Most people save for a lifetime so they can enjoy their retirement years. However, those savings go farther in some states than others. Millions of Americans are reaching retirement age each year, and many are deciding where to retire.
Some choose to remain in the same place for various reasons, like having family nearby. However, others decide to retire at the beach or another favorite spot. For those choosing to relocate for retirement, affordability is often one of their biggest concerns.
Other concerns include crime rates, healthcare options, and available activities. We’ve put together a list of the ten best states to retire in and five that you should avoid. Keep reading for all the details.
10 Best States For Retirement
We considered several factors when compiling our rankings of the best places to retire. We examined living costs, weather, access to health care, income tax rates, quality of life, and others.
While your retirement plans might take you elsewhere, here are the ten best states in America to spend your retirement years.
#1 - Florida
The Sunshine State ranks at the top of our list for several reasons. Florida not only has fabulous weather, but its affordability is one of the best in the nation. Florida has no state income tax, and its sales tax and property tax rates are quite low compared to many other states.
Plus, who doesn’t love the miles and miles of beautiful beaches the state has to offer? Sure, Hawaii has plenty of beaches, but Hawaii is much more expensive. While Florida only has average healthcare options, the state has proven to be a great place for your overall well-being. There are plenty of retirement communities in the state, so you will never be short on activities with friends.
In fact, Florida ranks second in the nation for the number of people over 65 per capita. For all these reasons, Florida ranks #1 on our list of the best places to retire in the US.
#2 - Georgia
Coming in at #2, the Peach State shares many of the same advantages as Florida. Georgia is a highly affordable state with great weather. The state is tax-friendly to those on Social Security, and it offers a little bit of everything regarding living options. You can live in the mountains in the northern part of Georgia or head closer to the coastline in the state’s southeastern part.
Crime tends to be a little higher in the major metro areas, like Atlanta, so most retirees choose to avoid the big cities. However, Georgia is still a great place to retire. The state’s healthcare and wellness rankings are average, but the other advantages more than make up the difference.
#3 - Virginia
Virginia is a popular retirement destination for many reasons! It ranks #3 on our list because it provides a great mix of almost everything retirees seek. Virginia is near the top of the list when it comes to culture, wellness, and healthcare options. A wide range of activities can be done almost year-round in the state.
While the cost of living is a little higher in Virginia than in some other states on our list, it still provides an excellent place for retirees to call home. Retirees here tend to have an outstanding quality of life, and the U.S. Census Bureau has found that more and more retirees are deciding to head to Virginia for this reason.
#4 - Colorado
If wellness and healthcare options rank high on your list of needs, then Colorado is the place for you. Colorado has some of the highest metrics in America regarding these two categories. Outdoor activities abound in the great state of Colorado. Whether hiking in the Rocky Mountains, skiing or fishing, there is always something to do outside.
Colorado might not be the most affordable state on the list, but it is an excellent option for those looking for a place with a tremendous overall wellness score.
#5 - Delaware
Many might be surprised to learn that Delaware is one of the best retirement states, scoring very high on the affordability metric for retirees. Retiring in Delaware typically means your tax burden will be lighter than in many other states. Another benefit to retirees is that Delaware has no inheritance tax. This means your beneficiaries will not pay taxes on property they inherit from your estate. However, remember that your estate might still be subject to a federal estate tax regardless of where you live.
Delaware also does not tax Social Security benefits, so it is a great place to live from an affordability perspective. However, the quality of life here is not as high as in some other locations, and some people find this to be negative. If you are looking for affordability, then Delaware is a great option.
#6 - Alabama
You can stretch your retirement income farther in Alabama than in any other state. Alabama is a highly affordable place to live, with low property taxes and very reasonable state income taxes. Similar to some of its southern neighbors, Alabama offers almost any outdoor activity you could want.
Alabama has a little bit of everything, from mountains to lakes to beaches. There is a reason that some towns along the Alabama Gulf Coast are some of the fastest-growing cities in America. Overall, wellness and healthcare options are a little lower here than in other places, but the affordability and quality of life make it a place many retirees flock to.
