Choosing a place to retire is a major decision, and there are many factors to consider. For example, affordability and access to great healthcare are important to many seniors, as is good weather and abundant entertainment options. With that in mind, WalletHub recently analyzed all 50 states and the District of Columbia to find out which are the most retirement-friendly. Here are the results.
The top five most retirement-friendly states
I won't keep you in suspense. Here are WalletHub's five best states to retire in this year, ranked in ascending order.
5. Colorado: Colorado has the highest cost of living on this list, but there are other characteristics that make it an appealing choice for retirees, specifically when it comes to health: 78% of Colorado seniors are physically active, and 82% are in "good" or better health. In fact, Colorado has the highest senior citizen life expectancy of the five states on this list, at 80 years.
4. Iowa: Iowa is one of the least tax-friendly states for retirees, according to WalletHub's rankings, although this is made up for by its low cost of living and senior-friendly job market.
Another reason to retire to Iowa is that there's lots for retirees to do. Iowa has abundant volunteer opportunities, as well as lots of golf courses and museums. Healthcare is another strong point of Iowa. It has more healthcare facilities per capita than any other state besides South Dakota, an above-average life expectancy, and one of the best overall health rankings for seniors.
3. South Dakota: Despite an above-average cost of living, South Dakota is WalletHub's third-most retiree-friendly state for 2017. For starters, there is no state income tax (in fact, none of the top three have a state income tax), and there is a retiree-friendly labor market, with the fourth-greatest concentration of senior citizens in the workforce.
Healthcare is perhaps the biggest reason for South Dakota's high ranking. South Dakota has more nurses and healthcare facilities per capita than any other U.S. state, and it has the highest-rated public hospitals of the five states on this list.
2. Wyoming: Wyoming has no state income tax, and it also offers a property tax rebate to senior citizens aged 65 and older. However, low taxes aren't the only reason Wyoming is one of the best states to retire in.
As far as quality of life goes, Wyoming has mild summers, beautiful landscapes, and the best air quality of any state in the country. There is also a low crime rate, better-than-average access to healthcare, and an extremely low poverty rate among senior citizens thanks to the combination of tax-friendliness and a low cost of living.
1. Florida: This should come as no great surprise, especially to East Coast residents. Many of us have a relative or two (or more) who have retired to the Sunshine State.
Florida is well-known for its beautiful weather and abundance of older residents -- the state actually has the highest percentage of residents over 65 in the U.S., at 18.6% of the population. However, the real reason Florida ranks No. 1 in 2017 is affordability, and there are several factors that contribute to this. Just to name a couple of examples, Florida is one of the few states with no state income tax, and housing prices in Florida are relatively low compared with the northeastern U.S., where many Florida retirees come from. In addition, Florida's cost of in-home care services is among the lowest in the U.S.
What makes a state "retirement-friendly"?
Affordability is a big factor in retirement-friendliness, and WalletHub used it as the highest-weighted category in its methodology. Overall cost of living is important, as is tax friendliness, as well as the costs of services that are important to retirees, like in-home health services.
In addition, there are quality-of-life issues to consider. After all, one of the biggest complaints I hear from retired friends is that they get bored often. So, it's important to have things to do. Look for places that employ a lot of senior citizens in part-time jobs, as well as nearby theaters, golf courses, and museums. Of course, a low crime rate, nice weather, and good air and water quality are also important quality-of-life factors.
Finally, access to quality healthcare is a major concern for retirees who plan to relocate, so the rankings consider things like the number of physicians, dentists, and nurses per capita. It's also a good sign if a large portion of the senior population of an area is physically active and in good health.
Other things to consider
Keep in mind that while the methodology used to rank the best states to retire in is sound, there are also some personal factors that should be taken into consideration. For example, I'm never going to retire to Wyoming, no matter how high it scores on these rankings. There's nothing wrong with the state (it's really a beautiful place), but it would put me 2,000 miles away from my nearest relative. Proximity to friends and family is a big deal to many people.
Another option to consider is staying put, which might make more sense than moving. According to Jim Mitchell, professor of sociology and director of the Center for Diversity and Inequality Research at East Carolina University, failure to consider the financial implications of selling your home is a common mistake. "For many, home equity is a significant asset, and the risks and benefit of relinquishing that asset should be considered carefully in light of replacement costs," says Mitchell.
The bottom line is that while the five states listed here are the best states to retire in 2017, at least on paper, you need to take your personal situation into account as well.
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