When you retire, one of the best things you’ll enjoy is a newfound sense of freedom. Many individuals approaching retirement say that they plan to use this freedom to relocate. In our working years, duties and responsibilities tend to dictate where we live. Once we retire, however, new possibilities open up! That’s why we’ve put together this guide on the best states to retire in. We’ve also included a list of the top 10 cities to retire in. Keep reading to find out why these are the best places to retire in the U.S.
Why Are These The Best States To Retire In?
What you might consider a great place to live right now may no longer serve you later in life. That’s because your incentives and priorities shift as you age. The factors that determine the desirability of retirement locales are different from those you would consider now.
To come up with our list of the best states to retire in the U.S., we considered the following factors as benchmarks:
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Tax Friendliness: States that are considered very tax-friendly offer benefits such as zero retirement income tax, or significant deductions on retirement income. These states also have low rates on sales, property, estate, and inheritance taxes. As these benefits diminish, a state’s tax friendliness rating goes from very friendly to not friendly at all.
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Cost Of Living: Cost of living is important no matter your age, but it tends to demand even more consideration from retirees. This is because they are typically on a set retirement income and a limited budget. States with low cost of living are extra attractive for those living out their golden years.
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Average Healthcare Costs: This indicator measures the average healthcare costs for a retired couple aged 65 years old, who are expected to live to their full life expectancies. Currently, full life expectancies are 87 for males and 89 for females. The average healthcare cost per household in the U.S. is currently at $423,523.
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Household Income: Last but not least, household income for retirees was used as a general indicator of the state’s economic health. The current average household income in the U.S. is $53,799.
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Share Of Population In Retirement Age: The average retirement-age population in the U.S. is around 14.5%. States with a population share higher than the national average indicate that they are a popular pick for senior citizens. You can also get a sense of whether it’ll be easier or harder to build community with individuals in your age group.
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10 Best States To Retire In
Below, we’ve assembled the 10 best states to retire in the U.S. This list was carefully curated based on the factors discussed above. Deciding where to live is a personal choice that will depend on a variety of other factors, such as proximity to certain attractions, the weather, or distance from grandchildren, to name a few examples. We hope that you will use this list as a benchmark — to get to know what factors make for a great place to retire, and to make sure you’re putting them into your decision-making as well. Based on our calculations, the 10 best states to retire in are:
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South Dakota
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Hawaii
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Georgia
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North Dakota
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Tennessee
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Alabama
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Virginia
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Florida
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New Hampshire
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Utah
1. South Dakota
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Tax friendliness: Very friendly
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Cost of living: 4% below U.S. average
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Healthcare costs (for retired couples): Below average
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Average retirement household income: $43,712
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Share of population in retirement age: 15.2%
South Dakota’s affordability and tax friendliness for retirees pushed it to the top spot. The Mount Rushmore state may not be known as a dream retirement spot, but you’d be sure to enjoy low living expenses and low health care costs.
2. Hawaii
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Tax friendliness: Friendly
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Cost of living: 87% above U.S. average
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Healthcare costs (for retired couples): Below average
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Average retirement household income: $71,997
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Share of population in retirement age: 16.1%
Who wouldn’t want to retire in Hawaii? This decision is complicated, as the island state is notorious for its extremely high cost of living. However, if you can afford it, you’ll enjoy idyllic living with plenty of physical activities and a top-rated healthcare system. What’s more, Hawaii features the nation’s lowest property tax rate.
3. Georgia
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Tax friendliness: Very friendly
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Cost of living: 7% below U.S. average
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Healthcare costs (for retired couples): Below average
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Average retirement household income: $50,607
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Share of population in retirement age: 12.3%
Want a perfect combination of warm weather and low living costs? Georgia could be the peachy state that you’re looking for. In addition, Georgia offers tax advantages for retirees, plus affordable healthcare.
4. North Dakota
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Tax friendliness: Friendly
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Cost of living: 1% above U.S. average
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Healthcare costs (for retired couples): Below average
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Average retirement household income: $46,763
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Share of population in retirement age: 14.2%
The Dakotas may not strike you as the perfect retirement spot, but both states have made the list. North Dakota offers the same benefits as its sister state, except that it does not offer retirement tax breaks. However, income taxes are so low that it’s still considered tax-friendly. If your priority is economic stability, one of the Dakotas may be worth consideration.
