Affordability Total Points: 40
- Note: This metric is based on WalletHubs “States with the Highest & Lowest Tax Rates” ranking.
- Retired Taxpayer-Friendliness: Full Weight Note: This metric measures taxation on retirement income, property and purchases, as well as special tax breaks for seniors.
- Tax-Friendliness on Estate or Inheritance Tax: Full Weight
- Annual Cost of In-Home Services: Full Weight
- Annual Cost of Adult Day Health Care: Full Weight
Best States To Retire
Retirement might be the end of your career, but it doesnt have to be the end of financial security or life satisfaction. Retirement generally coincides with the age at which we may receive Social Security or pension benefits. However, not everyone can retire when they want to. In fact, 27% of non-retired adults havent saved any money for retirement, though not necessarily through any fault of their own.
But in addition to when to retire, a good question to ask is where. Finding the best states to retire can be difficult without doing lots of research. Even in the most affordable areas of the U.S., most retirees cannot rely on Social Security or pension checks alone to cover all of their living expenses. Social Security benefits increase with local inflation, but they replace only about 40% of the average workers earnings.
If retirement is still a big question mark for you because of finances, consider relocating to a state that lets you keep more money in your pocket without requiring a drastic lifestyle change. To determine the best states to retire, WalletHub compared the 50 states across 47 key indicators of retirement-friendliness. Our analysis examines affordability, health-related factors and overall quality of life.
Note: With the exception of Total Score, all of the columns in the table above depict the relative rank of that state, where a rank of 1 represents the best conditions for that metric category.
What About Retirement Lifestyle
Money isnt everything in retirement theres no point in having money if you cant spend it on a lifestyle that makes you happy, such as being able to roam in nature or go out to nice dinners, shows, and museums. Many of us wont have unlimited funds when we reach retirement age, so we may need to make sacrifices and relocate.
Its impossible to say with any real conviction which states offer the best lifestyle for retirees since its such a subjective decision. Are you a big city person? Or do you prefer the quiet of a small town? Or maybe youd prefer a secluded country retreat? Which states offer the best lifestyle is really going to depend on you.
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The 10 Best Places To Retire In Indiana
For years, youve worked in an office anticipating the day when you could enjoy an unbeatable retirement. Indiana will deliver with its beautiful scenery, all four seasons, and bustling cities with exciting cultures. Retiring in Indiana means making the lifestyle you focused on to get you through long days of work a reality.
NewHomeSource has compiled the top 10 cities to retire in Indiana. Explore these fantastic cities and browse their 55+ communities to find the perfect place for your perfect new home during this exciting new chapter in your life.
The 10 Best States To Retire Plus 5 To Avoid
Most people save for a lifetime so they can enjoy their retirement years. However, those savings go farther in some states than others. Millions of Americans are reaching retirement age each year, and many of them are making decisions about where to retire. Some choose to remain in the same place for various reasons, like having family nearby. However, others decide to retire at the beach or another favorite spot. For those choosing to relocate for retirement, affordability is often one of their biggest concerns. Other concerns include crime rates, health care options, and available activities. Weve put together a list of the ten best states to retire, and weve also included five that you should avoid. Keep reading for all the details.
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Best States For Retirement
We gathered data on housing costs, state taxes, health care availability and quality of living specifically affecting retirees. Finally, we took a look at data for all 50 states, including the:
- Percentage of the population over age 65
- Affordability index, taking median income and home prices into consideration
- Available parkland, a strong indicator of opportunities for activities
- Retirement Living rating scale from 1 to 5, with 5 being highest
We parsed the data to find the 10 best retirement destinations and 10 worst states for senior living. Youll find those states listed below with the pros and cons of each. We recommend consulting with a financial planner before retiring to another state.
Houses Are Affordable In Arizona
According to Zillow.com, the median home value in Arizona, as of early 2021, is $314,071 which is slightly higher than the median value for the United States . Compare that to $382,096 in New Jersey and you can see that, generally speaking, homes in Arizona are much more affordable. Arizonians also pay very little in property taxes compared to other states . Based on the median home value, the average annual tax bill is $1,499 .
According to insurance.com, homeowners insurance in Arizona is relatively inexpensive.
