If you’ve done any research on best states to retire you’ll likely come across a confusing assortment of lists all over the internet. One such list has Pennsylvania as the second most desirable state to retire to but it only makes 7th overall on our list. While most lists agree that retiring to Florida is ideal, there are some surprising alternatives, like Kentucky. Retiring to Kentucky probably isn’t a popular topic of conversation but it represents a state that is a perfect example of what we wanted to discover, a state that we hadn’t thought about but makes a great place to retire to.
Best States To Retire To Methodology To The List
Like other “best places to retire” lists we too looked at many different factors. However, our approach was to be very pragmatic and objective and focus on our retirement money, our health care and overall cost of living. Unfortunately, without taking into account things like climate, you end up with a list of states that no one actually wants to live in, so we included that as a factor as well. In addition for good measure, our 10th criteria was to factor in bankrate’s very own list as well, because their list does factor in things like diversity and culture which were things that we didn’t measure. You can read more about our best states to retire criteria below.
Top 5 Best States To Retire
#1 Florida
Florida is going to end up as the best place to live on a lot of lists. With no income tax, social security exemptions, quite possibly the best weather (except hurricanes and humidity), above average health care and some of the best affordability in the country, it’s no wonder. Cost of living has gone up over the years but if you don’t mind living inland then there’s still plenty of opportunities to retire. The accolades for Florida are great and it’s the number has the highest population of retirees, it’s no wonder that retirees want to retire to Florida.
#2 Arizona
When we set out to do the research we wanted to stay as objective as possible. That’s why the next 4 states are typically much lower on other list. However, Arizona has been a popular destination for many families and retirees included. Afterall, there are multiple del Webb communities in Arizona.
Arizona makes our list at number 2, not because it’s the best in any one category like Florida, but instead is above average in almost every aspect we looked at. There’s an income tax but there’s exemptions for Social Security. The weather isn’t perfect with 100+ degree days, but the average temperature is some of the best in the country and it’s dryer air. It’s got a high population of retirees, low crime and low sales taxes.
#3 Mississippi
A dark horse on these sort of lists and we couldn’t figure out why. What’s not to like about Mississippi? It’s got all the makings of a retiree oasis. Decent tax structures, great weather (albeit a bit humid), outstanding affordability and a decent community of retirees already here. The only downside to Mississippi is it’s below average health care. Even with that being the most heavily weighted part of our criteria, Mississippi ranks 3rd and deserves your consideration if you’re thinking of the best state to retire.
#4 Alabama
Every list we looked at treated Alabama how we just treated Mississippi. A surprising yet boring choice for retirement. I’m sure we’d all love to retire to Peurto Rico or some place more exotic but Alabama has everything you’d want in a state to retire to and quite possibly has the most affordability of any state in the US. One thing to watch out for when you’re considering Alabama is the sales tax. Some of the cities push up the sales tax to be one of the worst in the country, and that can add up even if the cost of goods is significantly lower.
#5 Texas
With a state as big as a country, it’s really hard to measure Texas. Texas is super tax friendly, and above average in almost every criteria that we considered except 1, population of retirees. One downside is our metric is based on retiree per 100,000. This can favor more densely populated cities and states. Texas is such a good state to retire to that if we didn’t use the population of retirees as a measurement, it’d have been 2nd only to Florida.
Texas is wide open, and features MANY retiree only housing options in the suburbs of many of it’s busier cities. Dallas, San Antonio, and Austin in particular all have multiple communities just for retirees.
The Best States To Retire To
Below is our criteria and how each state ranked in that given criteria. Some of the criteria is just the numbers, for example if a state had 0 income tax, then it immediately ranks #1 for that category. However, for things like crime, cost of living and health care we used a blended average of the actual metrics and weighted them toward what retirees preferences are based on our research.