5. Tennessee
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Tax friendliness: Friendly
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Cost of living: 12% below U.S. average
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Healthcare costs (for retired couples): Below average
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Average retirement household income: $47,891
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Share of population in retirement age: 15.0%
Every major city in Tennessee offers below-average cost of living, including health care. With financial concerns increasing for Americans, especially for our older generations, this state is a great choice if budget is your concern. It’s also tax-friendly.
6. Alabama
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Tax friendliness: Friendly
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Cost of living: 13% below U.S. average
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Healthcare costs (for retired couples): Below average
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Average retirement household income: $44,934
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Share of population in retirement age: 15.3%
Many retirees flock to Florida, but you can get some of the same benefits in its neighboring state: Alabama. Alabama is also warm, with lovely beaches and golf resorts — but all at a lower price!
7. Virginia
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Tax friendliness: Friendly
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Cost of living: 7% above U.S. average
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Healthcare costs (for retired couples): Below average
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Average retirement household income: $59,869
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Share of population in retirement age: 13.8%
Virginia is a state that was made for retirement. The average household income for retirees is higher than average, with relatively affordable healthcare costs. Social Security income isn’t taxed, and also, retirees can deduct up to $12,000 of income per person.
8. Florida
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Tax friendliness: Very friendly
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Cost of living: 1% above U.S. average
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Average healthcare costs (for retired couples): At the national average
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Average retirement household income: $51,187
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Share of population in retirement age: 19.1%
Florida making the list should be no surprise. It’s a wildly popular location for retirees for a reason. It offers warm weather, beautiful beaches, and is super tax-friendly. If you choose to retire in Florida, you’ll be sure to be a part of a great retirement community.
9. New Hampshire
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Tax friendliness: Very friendly
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Cost of living: 18% above U.S. average
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Average healthcare costs (for retired couples): At the national average
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Average retirement household income: $53,204
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Share of population in retirement age: 15.9%
New Hampshire is a tax haven – it won’t tax you for your Social Security benefits, and it won’t charge you any sales tax. The significant tax savings help counterbalance the slightly higher cost of living. The United Health Foundation states that New Hampshire ranks as one of the best states for senior health.
10. Utah
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Tax friendliness: Not tax friendly
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Cost of living: 4% above U.S. average
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Average healthcare costs (for retired couples): Below average
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Average retirement household income: $53,211
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Share of population in retirement age: 10.0%
If you envision having a healthy, active retirement, then Utah might be the state for you. This playground state offers tons of outdoor options for recreation with national parks and monuments. You’ll never get tired of hiking, winter sports, climbing, and the like.
The Best Cities To Retire In
Interestingly, the best cities to retire in are not necessarily the state capitals of the 10 states in the list above. That’s because big cities represent their own microcosms that deserve their own ranking system. If you feel like you would make your decision on where to retire based more around a specific city rather than a state, then perhaps you should pay closer attention to these rankings. They were determined based on the following factors that indicate the general wellbeing of retirement-aged residents:
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State Income Tax
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Median Home Price
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Median Monthly Rent
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Average Temperatures
1. Fort Myers, Florida
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State Income Tax: No income tax
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Median Home Price: $219,200
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Median Monthly Rent: $1,035
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Average Temperatures: 84℉/ 64℉
Of all the cities in the United States, Fort Myers, Florida, takes the cake. With no income tax, cheap cost of living, and great weather, you’ll be sure to enjoy your days. Famous spots like Cape Coral, Fort Myers Beach, and Sanibel Island are all nearby attractions.
2. Sarasota, Florida
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State Income Tax: No income tax
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Median Home Price: $237,260
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Median Monthly Rent: $1,089
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Average Temperatures: 82℉/ 64℉
Sarasota is just south of Tampa and offers all sorts of water-related activities. Its beaches are known for their super fine, white sand and crystal clear waters. It’s also home to Siesta Key, which is thought to be one of the nation’s best beaches.