#7 - Missouri
Missouri is another excellent option for those looking to stretch their retirement income. Missouri is one of the most affordable states in America, and it offers an exceptional quality of life that draws many people to retire here. Missouri offers many great outdoor activities, which can be done almost year-round.
The weather only tends to keep people indoors for a couple of months during the middle of winter. Crime is higher in Missouri than in other states, partly due to bigger cities like St. Louis. If you stay away from the metro areas, you don’t need to be concerned about the crime rate.
#8 - Tennessee
Tennessee ranks as the most affordable option on the list. If your finances are your only factor, Tennessee is the place to go. Affordable housing, low sales taxes, and no inheritance tax make Tennessee an attractive option for retirees. There is always plenty to do in Nashville, Memphis, and Knoxville.
The weather in Tennessee is excellent all year, and the state has terrific healthcare options. If you are looking for a great place to spend your golden years, Tennessee might be the place for you.
#9 - Wyoming
Wyoming ranks near the middle of the road in terms of affordability, but it has some of the lowest crime rates in the U.S. Plus, the culture in Wyoming ranks exceptionally high. While most people don’t consider Wyoming a traditional retirement state, many love the quality of life here.
Although the weather can get a little unpleasant during the winter, the summertime months are usually excellent. Wyoming is a great option if you need a great place to retire that is a little more off the beaten path.
#10 - Arizona
Arizona might have the best weather of any state on the list. Many lists rank Arizona as having the best weather of any state in the country. Retirees like to spend their time doing activities they enjoy, and you’ll have plenty of time to do that in the Arizona weather.
Although it’s not the most affordable state on the list, Arizona is still in the top 25% of the country when it comes to the cost of living. Arizona has good access to health care, and its overall wellness ranks high. Arizona is the place to be during your retirement years if you enjoy the sun.
Honorable Mention - South Carolina
South Carolina barely missed our top 10, so we had to include an honorable mention. South Carolina blends great affordability with great weather and culture. There are many activities across the state, and South Carolina is quite tax-friendly. During retirement, you’ll find great food and plenty of activities in South Carolina. South Carolina should undoubtedly be considered if you are looking for a place to retire.
KEY TAKEAWAYS
- Florida ranks #1 on our list of best places to retire. There are a lot of great year-round activities and plenty of retirement communities.
- New Jersey tops the list of least desirable places to retire. It has a high cost of living and a high crime rate in many parts of the state, plus winters can be miserable.
- Several states tax your Social Security benefits, and despite that, a few still made the list of the top 10 places to retire.
5 Worst States For Retirement
Now that we’ve discussed the best states for retirement, you should also be familiar with the states on the other end of the spectrum. The worst states for retirement have high taxes, high crime rates, bad weather, or some combination of all those things.
Here are the states you should avoid when making your retirement plans.
#1 - New Jersey
New Jersey boasts one of the highest cost-of-living metrics in America. Taxes are high here, and the overall quality of life in New Jersey tends to be relatively low. Crime rates are high in many parts of the state, and the weather can be downright dreadful during winter. Staying indoors and paying high taxes is no way to spend your retirement. It would be best if you avoided New Jersey when you get ready to retire.
#2 - New York
Like New Jersey, New York has an extremely high cost of living. Similarly, the weather can be challenging during the winter months. Property taxes are very high, and the quality of life is on the lower end of the scale.
While New York has excellent access to health care options, that does not usually compensate for the other drawbacks. Many move away from New York to spend their retirement in more enjoyable states.
#3 - Maryland
When you think of expensive states to live in, Maryland might not immediately come to mind. However, Maryland ranks very low in affordability — right behind New York and New Jersey. Culture index scores in Maryland also tend to rank low. Maryland taxes are high, and crime rates in the state are not the greatest. Many people who live and work in Maryland decide to leave upon retirement.
Maryland's plus side is that the state scores high in the overall wellness of its citizens. However, if you want an affordable place to live with great weather, Maryland is not the place for you.
#4 - Minnesota
It is probably no secret that Minnesota winters can be brutal. Many people who live in Minnesota migrate south for the winter and return home in the spring. This is one reason so many retirees leave the state for better weather upon retiring. In addition to the lousy weather, Minnesota is expensive, with higher-than-average taxes. Now, you can see why most people have not decided to retire and move to Minnesota.
