Which State Has The Lowest Cost Of Living For Retirees


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Aging in place, instead of moving to a new community, can be beneficial both financially and socially, Pederson says. Aging in place also allows retirees to keep the friendship connections they have developed in their home community.

Where to settle is a big life decision and hard to undo, says Rui Yao, a professor and director of graduate studies in the personal financial planning program at the University of Missouri. One common mistake is to overweigh one or two positives and overlook the whole picture.

To rank all 50 states for retirees, WalletHub compared them across three key dimensions:

  • Affordabilityincludes adjusted cost of living, taxes, , cost of in-home health care and adult day care and share of people over 65 who could not afford to see a doctor.
  • Quality of lifethis includes a broad range of factors such as weather, air and water quality, beaches and shorelines, access to scenic byways, golf courses, museums, theaters, crime rates, food insecurity, volunteer activities and the number of people over 65 at risk of isolation, who are working, in poverty and other factors.
  • Health carethis includes the number of doctors, dentists and nurses per capita, quality and number of hospitals, well-being index, life expectancy, and share of population over 65 who are physically active, obese, in good health, or with poor mental health.

Based on WalletHubs research, here are the best states to retire, followed by the worst.

Georgia The Empire State Of The South

In many respects, Georgia is the cheapest state to live in for retirees. The cost of living here is well below the national average almost 10 percent lower if youre a retiree. One example of its affordability is seen in the extremely low housing costs according to a list of the best places to live, with median costs for a home running at almost 20 percent less than the national average. Plus, the state is as retirement friendly as anyone could hope when it comes to tax benefits. Did you know that Georgia does not tax Social Security retirement benefits, or that the state provides a deduction of $65,000 per person on all types of retirement income for anyone age 65 or older?

And of course, you have Atlanta, the cultural and economic mega-center of the entire Southeast Region. If you miss the buzz of the city, Atlantas streets are filled with youthful energy thats typical of a city thats on the go, constantly enriched by an exciting blend of traditional, global, and modern cultural trends.

Cost Of Living Calculator

Whether youre moving for a job or relocating in retirement, our cost of living calculator can help you evaluate how much itll cost you to live in your new destination.

For instance, compare costs related to major budget categories like housing, groceries, utilities, transportation, health care, other goods and services and home and auto insurance. You can compare any two factors side-by-side.

Our cost of living calculator also provides a salary youll need to maintain your current standard of living. Knowing what youll need to earn to maintain your lifestyle gives you critical information to see if its worth it to move to that area.

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When Should I Retire

The choice to retire is yours whenever you have the financial means to do so, but its not always possible. A whopping 40% of people reported having to retire earlier than planned, primarily due to healthcare issues or changes at their work according to the Employee Benefit Research Institute .

FYI, the ERBI reports that the median retirement age is 62.

Alabama The Heart Of Dixie

Which States Are Most Affordable to Live in  Land of Maps

You simply cant beat Alabama for affordability . But what many people dont realize is that its also full of hidden treasures, too the kind that make life worth living. Take, for example, the warm weather, a thriving music culture with decades of music history behind it, Southern hospitality, and amazing food.

And as for recreation, well if you like water then youre in for a bonanza. Alabama is home to the nations second-largest inland waterway system, the Gulf Intracoastal Waterway. Then theres the coastline on the Gulf of Mexico. It has beaches and a unique state program for artificial reefs that make fishing a main attraction here.

The northeast part of the state is completely different, at elevation of over 1,800 feet in the Appalachian Mountains. The Appalachian Trail may start in Georgia but the mountain range begins in the heart of Alabama. Known locally as Coosa Valley, the area is covered with trails, wildlife, and spectacular vistas and views. There are Forever Wild lands extending for thousands of square miles, making this a truly beautiful state to call home.

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Best And Worst States For Retirement In 2021

Choosing where to retire is an important decision that directly impacts your financial and mental well-being. Youll want to consider factors such as cost of living, quality of healthcare, taxes and quality of life. Gathering and analyzing the most critical data from all states to determine where to retire can take many days to complete. We surveyed our readers and crunched the numbers to find the best and worst states for retirement in 2021.

