• Proximity to airport (5.0)
• Public transit (4.8)

The methodology was a survey of 1,500 seniors in America. Each person surveyed rated each factor out of ten to find which issues mattered most. Each factor is essential for its own reason and will affect how retirement is spent.

For example, with changing weather patterns continuing to emerge, living in the West has become difficult for many as water becomes more scarce and the heat intensifies. On the other hand, inflation and economic trends continue to change the costs seniors will face from state to state.

With these issues pulling the most important for seniors looking to retire, they aggregate to help provide a multi-faceted approach to what it means for a state to one of the best places to retire in the U.S.:

1. Ohio
2. Iowa
3. Minnesota
4. Florida
5. Nebraska
6. Virginia
7. Texas
8. Maryland
9. Georgia
10. Indiana

According to James Wang, a CPA at CreditYelp⁹, “Ohio is the ideal state for retirees. It is the most affordable and friendly, even for those with moderate financial power. Ohio also has reduced taxes for state residents and doesn’t tax veterans” (on their income at the state level).

Wang continues, “The housing costs are reasonable, and the state has a lower-than-average crime rate. Overall, Ohio offers an excellent quality of life.”

Best States for 100% Disabled Veterans To Retire

Retirement works a bit differently for some, and a prime example is the military community. Unfortunately, one of the requirements for this nation’s heroes is to serve by putting their bodies in harm’s way, which can lead to adverse health effects.

The U.S. Department of Veterans Affairs (VA)¹⁰ has criteria for eligibility based on a rating system for determining a veteran’s disability level. Veterans with a 100% disability status can qualify you for specific benefits, including compensation from the VA, Supplemental Security Income (SSI), and/or Social Security Disability Insurance (SSDI)¹¹.

Healthcare is important for everyone, but when determining the best states for 100% disabled veterans to retire, it can be paramount. Fully disabled veterans should look at states with affordable healthcare and access to VA healthcare facilities. Here are the top options available for disabled Veterans¹²:

States with the Highest Number of VA Health Facilities per Number of Veterans:

1. New York
2. California
3. Wyoming
4. Montana
5. Texas

Overall Healthcare for Veterans:

1. Connecticut
2. Minnesota
3. New York
4. Massachusetts
5. Pennsylvania

Amber Dixon, CEO of Elderly Assist Inc.¹³ recommends the Empire State: “…the state with the best healthcare outcomes is New York. I would recommend it for two reasons: one (is) because it has a large and diverse population, which means that there are more patients who can be studied and compared to each other. Two, because New York has an extensive network of hospitals and medical centers throughout.”

Dixon clarifies how this benefits retirees in New York: “This makes it easier for researchers to conduct studies on health outcomes in different parts of the state.”

For most individuals living in the United States, Original Medicare (Part A and Part B) are health benefits that become available after turning 65. However, for disabled persons, coverage may be available sooner.

Those on Medicare can also opt for a Medicare Advantage plan, which can help you enjoy a more complete form of coverage through your benefits. Below is a list of the states with the most Medicare Advantage plans available¹⁴.

States with the Highest Number of Available Medicare Advantage Plans:

1. Florida: 369
2. California: 326
3. Texas: 221
4. New York: 186
5. Pennsylvania: 184
6. Ohio: 147
7. Illinois: 146
8. Washington: 140
9. Georgia: 110
10. Indiana: 108

It’s important to note that while veterans that receive a 100% disability rating from the VA may qualify for Medicare, there are some additional requirements. This includes:

• Qualifying for SSDI under 65 and collecting benefits for at least 24 months.
• Holding a U.S. citizenship or legal residency for at least five years.

Even with a 100% disabled rating, you still don’t automatically qualify for SSDI benefits and must apply and be approved. But if you obtain SSDI and are on it for at least 24 months, Medicare benefits can become yours regardless of age.

