Being retired means living life on your own terms without a clock to punch or a boss to report to. But retirement can be tricky from a financial perspective. Once you stop collecting a paycheck and move to a fixed income, you need to make your money last.
The place where you retire could dictate how well you fare financially, mentally, and physically during your golden years.
But it’s not just money you need to think about. You’ll also want to find yourself someplace with access to a solid healthcare network and that offers a good quality of life. Ideally, you want to choose one of the best states to retire in.
To this end, The Ascent looked at affordability, access to quality healthcare, and wellness, in determining the best and worst states for retirement. Here's what we came up with.
The best states to retire
The top ten best states to retire
- North Dakota is the best place to retire with high scores across affordability, access to quality healthcare, and wellness. If you're willing to bear its harsher winters, you'll be rewarded by calm, comfortable summers. Interestingly, North Dakota is one of the few states that tax Social Security benefits and offers no exemption for low-to-moderate earners. But income taxes at the state level are so low that, combined with its competitive cost of living, it almost doesn't matter.
- South Dakota scores high in affordability and wellness, making it a close runner-up to its northern neighbor. Like North Dakota, winters in South Dakota can be a doozy, but nature lovers have plenty of scenery to enjoy during the warmer weather months.
- Colorado is known for its fresh air, glorious scenery, and generally laid-back way of life. It's not surprising, then, that it landed a high score on wellness. Colorado's metro areas, however, are getting expensive, so a suburb may be a more affordable spot to retire to.
- Nebraska ranks fairly high as far as healthcare and wellness go, and its low cost of living makes it a good place for retirees to stretch their income. Social Security benefits are taxed in Nebraska, but low-to-middle earners often avoid that tax based on their total income.
- Minnesota also gets high scores in wellness and healthcare. State income tax rates, however, are on the higher side, and Social Security benefits aren't exempt. Still, Minnesota sports a moderate cost of living overall.
- Massachusetts is far from cheap, having one of the highest costs of living in the country. But its scores in healthcare and wellness are strong enough to compensate.
- Texas is another state to retire to if you can stand the heat. It's one of the few states without an income tax and its cost of living, though not particularly low, is reasonable across the board.
- Vermont is an outdoor lover's dream, especially during the fall. Though not the most affordable state to live in, strong scores in wellness and access to healthcare propel it into the top 10.
- Washington also doesn't have a state income tax, making it more affordable for retirees despite its cost of living being on the high side. Avoiding metro areas can help seniors keep living expenses down.
- Hawaii is, in many ways, a retiree's dream. With its gorgeous beaches and warm climate, it has a lot to offer to seniors. But while its scores in healthcare and wellness land it a top 10 spot, beware of its extremely high cost of living.
The ten worst states to retire
- Louisiana has glaringly low scores for healthcare and wellness, giving it the unwanted distinction of being the worst state for retirees. Though the cost of living in Louisiana is fairly low, and income taxes are moderate, those factors aren't enough to bail it out of the bottom spot.
- Illinois has the lowest healthcare score among all 50 states, which is problematic for seniors. The state also ranks poorly with regard to wellness and has a relatively high cost of living.
- Arkansas has a relatively low cost of living on the whole. But it scores poorly on both healthcare and wellness, thereby landing itself a bottom position.
- Oregon only manages to eke out a middle-of-the-road score on healthcare. It has one of the highest tax rates in the country and a relatively high cost of living on the whole.
- New York scores poorly on income tax rates and overall cost of living (though costs in the New York City metro area do skew these numbers upward). Its middling scores on healthcare and wellness aren't enough to land it a higher rank.
- California can be a draw for seniors based on climate and scenery alone, and the state ranks highly with regard to wellness. But it's one of the least affordable states in the nation, and for seniors on a fixed income, that's not great.
- Delaware gets a decent healthcare score. Unfortunately, it scores poorly in terms of both affordability and wellness.
- Georgia doesn't rank particularly poorly in any of the three categories used to determine the best states for retirement. But without a relatively high score in any of these areas, it lands in the bottom 10.
- Alaska's absent income tax makes it a reasonably affordable place to live despite its higher cost of living. But it has one of the worst healthcare scores among the 50 states.
- Kentucky is a relatively inexpensive place to live. But its low scores on healthcare and wellness drag it toward the bottom of our list.
The best state for you to retire in
The state you retire to could impact your quality of life for decades to come. To land on the right choice for your retirement, you’ll need to weigh factors like affordability, healthcare, and wellness to determine which take priority for you. Of course, there are other factors that may come into play, like climate and proximity to friends and family. Decide which factors are paramount, and then make an informed decision based on the information you’ve gathered. With any luck, you’ll live out your golden years in a place you’re happy to call home.
To determine the best states to retire in, The Ascent equally weighted the three categories of affordability (33.3%), healthcare (33.3%), and wellness (33.3%) to determine overall state rankings.
Affordability was measured by taking state income tax rate data from the Tax Foundation coupled with cost of living data from the U.S. Bureau of Economic Affairs. Access to quality healthcare was determined based on state healthcare quality rankings from the Agency for Healthcare Research and Quality coupled with access to geriatric care from the United Health Foundation. Wellness scores were derived from the 2017 Gallup-Sharecare Well-Being Index.
- Agency for Healthcare Research and Quality (2019). National Healthcare Quality and Disparities Report.
- Gallup-Sharecare (2018). 2017 Gallup-Sharecare Well-Being Index.
- The Tax Foundation (2019). State Individual Income Tax Rates and Brackets for 2019.
- United Health Foundation (2019). State Rankings, 2019 Senior Report.
- U.S. Bureau of Economic Analysis (2019). Real Personal Income for States and Metropolitan Areas, 2017.