Our analysis will help you find the best states for retirees and the states to avoid. We considered our survey respondents comments, then researched that information to confirm validity. We gathered data for taxes and other living expenses that affect retirees. Finally, we took a look at other data for all 50 states, including:

  • Affordability: Median Income, Average Home Price, Top State Tax Rate & Cost of Assisted Living
  • Quality of Life: Percentage of Population Over 65, Percentage of Population in Poverty and Parkland by Acre
  • Healthcare: Number of Hospitals Per 100,000, Number of Hospital Bed Per 100,000, Number of Physicians Per 100,000 and Number of Dentists Per 100,000
  • Retirement Living rating

We parsed the data to find the top 10 retirement destinations and 10 states to avoid. Youll find those states listed below, with the pros and cons of each, gathered from survey results. We recommend consulting with a financial planner if you want to retire to a state thats less retirement-friendly.

The 13 Best States To Retire

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.

Here are the 13 best states to retire in the U.S.:

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States With Lowest Cost Of Living 2022

Let’s face it: everyday life can be expensive. We’re not talking about taking extravagant trips, purchasing your children’s Christmas gifts, or even facing an emergency like a broken-down car. We’re talking about everyday life.

The cost of living considers several necessary expenses that most of us need to live from day to day. The cost of living includes housing, food, childcare, educational costs, transportation costs, and medical costs.

Depending on where you live in the world, your cost of living varies. Even within the United States, the cost of living varies from state to state. Living in New York City, for example, is far more expensive than living in a rural town in Nebraska. A 3,000-square-feet home with an inground swimming pool in a small town may be the same price as a studio apartment in a big city. This example shows the differences in the cost of living.

Determining the cheapest states to live in is complex as it requires consideration of many factors. By looking at the cost indices for Groceries, Housing, Utilities, Transportation, Health Care, and Miscellaneous costs, and overall cost of living index can be calculated for each state. The three most expensive states in the U.S. are Hawaii, the District of Columbia, and California.

The 10 Best States In The Us To Spend Your Retirement In 2022

Top 50 cheapest places to retire in the US

It’s not easy deciding where you’ll spend what will hopefully be some of the most relaxing years of your life.

Here with some help is personal finance website WalletHub, which has a new report ranking the best and worst U.S. states to retire in based on factors like affordability, quality of life and health-care. While some scenic destinations top the list, like sunny Florida and mountainous Colorado, the bottom of the list features two of the most populated states in the northeast.

The worst state in the U.S. for retirement is New Jersey, followed by Mississippi and New York, based on WalletHub’s findings. Money concerns play a big factor in those low rankings, with New York ranking as the least affordable state and New Jersey following right behind, whereas Mississippi ranks at the bottom in terms of the quality of life, according to WalletHub.

It’s no surprise that money is such an important consideration when choosing the best place to spend your retirement years. After all, 26% of non-retirees have no retirement plan at all, according to a 2021 report by the Federal Reserve.

Still, on average, people across the U.S. have roughly $400,000 dollars to nest on. That number is higher in states like Connecticut, where the average person has a retirement balance of roughly $520,000.

Check out WalletHub’s 10 best states for retirement to get the most out of your golden years:

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Cost Of Living In Arizona

Despite nearly year-round sunshine and gorgeous landscapes, the cost of living in Arizona is about on par with the national average, if not slightly cheaper. Thats likely due, in part, to the extreme heat that residents have to deal with for a good portion of the year.

In fact, summer temperatures range from 90 to 120 degrees Fahrenheit. Plus, much of the landscape outside of major metropolitan areas such as Phoenix can be pretty barren.

If you dont mind the desert environment, youll be pleased to find affordable housing and relatively low costs for goods and services in Arizona.

Cost Of A College Education

Finally, dont forget about the Tennesse Promise. It is a unique program that furthers Tennessee as one of the best cheap states to live in.

Tennessee Promise is both a higher education scholarship and mentoring program. It is focused on increasing the number of students that attend college in the state. And encouraging their success in school.

The program provides students a last-dollar scholarship to attend community college.

What this means is the scholarship will cover tuition and fees not covered by the Pell grant, the HOPE scholarship, or state student assistance funds.

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States Where Your Retirement Will Cost Less Than $45000 A Year

If you’re thinking about relocating to somewhere cheaper in retirement, you’re not alone many Americans lack sufficient retirement savings to afford the cost of living in their home states after their working years are over. Moving to a more cost-effective area can help stretch your funds further in retirement, alleviating some uncertainty about your financial future.

Find Out: How Long Will Your Retirement Savings Last?