3. Lancaster, Pennsylvania
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State Income Tax: No tax on Social Security income
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Median Home Price: $196,025
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Median Monthly Rent: $957
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Average Temperatures: 62℉/ 42℉
If you prefer a little more variety, Lancaster could be a great option for you. It features a great mix of outdoor activities as well as city life. You could be in farmland visiting Amish communities in the morning and then attend an art festival downtown the same night. You’ll also enjoy the mountains and hiking.
4. Asheville, North Carolina
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State Income Tax: No tax on Social Security income
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Median Home Price: $248,500
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Median Monthly Rent: $849
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Average Temperatures: 58℉/ 52℉
If you’re an art-lover, definitely take a look at Asheville, North Carolina. This city is packed with galleries, museums, and architectural features. If you like beer, you’re also in luck! Asheville is known for its hot craft brewery scene. You can also get outdoorsy in nearby national parks and forests.
5. Port St. Lucie, Florida
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State Income Tax: No income tax
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Median Home Price: $211,083
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Median Monthly Rent: $1,074
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Average Temperatures: 82℉/ 63℉
Port St. Lucie sits just between Orlando and Miami. You can enjoy an affordable cost of living while having access to two of the nation’s major cities. If you’re asking for consistently hot weather with lots of golfing opportunities, Port St. Lucie is your answer. Hopefully, you and your partner are also into water adventures.
6. Jacksonville, Florida
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State Income Tax: No income tax
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Median Home Price: $174,658
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Median Monthly Rent: $1,109
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Average Temperatures: 79℉/ 61℉
We promise this is the last city in the Sunshine State that’s featured on this list. However, this goes to show why Florida is a popular pick for retirees, time after time.
7. Winston-Salem, North Carolina
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State Income Tax: No tax on Social Security income
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Median Home Price: $145,725
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Median Monthly Rent: $732
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Average Temperatures: 70℉/ 49℉
Winston-Salem is a hot spot for lovers of food, arts, and culture. This locale is a melting pot, serving as a home for a diverse range of immigrants and southern roots. Picture yourself strolling down one of the buzzing streets, stopping to try out BBQ or Indian curry. The city offers performing arts and plenty of museums.
8. Nashville, Tennessee
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State Income Tax: No income tax
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Median Home Price: $248,883
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Median Monthly Rent: $951
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Average Temperatures: 70℉/ 49℉
If you want to live in Nashville, then you should certainly be a music lover. This city is home to a large music industry, the birthplace of many famous artists. You can enjoy live music around the clock on the Broadway strip. If you like sports, you’re also in luck – Nashville is home to the NHL’s Predators and the NFL’s Tennessee Titans.
9. Grand Rapids, Michigan
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State Income Tax: No tax on Social Security income
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Median Home Price: $181,533
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Median Monthly Rent: $826
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Average Temperatures: 58℉/ 40℉
Grand Rapids offers an affordable cost of living, including groceries, health care, and housing. Make sure you’re prepared for consistently cool weather year-round, which is great for enjoying nature. The city also has a hot craft brewery scene to enjoy.
10. Dallas-Fort Worth, Texas
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State Income Tax: No income tax
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Median Home Price: $248,375
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Median Monthly Rent: $1,022
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Average Temperatures: 77℉/ 56℉
Last but not least, we’ve arrived in Dallas-Fort Worth, Texas. Sports-lovers flock to this Lone Star city, which serves as home to major sports teams from the NFL, the NBA, and the MLB. Have grandkids? You’ll be sure to be a popular grandparent when you take them to local attractions such as Six Flags or the Great Wolf Lodge water park. Make sure to dust off your cowboy boots and your two-step skills.
Summary
The best state to retire in is not necessarily an obvious choice. When we retire, our incentives change. Because we are no longer working, and because we are aging, we’ll need to consider things such as healthcare affordability and whether or not we’ll get retiree-related tax breaks. That’s why in our ranking system, we’ve emphasized locations that offer the best environment for your finances and your health. If you tend to identify more with a city rather than a state, there are also great options out there! We hope that you’ve found at least one or two top contenders from our lists.
Of the best states to retire in, which one would you pick, and why? Let us know your top pick in the comments below!
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