The national average cost for a homeowners policy for a $300,000 dwelling with a $1,000 deductible and $300,000 worth of liability coverage is $2,305. The average rate for Arizona is $1,97629 other states, including Florida are more expensive.
Since housing expenses are the biggest expenses for retiree households, Arizona can help many people reduce this expenditure.
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The Best States To Retire In
Top States To Retire In
When it comes to retirement, where you choose to settle down can make all the difference. The state you live in will have a huge impact on your quality of life, financial situation and even your ability to stay active and get outdoors.
So when youre trying to decide on a retirement location, there are a few key factors to consider. The weather, cost of living, wellness, culture and crime rate are all things that will impact your ability to enjoy your retirement to the fullest.
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The Quality Of Healthcare In Arizona Is A Mixed Bag
We queried various research studies on the quality of healthcare by state. While each study had different benchmarks, the results were similar Arizona ranks in the middle or at the top part of the bottom third and is quite comparable to Florida.
To be more specific, WalletHub ranked the state of Arizona as the #41 best state the Agency for Healthcare Research & Quality , an agency within the United States Department of Health, currently ranks Arizona average at best and the state is ranked 21st by the U.S. News & World Report.
Despite the not-so-stellar rankings, thats not to say there arent any high-quality hospitals in the state. The Mayo Clinic, consistently ranked as one of the top hospitals in the United States, has a location in Phoenix and is in the midst of a $700 million expansion. Heres a recent list of Arizonas top-ranked hospitals.
The Best States To Retire In 2021
According to Bankrates study, Georgia is the best state to retire, followed by Florida, Tennessee, Missouri and Wyoming. Maryland, on the other hand, held last place in our ranking. The state was dragged down by a lack of affordability and by mediocre scores on culture and weather.
Why should retirees pull the moving van off Interstate 75 and unpack in Georgia? Affordability is one big selling point. The state combines a low cost of living and a light tax burden to rank No. 3 in affordability.
Weather is another strong point. The state has an average annual temperature of 64 degrees, fifth-warmest in the nation. Earthquakes are rare, and tornado risk is about average. The one downside is hurricanes Georgias small coastline puts it at risk of tropical cyclones.
Georgia places in the middle of the pack in our rankings of wellness and crime. The states only weak spot is in the culture category the Peach State has one of the nations lowest percentages of over-65 residents, and it ranks near the bottom in arts and entertainment establishments per capita, based on a Bankrate analysis of Census data.
The rest of the top five:
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We Asked People What They Prioritize In A Place To Retire Then Ranked All 50 States Based On Those Priorities
One of the biggest questions in retirement planning is where to retire. Nearly 400,000 Americans moved states explicitly because of retirement in 2019 alone. And millions of Americans over 55 moved across state lines to warmer climates in Florida, Arizona, Texas, California, and other states typically thought of as retirement destinations.
Of course, deciding where to retire is more complicated than picking a state that has reasonable summers, mild winters, and plenty of sunshine. Even with a solid retirement fund, the cost of housing, healthcare, and other factors are still important.
To determine the best places to retire, The Motley Fool surveyed 1,500 Americans aged 55 and over about what they think the most important factors are when choosing where to retire.
The Motley Fool ranked all 50 states for retirement based on their responses.
States With No Income Tax
Eight states don’t impose an income tax on earned income as of 2021: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes only dividend and interest income, so you can hold down a side job here without it costing you in taxes. Tennessee also taxed just dividend and interest income through the tax year 2020. It repealed its tax effective January 1, 2021.
States that lack an income tax might seem like a good option, but many collect revenues in other ways. They might have steep property or sales taxes. These can offset the lack of an income tax.
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Where Should I Retire
There are many factors to consider when deciding where to retire. Often, family and friends are the leading considerations, as well as factors such as access to sports, cultural activities, etc. But, you should also consider costs like housing and healthcare, as well as the tax-friendliest of the location.
Best And Worst States For Health Care If Youre A Retiree
Utah is the healthiest state for seniors and Mississippi is the least healthy according to a 2021 survey by the United Health Foundation. The foundation publishes Americas Health Rankings each year.
