Retirement represents the end of one’s career, but it doesn’t have to be the end of your financial security. It also doesn’t have to mean a lower quality of life. Your decision of where to retire can make a big difference. There are still several good retirement options throughout the United States and if you had to make an educated guess about where, you would probably score fairly high on this little test. You just have to know what you want and what is being offered to you and connect those dots.
So what are the best retirement spots in the U.S. today and why are they so good?
The Affordability Factor
Affordability is one of the most important factors in the search for a where to retire. In addition to cost of living, one of those key parts is the “tax factor”.
If you want to avoid paying lots of taxes, you might want to steer clear of the Northeast U.S. and venture towards the South instead. According to Kiplinger, the Northeast U.S. is the most taxed and has the least tax-friendly states.
Stay Away From the Northeast U.S.?
The states that make up the Northeast that were rated least affordable included Maryland, New York, New Jersey, Connecticut, Vermont, and Maine, filling six of the ten worst in affordability.
These states hit their residents with a double barrel shot of higher sales taxes and high income taxes. Where I live, in New Jersey, you can also throw in the highest real estate taxes in the nation, too. That may explain why New Jersey is losing population and many residents are relocating across the Delaware River to Pennsylvania, a short drive and a large tax advantage when they do it. Pennsylvania ranks as number eight best on the 2020 list.
What Are the Components of Best and Worst Rankings?
Besides affordability, there are several important factors that we all consider when we decide where to spend our retirement years.
These factors include:
- Cost of living: This is the everyday cost for food, clothing, shelter, etc. and in the U.S. right now, the median cost of living is indexed at 98.5. That is derived from a national index by the Missouri Economic Research and Information Center.
- Crime: This number represents how many violent crimes were committed per 100,000 people in 2017. The crime rate in the U.S. was 394 crimes per 100,000 people.
- Age: This data was sourced from the 2010 Census. The average share of those 60 and older among the 50 states is 21.46%.
- Property price: Average property prices were also sourced from Census data. The average among the 50 states is $263,544.
- Life expectancy: The average life expectancy in the 50 states ranged from 74.5 to 81.5 years, based on data from the Institute for Health Metrics and Evaluation, an independent health research center.
So What Are the Best States for Retirement?
1. Florida – The Sunshine State
Florida is where more than a quarter of the state’s population is 65 and older. That’s true even with home prices there averaging $252,309, much higher than many other states such as Iowa and Ohio. In most of the important categories though, Florida ranks near the top of the lists.
Besides the taxes, weather and activities make Florida very attractive for retirees.
2. Minnesota – The Land of 10,000 Lakes
Minnesota surprisingly takes the second spot. The state’s crime rate was almost half of Florida’s, but it had a slightly higher average property price at $263,708. The state also has the longest life expectancy at 81.1 years. If you are a winter enthusiast, Minnesota has a lot to offer.
3. Iowa – The Hawkeye State
Iowa remains a top spot not just for retirees, but others looking to move to a new state. Helping is its average property price of $154,727 and relatively affordable low cost of living.
4. Ohio – The Buckeye State
Ohio takes the fourth spot on this list, with a relatively low crime rate, much lower than Florida’s. It may not have employment opportunities right now, but retirees can easily find a lifestyle they can afford.
5. Texas – The Lone Star State
Despite the highest crime rate in the top ten, Texas has many senior residents, with 16.8% of its population 60 and older. The state also boasts an average property price of $211,199, which still falls lower than states like Florida and Idaho.
Wrapping up the best of the top ten are Wisconsin, Nebraska, Pennsylvania, Illinois, and Idaho.
And Which Are the Worst States to Retire?
50. Montana -The Treasure State
With one of the lowest crime rates on the list, it has a high cost of living ($288,867) which places it down on the list in the worst spot.
49. Arkansas – The South Central State
Arkansas has a high crime rate and even though its average property price is relatively affordable at $130,907, the cheapest among the worst ten states, it is still considered a less desired place when all factors are considered.
48. Maryland – The Old Line State / Free State
Maryland’s high average property value of $312,990 doesn’t attract new retirees. The metro D.C. area is one of the highest cost areas in the U.S.
47. Louisiana – The Pelican State
Louisiana, known for its celebrations of Mardi Gras and French architecture, also is far from being a safe haven for retirees. The state has a high crime rate and a low life expectancy of 75.1 years of age.
46. Alabama – The Yellowhammer State
While the southern state of Alabama has about 22% of its population 60 and older, what may push away retirees is a lower life expectancy of 75.4 years compared with other states.
The states of Tennessee, New Mexico, Nevada, Hawaii, and Alaska round out the bottom ten list.
The cold weather isn’t the only factor that many retirees don’t like about Alaska. It has the highest crime rate on the list. Its residents who are 60 and older make up just 15.8% of the state’s population. I guess it requires a hardy, healthy, younger type to enjoy its environment.
It’s a tough decision to relocate at any point in life, especially when you may be leaving family behind and they are important to you. But yet, people sometimes must choose to move simply because they can no longer afford to live where they are in retirement.
Have you thought about relocating for retirement? What factors are most important to you if and when you do? Is affordability your number one factor? Or how else will you decide where to retire?