Seniors have their choice when it comes to where to retire, and not all states are equal. With health care costs ranking as a top concern among retirees, some states are clear champions for seniors.
Kiplinger ranked states based on several factors, including living expenses, tax burdens, health care costs, household incomes, poverty rates and economic wellness of the state itself.
Here are 10 best states for retirement:
1. South Dakota—Home of Mount Rushmore, South Dakota is the top ranked state for retirement. Cost of living is 4% below the national average, and average health care costs for a retired couple are also lower, at $415,297. Its affordability and top ranking for low taxes make the state the top choice.
2. Hawaii—The vacationer’s paradise is also a retirement haven for Americans. While cost of living is a whopping 87% above the national average, health care costs average just $375,273, 11.4% below the U.S. average. The state also has the highest average household income and top rankings for wellness.
3. Georgia—Cost of living in the state is 7% less than the U.S. average, as is the average health care costs for a retired couple ($404,460). It is also ranked as one of the top 10 best states for taxes for retirees.
4. North Dakota—Across the border from top retirement state South Dakota, retirees can find similar benefits in North Dakota. Cost of living is just 1% above national average; health care costs were below average at $414,455. However, retirement income and Social Security benefits are taxed.
5. Tennessee—Budget-conscious retirees may agree with Tennessee, which has a cost of living that’s 12% below the U.S. average. Health care costs average $411,617, and the state does not levy state income taxes.
6. Alabama—With a cost of living 13% below the U.S. average and warm weather, Alabama is a top retirement state. Income taxes range from 2% to 5%, with Social Security benefits exempted. Health care costs are lower than average as well, at $404,922 on average for a retired couple.
8. Florida—Boasting a cost of living at just 1% above the U.S. average, the Sunshine State is home to nearly 3.8 million seniors—the highest share of residents age 65 and older in the country. The average cost of health care was $425,025, but the tax benefits attract retirees. The state has no income, estate or inheritance tax, and it doesn’t tax Social Security or other retirement income.
9. New Hampshire—The “live free or die” state lives up to its motto with regard to not taxing Social Security and other retirement income, while also not levying a sales tax. In addition, the state ranks fifth for senior health. The cost of living is 18% above the national average and average health care costs were $424,052.
10. Utah—Ranked second in the nation for the overall health of the 65-plus population, Utah is a top retirement destination. Cost living is 4% above the national average, while health care costs are below average, at $412,641.The state does, however, tax Social Security benefits.
5 worst states for retirement:
45. California—While the state is the most populous in the country, with 38.7 million people, California ranks among the worst states to retire thanks to the second-highest cost of living, behind Hawaii. The average household income for seniors is above the national average, but one in 10 Californians aged 65 and older still live in poverty. Retirement income, minus Social Security, is also fully taxed, and the state imposes the highest income tax rate. The average health care cost was $430,867.
46. Connecticut—The cost of living in the state is 24% above the U.S. average, along with higher average cost of health care for a retired couple ($429,191). Along with the second-highest real estate taxes in the nation, taxes on Social Security benefits and fully taxed retirement income, the state is also not friendly to seniors’ wallets.
47. New Jersey—With cost of living sitting 27% above the U.S. average, New Jersey is the fifth most expensive state to live in. Retiree health care costs are also the third-highest, at $440,299 on average. Property taxes are the highest in the nation, and New Jersey is ranked as the worst in the U.S. for fiscal soundness.
48. Maryland—The state has the second-highest income in the country for folks 65 and older, but taxes retirement income. It also is the only state that has both an inheritance tax and estate tax. The cost of living is 17% higher than the national average, while health care costs average $436,074.
49. Massachusetts—With the third-highest cost of living, Massachusetts also has the second-highest health care costs for a 65-year-old couple, at $450,383. Retirement income, except Social Security, is taxed at 5.5%, and the cost of living is 38% higher than the U.S. average.
50. New York—The Empire State has a relatively lower average cost of living when excluding New York City. However, Manhattan is the nation’s most expensive place to live, with costs 138.6% above average. The poverty rate for adults 65 and older is also high, at 11.4%, compared to the 9.3% national rate.
Written by Amy Baxter
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