These Are the 15 Best States to Retire In

When you're planning for retirement, there are plenty of factors to consider. What will you do with all your free time? Do you have enough saved to live comfortably? Will you be working part-time in retirement? One other question to think about, though, is where you'll live. Many retirees choose to stay put during their golden years, but if you're up for an adventure, moving to a new state can be an exciting way to save a lot of money in retirement. Not all states are retiree-friendly, though, so if you're looking to move, it's important to choose the right retirement destination -- and these are some of the best states to call home.

There's a good reason why the Sunshine State is a popular retirement destination. For one, it's one of the most tax-friendly places for retirees because the state doesn't tax income -- including retirement account withdrawals and Social Security benefits. Many Florida cities also have a lower-than-average cost of living, making it an affordable place for many retirees. For instance, the median home value in Pensacola is just $152,000, and the average rent for a 1,000-square-foot apartment in Panama City is around $1,000 per month.

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Like Florida, Texas has no state income tax, and you also won't pay state taxes on your Social Security benefits. If money is tight in retirement, saving on taxes can make a big difference. Texas also offers a variety of activities for retirees. If you've always dreamed of living on the beach, you can retire to a city near the Gulf of Mexico. If you want to live in a bustling city with endless activities, moving to a bigger city like Austin or Houston might be a good choice. Or if you'd prefer to settle down in a more quaint area, there are plenty of small (and affordable) towns throughout the state that are safe, quiet, and the perfect destination to relax.

The Cornhusker State can be a dream retirement destination for anyone looking to spend a lot of time outdoors. With eight state parks, hundreds of miles of hiking and biking trails, and plenty of opportunities for boating, fishing, and hunting, Nebraska is perfect for outdoorsy types. Although you won't get many tax breaks in Nebraska, the cost of living in the state is around 12% below the national average, according to research from Kiplinger.

Iowa may not have mountains or beaches, but it does have plenty of lakes, rivers, hiking trails, and nature parks for those looking for outdoor adventures in retirement. But there's more than just outdoor fun in Iowa. The state also has bigger cities like Cedar Rapids and Iowa City that offer plenty of museums, restaurants, theaters, and concert venues -- ensuring there's something for everyone. And with a lower-than-average cost of living in many cities, you'll have more cash to spend on fun retirement activities.

Although it may seem like an unlikely retirement destination, South Dakota has plenty of perks for retirees. First, it doesn't tax income or Social Security benefits. Second, many of even the bigger cities have a lower-than-average cost of living (the median home value in Sioux Falls, for instance, is around $195,000, according to Zillow). And third, there are dozens of fun activities for retirees. Between Mount Rushmore, Badlands National Park, and Black Hills National Forest, you'll never run out of sightseeing. And with plenty of museums, restaurants, and hiking trails, you'll never be bored in retirement.

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Kentucky residents won't pay taxes on their Social Security benefits, which is a major perk for retirees. Another tax benefit is that retirement income (such as money from your 401(k), IRA, or pension) is not taxed if you're earning less than $31,110 per year. For any income you earn above that limit, you'll pay a flat 5% tax rate. Aside from being tax-friendly for retirees, Kentucky is also affordable. The median home value in the state is just under $150,000, and property taxes are also lower than the national average. Finally, sales tax is relatively low at just 6%, and some items -- like prescription drugs -- are sold tax-free in the state.

Montana isn't necessarily the most financially-friendly state for retirees, with a slightly higher-than-average cost of living and not many tax benefits. However, the state ranks second in the country for culture, according to Bankrate, and it can be the perfect retirement destination for nature lovers. Despite its relatively high costs, Montana is still one of the more popular places to retire. Roughly 18% of the state's population is age 65 or older -- which is one of the highest rates in the nation.

Wyoming is one of the most tax-friendly states for retirees, according to Kiplinger, with no state income tax and a relatively low state sales tax rate of 4%. The state also ranks among the top 10 safest states in the nation, according to research from Bankrate, and it ranks 11th in the country in terms of health and wellness. There's also no shortage of fun activities for retirees, with Yellowstone National Park, Grand Teton National Park, and plenty of parks, hiking trails, and breathtaking views.

Vermont is the safest state in the country, according to Bankrate, and it also ranks first in the nation in overall wellness. The higher standard of living comes at a slightly higher-than-average price, however, as the median home value in the state is around $211,000, according to Zillow. But for retirees who have a healthy retirement fund and aren't afraid of cold and snowy winters, Vermont is one of the most idyllic and peaceful retirement destinations.

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Idaho is one of the more affordable states to retire to, with even the larger cities boasting a relatively low cost of living. In Idaho Falls, for example, the average two-bedroom apartment rents for just over $600 per month -- making it an affordable option for those who don't have a lot of cash to spare in retirement. You'll find beautiful views and plenty of outdoor activities in Idaho. And finally, the state has low crime rates, ranking fourth in the country in terms of safety, Bankrate found.

Missouri is the least expensive state in the country, on average, according to Bankrate's research. Even in big cities such as St. Louis, the median home value is just $118,000, according to Zillow. Although the state doesn't rank as highly in other areas, such as weather and crime rates, there are plenty of safe areas with lots of museums, restaurants, outdoor activities, and other affordable ways to enjoy retirement.

Michigan is one of the more tax-friendly states for retirees, as Social Security benefits aren't taxed at all, and other sources of retirement income are only partially taxed. Residents who are age 65 or 66 can receive a tax deduction of up to $20,000 per person (or $40,000 for married couples filing jointly) on all their retirement income. Those who are age 67 to 70 can receive a deduction of $30,000 ($75,000 for those filing jointly), and residents who are age 71 or older can deduct up to $50,509 per person ($101,019 for married couples filing jointly). Aside from being tax-friendly, Michigan also has a cost of living that's around 12% below the national average, making it an affordable place to call home.

Like Michigan, Georgia offers quite a few tax benefits for its retirees. Social Security benefits aren't taxed at the state level, and older adults can deduct a portion of their other retirement income. Each taxpayer age 62 to 64 can receive a tax deduction on up to $35,000 of all retirement income, and those age 65 and older can deduct up to $65,000 per taxpayer (or $130,000 for married couples filing jointly). Georgia also offers warm weather and sunny beaches, and it boasts a relatively low cost of living -- the median home value in the state is around $195,500, according to Zillow.

Pennsylvania has something for everyone, with access to beaches, lakes, and other outdoor activities, as well as several big cities and plenty of restaurants, museums, and nightlife. The state is also tax-friendly for retirees. Seniors age 60 and older pay no taxes on Social Security benefits and retirement account withdrawals, and Pennsylvania is one of the few states that doesn't tax income from pensions either.

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Although you’ll have to pay taxes on your retirement income and Social Security taxes in North Dakota, income tax rates are among the lowest in the country -- the highest rate any resident will pay in state income taxes is just 2.9%. The state also offers beautiful mountain views, lots of wide open spaces, and plenty of parks and museums to keep you busy in retirement.

When you're living on a fixed income in retirement, every dollar counts. And if you're living in an expensive city paying an exorbitant amount for housing, taxes, and other general living expenses, that means there's less money left over for fun activities. By choosing the right retirement destination, you can save money and enjoy your golden years more comfortably.

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