Best State To Retire To
| State | Income Tax | SS Exemptions | Weather Grade | Health Care | State Sales Taxes | Real Estate Prices | Population Of Retirees | Crime Rates | Cost of Living | Overall |
|---|---|---|---|---|---|---|---|---|---|---|
| Florida | 1 | 1 | 2 | 28 | 29 | 25 | 2 | 26 | 34 | 1 |
| Arizona | 15 | 1 | 3 | 21 | 34 | 22 | 10 | 33 | 35 | 2 |
| Mississippi | 29 | 1 | 3 | 22 | 13 | 1 | 14 | 9 | 3 | 3 |
| Alabama | 15 | 1 | 4 | 33 | 35 | 1 | 17 | 30 | 2 | 4 |
| Texas | 1 | 1 | 4 | 45 | 27 | 27 | 47 | 34 | 18 | 5 |
| Hawaii | 48 | 1 | 1 | 1 | 1 | 3 | 1 | 1 | 50 | 6 |
| South Carolina | 22 | 16 | 5 | 22 | 20 | 9 | 6 | 27 | 23 | 7 |
| Louisiana | 41 | 1 | 2 | 10 | 10 | 2 | 9 | 10 | 19 | 8 |
| Georgia | 29 | 13 | 3 | 21 | 16 | 6 | 21 | 16 | 8 | 9 |
| Arkansas | 1 | 1 | 10 | 46 | 44 | 1 | 21 | 46 | 5 | 10 |
| Kentucky | 29 | 1 | 5 | 18 | 6 | 1 | 11 | 7 | 4 | 11 |
| Tennessee | 9 | 1 | 11 | 31 | 31 | 15 | 25 | 41 | 6 | 12 |
| Oklahoma | 10 | 21 | 9 | 40 | 33 | 1 | 34 | 33 | 1 | 13 |
| North Carolina | 35 | 1 | 4 | 12 | 8 | 6 | 8 | 13 | 29 | 14 |
| Missouri | 12 | 1 | 12 | 35 | 34 | 9 | 20 | 37 | 7 | 15 |
| West Virginia | 25 | 14 | 11 | 22 | 11 | 1 | 2 | 17 | 12 | 16 |
| Virginia | 18 | 16 | 9 | 10 | 13 | 21 | 29 | 5 | 33 | 17 |
| Nevada | 1 | 1 | 12 | 42 | 27 | 37 | 34 | 37 | 28 | 18 |
| Delaware | 34 | 11 | 7 | 8 | 1 | 8 | 2 | 15 | 36 | 19 |
| Ohio | 17 | 23 | 18 | 23 | 19 | 4 | 16 | 16 | 9 | 20 |
| Kansas | 38 | 9 | 4 | 13 | 12 | 1 | 9 | 11 | 11 | 21 |
| Indiana | 12 | 1 | 18 | 25 | 18 | 8 | 30 | 20 | 16 | 22 |
| California | 50 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 47 | 23 |
| Pennsylvania | 12 | 1 | 22 | 14 | 19 | 12 | 8 | 22 | 27 | 24 |
| Maryland | 36 | 1 | 5 | 2 | 4 | 10 | 14 | 12 | 41 | 25 |
| Illinois | 21 | 16 | 15 | 18 | 26 | 13 | 23 | 23 | 17 | 26 |
| New Jersey | 40 | 1 | 4 | 2 | 4 | 8 | 7 | 3 | 37 | 27 |
| New Mexico | 25 | 17 | 11 | 20 | 24 | 11 | 6 | 25 | 21 | 28 |
| Oregon | 46 | 1 | 3 | 3 | 1 | 3 | 2 | 3 | 43 | 29 |
| Michigan | 22 | 16 | 22 | 20 | 6 | 7 | 10 | 26 | 14 | 30 |
| Iowa | 48 | 1 | 2 | 2 | 1 | 1 | 1 | 1 | 10 | 31 |
| Washington | 1 | 1 | 25 | 6 | 35 | 43 | 40 | 14 | 38 | 32 |
| Nebraska | 44 | 6 | 4 | 7 | 4 | 2 | 6 | 6 | 15 | 33 |
| Rhode Island | 25 | 21 | 15 | 12 | 13 | 16 | 6 | 5 | 39 | 34 |
| Connecticut | 42 | 7 | 5 | 2 | 4 | 4 | 4 | 2 | 40 | 35 |
| Wisconsin | 39 | 1 | 10 | 6 | 5 | 4 | 5 | 8 | 26 | 36 |
| South Dakota | 1 | 1 | 36 | 28 | 41 | 24 | 22 | 39 | 22 | 37 |
| Utah | 25 | 17 | 14 | 11 | 22 | 19 | 23 | 8 | 24 | 38 |
| New York | 43 | 6 | 5 | 3 | 7 | 5 | 5 | 7 | 46 | 39 |
| Massachusetts | 29 | 14 | 13 | 3 | 7 | 17 | 9 | 10 | 49 | 40 |
| New Hampshire | 29 | 1 | 16 | 9 | 1 | 12 | 4 | 2 | 44 | 41 |
| Idaho | 37 | 9 | 11 | 11 | 10 | 9 | 11 | 4 | 20 | 42 |
| Wyoming | 1 | 1 | 40 | 39 | 20 | 24 | 20 | 8 | 13 | 43 |
| Vermont | 18 | 27 | 29 | 16 | 12 | 17 | 3 | 3 | 42 | 44 |
| Montana | 18 | 22 | 29 | 27 | 1 | 20 | 5 | 28 | 31 | 45 |
| Colorado | 24 | 16 | 23 | 11 | 23 | 24 | 25 | 22 | 32 | 46 |
| Maine | 45 | 1 | 5 | 3 | 2 | 2 | 1 | 1 | 45 | 47 |
| North Dakota | 10 | 28 | 40 | 27 | 20 | 18 | 36 | 18 | 30 | 48 |
| Minnesota | 46 | 4 | 4 | 4 | 3 | 2 | 3 | 2 | 25 | 49 |
| Alaska | 1 | 1 | 43 | 25 | 31 | 33 | 42 | 38 | 48 | 50 |
Top 5 Worst States To Retire To
You might think that we’re biased against cold weather climates, but the combination of cold weather, low population of retirees and low affordability (or high crime) pushes a state to the bottom of a list for the best states to retire in.