The rankings use 34 measures to produce the foundations Senior Report, comparing how the states stack up to one another on health care for seniors. The measurements in the report are spread across five categories: individual behavior, community and environment, policy, clinical care, and all outcomes for health conditions.
In 2021s report, the top-ranked states are spread around the country in the West and Northeast. Those that ranked the lowest were concentrated in the South.
The 5 Best and Worst States for Senior Health Care, 2021
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Best States For Senior Health
To measure the health of each states senior population, United Health Foundation ranks states according to the World Health Organizations definition of health: Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.
The foundations Americas Health Rankings Senior Report analyzes the nations senior population on a state level using 35 measures of senior health across six categories.
- Behaviors, such as smoking and drinking
- Macro-level community and environment, such as the quality of nursing homes
- Micro-level community and environment, such as poverty-related threat of hunger
- Policy, such as prescription drug coverage
- Clinical care, such as health screenings and vaccines
- Outcomes, such as hip fractures and premature death
In the 2016 Senior Report, Massachusetts came out on top, followed by Vermont, New Hampshire, Minnesota and Hawaii.
Louisiana was at the bottom of the list, hindered by a high prevalence of smoking, obesity, and physical inactivity.
States With The Best And Worst Climate
Your overall comfort and quality of life in retirement are heavily influenced by the activities you undertake. States with mild weather afford more opportunity for outdoor activities. If you like being outdoors, the climate of the state in which you live is important to your physical and mental well-being.
The average number of sunny days in the United States is 205 a year, according to Sperling.
The top five states for the annual number of sunny days are:
- Arizona: 286
- Alaska: 121
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Where Should We Go
The most common locales for Americans retiring abroad are Central and South America for several reasons: close proximity to the US, low cost of living, and fabulous year-round climate. Europe is also a popular destination for its culture and relative safety.
Here is a list for the 2017 Annual Global Retirement Index by International Living:
Here is the same source but a few years earlier. You can see how the countries moved in four years.
As mentioned, the warm locales of the Caribbean and Central/South America are one of the obvious first choices for American retirees. This may be a great option for cost and proximity, but it’s not for everyone in terms of culture/ease of living. Retirees who don’t speak the language may find it difficult to adjust. The Latin lifestyle is very laid back. When a plumber says he will be there at 9am, it’s not uncommon for them to show up at 2pm or even later. If you’re someone who would not be able to tolerate this, those types of locations may not be for you. Another concern is safety, as many of these countries have a much higher rate of violence than the US.
Europe is also a popular destination. However, in terms of economics, it can be just as pricey as the US. Relatively speaking though, it’s safer and more “First World” than Central or South America.
In the end, retiring abroad is not for everyone. But it could extend your retirement funds another decade or more and mean the difference between retiring at 60 and retiring at 70.
States With The Lowest Sales Taxes
Only four states don’t have a sales tax as of 2021: Delaware, Montana, New Hampshire, and Oregon. Alaska comes close. It doesn’t impose a state sales tax. But it does allow cities and counties to levy sales taxes at an average rate of 1.76%.
After Alaska, the four states with the lowest combined state and local sales tax rates as of 2021 are:
- Hawaii: 4.44%
- Wisconsin: 5.43%
- Maine: 5.5%
The five states with the highest combined state and local sales tax rates as of 2021 are:
- Tennessee: 9.55%
- Alabama: 9.22%
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Arizona For Arthritis Asthma And Allergy Sufferers
For those of you considering Arizona because you suffer from arthritis, you should know that, according to the Cleveland Clinic, the weather has some impact on arthritis, but not as much as most think. However, the good news is that you wont get much of any cold, wet weather in Arizona .
The same can be said about retirees with asthma and allergies. While many factors that can cause asthma, air pollution can be one of the leading causes. According to the American Lung Associations 2020 State of the Air Report, Phoenix-Mesa continues to be in the top ten of most polluted cities therefore where you reside in Arizona can make a big difference.
In regards to allergies, many people choose to move closer to the desert, believing that there are fewer pollen-releasing plants. The opposite is actually true. There are plenty of plants in Arizona that induce allergies in addition to the dust storms, which are especially prevalent in the Phoenix-Tucson corridor.
The best advice here is to spend some time in Arizona and see how your health fares before basing part of your decision on such factors.