If you search online for the best states to retire to, you'll find many lists, with different states on them, in different orders. That makes sense, because different lists use different criteria -- such as tax rates, overall cost of living, crime rates, access to medical care, climate, and so on. Some states excel in some factors, while others excel in others.
Here's a look at five compelling states that would serve retirees well, each with its own combination of attractive features. See if any of them would make sense for you.
No. 1: Florida
It's no surprise to see Florida on a list of states for retirees, as it's already populated with a lot of them. Indeed, about 20% of the state's population is 65 or older. Here are the pros and cons of retiring in Florida.
Pros of retiring in Florida:
- No state income tax (though there are still sales and property taxes).
- No snow, icy roads, or unpleasantly cold weather -- and low heating bills, too.
- It may be easier than elsewhere to make friends, due to many other seniors moving there in retirement.
- There are many affordable areas in Florida, and the overall cost of living is near average.
- You may draw visits from vacationing loved ones, especially if you live near the Orlando area.
Cons of retiring in Florida:
- It can be quite hot -- and humid -- in much of the year, and you'll need to run the air conditioning a lot.
- When storms are bad, they can be really bad. The state occasionally gets hit by whopper hurricanes.
- Climate change is poised to erode Florida's coastline.
- Sales taxes can be hefty, with the state rate of 6% often augmented by a local tax that averages 1.05%.
- The local wildlife, such as mosquitoes, termites, and alligators, can be a nuisance.
- Homeowner's insurance can be costly, due in part to risks of hurricanes, flooding, and even sinkholes.
No. 2: Colorado
Colorado has seen its population grow robustly in recent years, with many people seeing a lot to like there. The state's population has grown by more than 30% over the past 20 years, with more young people than old choosing the state as their new home. Still, there's a good case to be made for Colorado as a retirement destination.
Pros of retiring in Colorado:
- There's great natural beauty, and many recreational opportunities, such as hiking, biking, skiing, camping, fishing, enjoying hot springs, and more.
- The weather is pleasant for much of the year.
- There are tax breaks for seniors, such as the ability to exclude $20,000 or more of qualified retirement income from taxes.
- Property taxes are low.
- While average property values are on the high side in Denver and other popular towns, there are still many affordable homes across the state.
Cons of retiring in Colorado:
- The state's cost of living is about 5.6% higher than the national average, though much of that is due to housing; utilities, for example, run well below average.
- Winters are cold and can be snowy or icy.
- The population growth in recent years has made traffic heavy and unpleasant in very populated areas.
- Healthcare in the state is generally good, with the state ranking in the middle 60% of states, per the Agency for Healthcare Research and Quality (AHRQ), but it's not among the top 20%.
- There is an income tax, of between 4% and 5%, and the state sales tax was recently 2.9%, but localities often add to that, with the average total sales tax topping 7%, per the Tax Foundation.
No. 3: New Hampshire
New Hampshire has a lot going for it for retirees, especially those who favor being in the Northeast. Here are the pros and cons of retiring in New Hampshire.
Pros of retiring in New Hampshire:
- It offers a little of everything in a relatively small space -- mountains, a little bit of shoreline, and relative proximity to big-city culture in Boston.
- New Hampshire is among the top 10 states for healthcare quality, per the AHRQ.
- People in New Hampshire enjoy a below-average rate of poverty, including the older population.
- The crime rate is low.
- There's no income tax, though that's made up for to some degree by property taxes.
- There's no sales tax, either.
Cons of retiring in New Hampshire:
- It can be very cold and snowy in the winter.
- The cost of living is about 10% above the national average, overall.
- While earned income isn't taxed, dividend and interest income is.
No. 4: Nebraska
Nebraska may not be on your radar as a retirement destination, but learn a little more about it.
Pros of retiring in Nebraska:
- The cost of living is relatively low, at about 91% of the national cost of living. Housing costs are especially low.
- The crime rate, overall, is low.
- Healthcare in Nebraska is generally good, with the state ranking in the middle 60% of states, per the Agency for Healthcare Research and Quality (AHRQ), but it's not among the top 20%.
- There's plenty of culture and entertainment, especially around Omaha, which boasts a world-class zoo and is the home of the NCAA baseball championships every year.
Cons of retiring in Nebraska:
- Winters can be brutal.
- There are taxes: The state sales tax rate is 5.5%, but localities often add to that. There's an income tax, too, that ranges from about 2.5% to 6.8%, depending on income level.
No. 5: Iowa
Iowa appears on more than a few lists of great places to retire. Here are the pros and cons of retiring in Iowa.
Pros of retiring in Iowa:
- The cost of living is low -- about 90% of the national cost of living, and housing costs, on average, are especially low.
- Iowa is among the top 10 states for healthcare quality, per the AHRQ.
- There are lots of recreational opportunities, such as golfing, bowling, and hiking.
- The crime rate is low.
- College towns offer cultural and sports events, and overall, the state rates well for quality of life.
Cons of retiring in Iowa:
- Most of the state is quite rural, which may not be your cup of tea. (If so, look at college towns.)
- Winters can be quite cold.
- The state sales tax is 6%, with some localities adding up to an additional 1%.
- There's an income tax, too, which has brackets as high as about 9% for higher-income folks.
Before you move, consider...
Those are only a few of many solid contenders for your consideration. (Here are even more possibilities.) Read about as many places as you can, and do so while keeping your most important factors in mind. These might be top-notch healthcare, a low cost of living, proximity to cultural events, recreational opportunities, agreeable climate, low crime rates, and/or other things. Some retirees might want a place with inexpensive housing and great skiing, for example, while others might care most about great museums and hospitals.
Keep the big picture in mind as you assess various places. A high income tax rate may not matter as much if you won't be in high brackets. Or perhaps a high rate won't pinch you too much, financially. No sales tax might be great, but see how that's being made up for in other taxes. A bad winter might be okay if the cost of living is low enough to let you spend part of the winter elsewhere.
Remember, too, that for some people, it's best not to move to a new place for retirement. Consider where your loved ones are and be sure you won't end up feeling isolated and far from friends or family.