Colorado
Every image we’ve seen of Colorado makes it seem like a dream destination for retirees that love the outdoors. However, high taxes, low affordability in housing and general goods and while it’s beautiful when you can use the outdoors, you better bundle up, because it’s colder here more than normal. The abysmally low population of retirees means that if you do retire here, you won’t see many of them at their exceptional health care.
Maine
How does a state that has the most retirees per 100,o00 people end up at the bottom of a best state list? Simple, Maine has high real estate prices, high taxes, extremely high cost of living and some of the worst weather in our country. Bankrate agrees with us on this one, Maine might be beautiful but it’s one of the worst places to retire to.
North Dakota
You’d be hard pressed to find a more inhospitable place to retirees than North Dakota (but we found 2). It’s got the 2nd worst weather, and it is average or below average in every other category.
Minnesota
The 1991 World Series taught us that Minnesota is just a miserable place. It’s got ridiculously high taxes, the 3rd worst weather in the nation and incredible average in every other category. The fact is that if you like a frozen tundra, our “worst state to retire to” is actually better in all but one way.
Alaska
The absolute worst state to retire shouldn’t come as any surprise. Alaska is hard to live in period let alone retire in. It’s got the 2nd lowest population of retirees per 100K and the worst weather (by cold temps) in the nation. Add on the one of the highest costs of living, even with no state income tax and you can see why bankrate agrees with us, that Alaska is the worst state to retire to.
Our Best States To Retire Criteria
Income Tax
Income tax is a big deal in any season of life, but especially when you’re on a fixed income. While there are a number of states that don’t charge any income tax, the vast majority of states offer a bit of reprieve from income tax on social security and retirement income. To account for this we moved social security exemptions to another category and focused purely on retirement income. With more and more retirees using this opportunity as a 2nd career, it’s important to weigh how much of your income, from your pension or from your active work that you’re going to have to give up. Places like Florida and Texas rank well here, but so does a place like Alaska. Which is one reason why we needed multiple dimensions of this list.
Social Security Tax Exemptions
Imagine working, paying taxes which include social security only to be taxed again on your social security income. We did the math. For at least 38 states you won’t be in danger of being taxed unless you’re making some significant retirement income. However, it’s the principle of the thing. We created a separate category for Social Security and overall tax friendliness of retirement specific income.
Weather Grade
What good are metrics on finances if you don’t actually want to live there? The weather grade is a simple look at the average temperature in a given state. We didn’t give this a ton of weight because it can be problematic. Southeastern states fair well on this test but humidity isn’t accounted for. A state like California actually suffers because it’s so long. However, at this time it’s a good enough estimate and we do think it factors into a decision.
In fact, even with a lower weighting that other factors we were surprised that the colder the state was the less ideal it was for retirees.
Health Care
When we went to define the best states to retire in, we wanted to be as objective as possible. So many of lists have a clear bias and now that we’ve done the research we understand! Not everyone will enjoy the humid summers of Mississippi just because it’s one of the best places to retire due to it’s low cost of living, low real estate prices, and favorable tax laws, for example. Adding health care which itself is a blended average of availability of health services (are there hospitals nearby for example) as well as accounting for the age of these hospitals. This list of best states for your retirement is really just meant to help you narrow it down if you have the option to choose where to retire.
State Sales Tax
In addition to cost of living, we added the criteria of state sales tax. We also included a blended average of the municipalities (cities and counties) additional taxes. While retirees might consume less overall, the states with these taxes make everything more expensive and it should be factored in
Real Estate Prices
Whether you plan to rent, buy a home in a del webb community or use an assisted living facility the cost of real estate is going to be baked right into the budget. We weighed this one slightly more than some others because of the huge impact of housing on retirees. Unless you have a paid off house, you’re likely going to notice that housing is the most expensive line item in your budget.
Population Of Retirees
One of the downfalls of these best places to retire lists are they often look only at financial factors but then pick places that actually don’t cater very much to retirees. Then again how can you know a place is good for retirees? Well, one factor is that they already live there. Population of retirees in a given state tell us a lot about that state, because these retirees moved there and didn’t read our guide!
Crime Rates
No “best of places” is complete without a crime rate report. That’s the reason it’s included, however, it got the lowest weighting of the bunch. Why? Because states like New York and Illinois have below average crime ratings because of their inner city problems, which aren’t typically full of retirement options. We took your standard crime rate report, blended it to give more weight to violent crime and then knocked the weight down for our guide.
Cost Of Living
The cost of living index and it’s subsequent categories is very helpful but often it’s a bit of a crutch when it comes to these list. We used a weighted and blended average of the CoL categories. For example, we gave more weight to health, groceries and real estate than we did something like utitlities. The average retiree uses less utilities and overall consumes less, so we weighted these things as less important to retirees.
BankRate
Hat’s off to Bankrate. They had a great list and it inspired ours. We didn’t like all their methodology but we included it as a small weight to help places that somehow we might have missed. In the end it helped states like Michigan nudge out Iowa for the middle of the pack but didn’t really effect the top 10 or bottom 10.