#5 - Alaska
According to the U.S. Census Bureau, Alaska has the lowest population of individuals 65 or older. One of the biggest reasons for this is the brutal weather in Alaska for several months out of the year. Surprisingly, Alaska also has high crime rates compared to other states.
Much of Alaska is extremely remote, with little access to health care. This leaves Alaska's overall health and wellness score relatively low. When ready to retire, consider moving somewhere warmer instead of Alaska.
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Best Places For Tax-Friendly Social Security Treatment
Most retirees rely on Social Security benefits for at least a portion of their income during retirement. Keeping taxes to a minimum helps them put more money in their pockets.
However, some states tax Social Security benefits, while others do not. Understanding which states are more tax-friendly for your Social Security payments is beneficial.
Most states do not tax Social Security benefits. Only 12 states in America levy a tax on these benefits. If you live in one of the following states, you can expect that at least some of your Social Security benefits will be taxed.
- Colorado
- Connecticut
- Kansas
- Minnesota
- Missouri
- Montana
- Nebraska
- New Mexico
- Rhode Island
- Utah
- Vermont
- West Virginia
The following states do not tax Social Security at the state level. So, if you live in one of these states, you will not need to worry about paying taxes on your Social Security benefits.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Mississippi
- Nevada
- New Hampshire
- New Jersey
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- South Carolina
- South Dakota
- Tennessee
- Texas
- Virginia
- Washington
- Wisconsin
- Wyoming
TIP
When deciding where to retire, you should evaluate which states tax your Social Security, which have state income taxes, which have low crime rates, which accommodate your favorite activities, and where you feel you’ll find the most enjoyment.
Other Considerations When Planning For Retirement
Weather and the taxation of Social Security benefits are not the only things to consider when deciding where to spend retirement. There are many other factors that go into your decision.
- First, the state’s treatment of retirement income from personal retirement plans, like a pension or 401K, should be a big factor. You’ll want to look for states that do not tax retirement income or at least have lower rates.
- Some states even have different rules regarding things like a backdoor Roth IRA. In addition to Social Security, most retirees receive some income from one of these sources.
- Another factor that influences your decision is likely the proximity of family. Many people choose to stay near family members, like children, who can help them during their elderly years. Moving away from family can be difficult, especially when children and grandchildren are involved.
- Finally, most people would agree that the biggest deciding factor should be your own desires.
If you have always dreamed of retiring in a certain place, you should not let a few percentage points of taxation stop you.
Even though living in New York might be more expensive, if that has always been your dream, go for it! If you can afford to live in a specific place, you should not let some of these factors stop you!
The Bottom Line
The United States offers many great states where you can retire, and many are incredibly affordable. Many people often try to find an outstanding balance of affordability, weather, and health care.
Thankfully, many states include all of those items. Any state on our Top 10 list would be a great place to retire, and you should also be aware of the states to avoid.
High taxes, higher crime rates, and lower quality of life scores make the states on our “worst states” list ones that you should avoid when you prepare to leave the workforce.
Frequently Asked Questions
It is difficult to name a single state as the cheapest place to retire. Several factors factor into a state’s total cost of living.
It would help if you considered state income taxes, taxation of Social Security, property taxes, and the cost of goods and services in the area.
If you are looking strictly at affordability, Tennessee, Oklahoma, and Georgia are some of the least expensive states to retire in. These states offer low taxes, affordable housing, and a low overall cost of living.
The states that tend to be the most affordable are Tennessee, Oklahoma, and Georgia. However, you should also consider things like access to low-income programs.
Some of the most affordable states do not have robust welfare programs for people with low incomes. You must balance your need for these types of programs with the overall affordability of the state.
Typically, you will want to avoid states that have high tax rates, impose inheritance taxes, and ones that tax Social Security benefits. In general, you will want to avoid New York and New Jersey because of the extremely high cost of living in those states.
Similarly, Minnesota taxes Social Security has high property taxes and terrible weather. You should likely avoid any of the five states listed in this article as the worst states to retire.
You can find a Social Security Administration office near you by using our SSA office locator and searching for your closest location.