Best States To Retire for Healthcare

Taking care of yourself after retirement can become an excellent focal point. It’s important to consider the healthcare in any state when looking to enjoy your golden years. Get to know the states that rise above when it comes to healthcare for retirees¹⁵:

Best States to Retire for Healthcare:

1. North Dakota
2. Florida
3. Ohio
4. Michigan
5. Maryland
6. Colorado
7. Pennsylvania
8. Connecticut
9. Utah
10. South Dakota

If you are prone to health issues, the states above can offer retirees the best hospital options. However, there’s a flip side to consider. Here are the ten worst states providing hospital care. Note that being higher on this category’s list, unfortunately, means your state is one of the unfortunately.

Worst States for Retiree Healthcare:

1. Mississippi
2. Alabama
3. Arkansas
4. Tennessee
5. Kansas
6. Vermont
7. Oklahoma
8. Hawaii
9. Wyoming
10. South Carolina

Healthcare costs and accessibility are essential when considering the best states to retire. So is understanding your benefits. Medicare Part A is available for many retirees and helps cover hospital care.

Best State To Retire and Buy House

The next chapter of your life can often inspire change. You must consider housing whether you are moving within your current state or into a new one. This means that for homeowners to understand the cost of purchasing a home, location is an important factor. For example, in California, you’ll pay more than anywhere else in the country, with a median value of $648,100, compared to New Mexico, which has a median value of $214,000. Here are the ten states with the lowest costs¹⁶.

States with Lowest Median Home Price:

1. West Virginia ($143,200)
2. Mississippi ($145,600)
3. Arkansas ($162,300)
4. Oklahoma ($168,500)
5. Alabama ($172,800)
6. Kentucky ($173,300)
7. Iowa ($174,400)
8. Ohio ($180,200)
9. Indiana ($182,400)
10. Kansas ($183,800)

As you can see, determining the best states to retire brings up many questions. For some, regular healthcare is important, and for others, finances carry more weight. Overall, the best states to retire will strike a balance and create a better quality of life after working hard for this chapter.

Sources:

1. Elderly Population in U.S. by State, Consumer Affairs. Accessed March 2023. https://www.consumeraffairs.com/homeowners/elderly-population-by-state.html
2. David Bakke, DollarSanity. Accessed April 2023.
3. 10 Most Tax-Friendly States for Retirees, Kiplinger. Accessed 2023. https://www.kiplinger.com/retirement/601814/most-tax-friendly-states-for-retirees
4. Marcus Arcabascio, USA Credit Unions. Accessed April 2023
5. 13 States With the Lowest Cost of Living, Ramsey Solutions. Accessed March 2023. https://www.ramseysolutions.com/real-estate/cheapest-states-to-live-in
6. 10 Best States To Live on Just a Social Security Check, GoBankingRate/Yahoo! Finance. Accessed March 2023. https://www.yahoo.com/now/10-best-states-live-just-120001007.html
7. The best and worst states for retirement 2022, Bankrate. Accessed March 2023. https://www.bankrate.com/retirement/best-and-worst-states-for-retirement/#full-results
8. The Best States to Retire, Based on What People Really Want, The Motley Fool. Accessed March 2023. https://www.fool.com/research/best-states-to-retire/
9. James Wang, CreditYelp. Accessed April 2023.
10. About VA disability ratings, U.S. Department of Veteran Affairs. Accessed March 2023. https://www.va.gov/disability/about-disability-ratings/
11. SSI Federal Payment Amounts For 2023, SSA. Accessed March 2023. https://www.ssa.gov/oact/cola/SSI.html
12. Best & Worst States for Military Retirees, WalletHub. Accessed March 2023. https://wallethub.com/edu/best-states-for-military-retirees/3915
13. Amber Dixon, Elderly Assist Inc. Accessed April 2023.
14. Medicare Advantage Plans, by Plan Type, KFF. Accessed March 2023. https://www.kff.org/medicare/state-indicator/plans-by-plan-type/?activeTab=map&currentTimeframe=0&selectedDistributions=total-number-of-medicare-advantage-plans&sortModel=%7B%22colId%22:%22Total%20Number%20of%20Medicare%20Advantage%20Plans%22,%22sort%22:%22desc%22%7D
15. Hospital Care: Does Your State Rate?, WebMD. Accessed 2023. https://www.webmd.com/a-to-z-guides/features/state-hospital-care-rated
16. U.S. Census Bureau. Accessed March 2023. https://www.census.gov/