To help you choose the perfect place to retire, GOBankingRates evaluated all 50 states and determined where you can live out your golden years for less than $45,000 annually. The study analyzed factors like groceries, housing, utilities, transportation, healthcare and the overall cost-of-living index in each state, all of which contribute heavily to your yearly expenses in retirement. These indices were then multiplied by the average annual expenditures of Americans aged 65 and older, which provided the final ranking of the top eight states.

Read: Hidden Obstacles That Keep People From Retirement

The figures quoted in this article are per household. The most recent Census lists the average number of people per household as 2.5.

Best States For Federal Retirees With A Low Cost Of Living

Moving in Retirement? Use Cost of Living to Pick the Perfect Area

One of the biggest considerations about where to live in retirement is the cost of living. Hopefully if youre one of my loyal readers, you have made smart money moves throughout your government career and have enough money between your TSP, FERS annuity, and social security to retire anywhere you want to.

On the other hand, if you only have a small pension, moving to a state with a lower cost of living is an excellent option.

This website ranks the cost of living in different states. The top 5 lowest cost of living states are:

  • Mississippi
  • Kansas
  • Missouri

Of course, the cost of living varies a lot within states too. We live downtown where we can both walk to work. If we were retired, we could move out of the city and into a house that cost less than a third of our current house.

Ultimately, whether it makes sense to move to a low cost of living state depends the cost of living of your current state and how much you could save. While a general lists of states can help you brainstorm ideas, you will need to get more granular data about specific locations to see just how your own personal expenses may change.

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Summary Of State Taxes For Federal Employees

When I wrote about federal taxes and retirement, I pointed out that you shouldnt focus on minimizing taxes. Instead, it was important to maximize post-tax income. Sometimes you have to pay more taxes but end up with more money. You will want to apply a similar framework for deciding where to retire- taxes shouldnt determine where you choose to live, it is the cost of living you can buy with your post tax dollarsthat matters.

For example it is worth noting that both Alaska and New Hampshire have no income or sales taxes. However, you will likely pay some tax: Alaska municipalities may levy a sales tax and New Hampshire imposes a capital gains tax. While these might be the most tax advantaged states for federal retirees, that doesnt make them the best. Both of these states are above the median in terms of the cost of living. While you may save money on taxes by living in these states, your tax savings may be erased by the higher cost of living.

Cost Of Living In Maine

Several northeastern states rank on the high end of the cost of living index, and Maine is one of them. It has the 14th-highest cost of living, which is 13.96% higher than the national average. Its not too surprising considering the states fantastic ocean views, fall foliage and shopping.

The good news is that if you love the New England lifestyle, but not its price tag, Maine is cheaper to live in than neighboring states such as Vermont, Connecticut, Rhode Island, and Massachusetts.

Maine also has the lowest crime rate in the country, which not only allows you to feel safer in your home but helps keep insurance costs down, too.

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Frequently Asked Questions About Most Affordable States

10 Worst States to Retire in 2021

Whats the most affordable U.S. state to live in?

There are many states in the U.S. where you can experience affordable living! States like Indiana, Kansas, and Missouri offer affordable housing costs and good median household incomes.

What state has the lowest cost of living?

The state with the lowest cost of living is Mississippi, though states like Arkansas, Oklahoma, and Tennessee are also among states with the lowest living costs.

Where are the best states to live in 2022?

Some of the best states to live in include Alabama, Iowa, and Michigan. These states all have a cost of living below the national average and offer affordable real estate and low unemployment rates!

Moving to a new state in 2022? Extra Space Storage has convenient, secure storage facilities throughout the U.S., so we can help with your transition. Find a storage unit near you!

Population and median household income statistics from United States Census Bureau. Unemployment statistics from U.S. Bureau of Labor Statistics. Home price and cost of living statistics from AreaVibes.

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These 10 States Have The Lowest Cost Of Living For Retirees

If living expenses are the most important factor for retirement, a new study says these are the best places to live.

If youre on a fixed income like most people in retirement controlling your expenses becomes more important than ever.

One way to do that? Living somewhere with a lower cost of living. Thats part of the thinking behind WalletHubs recent ranking of 2022s Best States to Retire.

While their ranking incorporates 47 key indicators of retirement-friendliness, were just going to highlight the best states in one category: affordability.

Here are the states deemed most affordable for retirees.

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