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Source: Social Security Administration.

Life poses a number of challenges for the average American, but arguably none are tougher than saving enough money for retirement.

On paper, saving for retirement might look as easy as one, two, three: You save as much money as you can, you invest the money you save, and then you sprawl out on a beach in a faraway land, living off the nest egg you've built. Unfortunately, it doesn't work quite that way for most Americans. Life has a tendency to get in the way, and our path to retirement is rarely a straight line. Medical costs, expensive purchases (e.g., a home or car), college costs, and raising children are all reasons why retiring is never as easy as one, two, three.

But where you retire can sometimes make that challenge just a little bit easier. Different states and cities offer advantages that can make seniors' retirement years truly golden.

America's 10 best cities to retire
With this in mind, Bankers Life recently commissioned a retirement study from the Center for a Secure Retirement that looked at the 60 largest metropolitan areas in the United States. The study, titled "America's Best Cities for a Healthy (and More Affordable) Retirement," scored the 60 cities out of 100 based on the following eight criteria:

  • Healthcare
  • Economy and affordability
  • Social
  • Wellness
  • Activities
  • Environment
  • Transportation
  • Crime

The highest value was placed on healthcare and economy and affordability; moderate value was placed on social, wellness, activities, and environment; and low value was placed on transportation and crime rates. The goal of the study was to fully encompass all facets of seniors citizens' health, finances, and potential happiness with one unique rating.

In the end, 10 major U.S. cities stood out as being the most all-around friendly to retirees.

Images
Seattle skyline. Source: Flickr user Tiffany Von Arnim.

The top 10 best cities to retire, according to Center for a Secure Retirement, are as follows:

  1. Seattle, Washington
  2. Minneapolis-St. Paul, Minnesota
  3. Denver, Colorado
  4. Portland, Oregon
  5. Hartford, Connecticut
  6. Omaha, Nebraska
  7. Baltimore, Maryland
  8. Pittsburgh, Pennsylvania
  9. Cleveland, Ohio
  10. Salt Lake City, Utah

What makes Seattle so special (other than the fact it's where I currently call home)? Although it's one of the most expensive cities on the list, Seattle's temperate year-round climate, abundance of activities for seniors, and pleasing environment push it to the top of the list. It also finished in the top 10 in healthcare, thanks in particular to the availability of specialized healthcare pertaining to common issues for seniors. If you're interested to see where all 60 major U.S. cities ranked, you can download the report.

Where you retire matters
If Center for a Secure Retirement's study serves a purpose, it's to remind us that where you retire can make a potentially big impact on how much of your money you and your family get to keep during retirement and once you pass on.

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Source: Social Security Administration.

For example, 13 states currently tax Social Security benefits. The good news here is that you have a pretty good chance of retiring in a state that doesn't tax your Social Security benefits. Furthermore, nine of the 13 states that do tax Social Security benefits offer some form of income exemption up to a certain dollar amount for seniors. Only four states -- Minnesota, North Dakota, Vermont, and West Virginia -- tax Social Security without exemption. If you live in these four states, you can expect to take home less in Social Security benefits than you would if you lived elsewhere.

Property taxes also vary widely between states. Depending on where you choose to live, you could wind up paying either a fortune or next to nothing in property taxes. And just because you're renting, don't assume property taxes don't apply to you. If property taxes rise, your landlord will likely boost your monthly rent.

Images

Source: Flickr user Mark Moz.

According to a recent study from WalletHub, Hawaii, Alabama, and Louisiana led in 2015 with the nation's lowest property taxes. For Hawaii, the average property tax is less than $500 per year. Because Hawaii's economy benefits so much from tourism, it can get away with relatively low property taxes. In contrast, retiring in Illinois could set you back an average of $3,939 per year in property taxes -- the state ranked dead-last in WalletHub's 2015 analysis.

Where you retire can also largely impact how your estate and wealth are divvied up after your passing. Based on data from the Tax Foundation, six states have an inheritance tax and 15 states may hit you with an estate tax. Keep in mind that exemptions may exist -- most states have pretty generous estate tax exemptions, including Delaware, whose $5.43 million exemption matches the federal exemption -- but they can differ on a state-to-state basis. But if you retire in Maryland or New Jersey, you're in one of two states that have both an inheritance and estate tax.

Ultimately, these financial difference-makers won't be the only factor in where you retire. Nonetheless, it pays to understand how the state and city in which you choose to retire could affect your retirement benefits, your withdrawal plan, and your overall financial wellness.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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