Retirement often brings a slower pace of life. No more sweating work deadlines, playing office politics or struggling to stay afloat in a city with a soul-crushing commute and a punitive cost of living. The end of your career also raises new questions about where and how to spend your days now that you’re no longer tied to a specific location.
Should you settle down by the beach or in the mountains? Do you prefer golf or cross-country skiing? Perhaps most importantly, where do your kids, grandkids, friends and health care providers live? Those are deeply personal questions. To find some objective answers to the where-to-retire question, Bankrate crunched a bevy of statistics on costs of living, public health and other metrics.
For this study, Bankrate looked at five broad categories: affordability, wellness, culture, weather and crime. We placed the heaviest weighting on affordability. Home prices have shattered one record after another since the COVID pandemic began, and inflation rocked the U.S. economy in 2022. As a result, many retirees are looking for ways to stretch their savings.
We acknowledge there’s plenty of subjectivity in choosing a place to live in retirement. If you own a paid-off home in a high-cost area like Boston or San Francisco, maybe affordability isn’t a priority for you. And, of course, not everyone likes the sweltering summers of the Sun Belt states that populate the top of our rankings.
The best states to retire in 2022
According to Bankrate’s study, Florida is the best state for retirement in 2022, followed by Georgia, Michigan, Ohio and Missouri. Alaska, on the other hand, held last place in our ranking. The state was dragged down by back-of-the-pack scores in affordability and weather. Alaska did rank first in one subcategory – its residents bear the nation’s lowest tax burden.
Why should retirees pick Florida? The Sunshine State has long been a haven for retirees. If you like a warm climate, Florida has the second-hottest average temperatures, right behind Hawaii. However, the high incidence of hurricanes and tornadoes hurts Florida’s weather ranking.
The state topped our ranking of culture and diversity. If you’re looking for retirement-age friends, you’ll have a good chance of finding them in this state where 21 percent of the population is age 65 and older. That’s the second-largest share of 65+ folks of any state, Census data shows. Meanwhile, for potential retirees seeking a cultural melting pot, Florida boasts solid racial diversity and a significant LGBTQ population.
Affordability was once a big selling point for Florida retirees, but that advantage is fading. The state’s cost of living has been rising, although the tax burden remains light. Florida ranks No. 18 in Bankrate’s affordability index.
The rest of the top five:
- Georgia: For retirees considering a move to Georgia, affordability is one big selling point. The state combines a low cost of living and a light tax burden to rank No. 7 in affordability. Weather is another strong point. The state has an average annual temperature of 64 degrees, the fifth-warmest in the nation. Earthquakes are rare, and tornado risk is about average. The one downside is hurricanes — Georgia’s small coastline puts it at risk of tropical cyclones. Georgia places in the middle of the pack in our rankings for both wellness and crime. The state’s only weak spot is in the culture category — the Peach State has one of the nation’s lowest percentages of over-65 residents, and it ranks near the bottom in arts and entertainment establishments per capita, based on a Bankrate analysis of Census data.
- Michigan: This cold-weather state seems an odd choice for the Top 5, but Michigan boasts the best affordability in the nation, based on the combination of a low cost of living and a light tax burden. The state also did well in wellness, placing No. 12 in that category.
- Ohio: Another Rust Belt surprise, Ohio scored well on affordability and didn’t suffer any major setbacks in other categories.
- Missouri: Fifth-place Missouri is affordable and has a comparatively moderate climate. However, the Show-Me State’s culture, crime and wellness scores are subpar.
Experts: How to pick your best state to retire
Considering a retirement move? Here’s advice from experts who help retirees and soon-to-be-retired workers through the decision:
Laura Kovacs, former director of education at the Scottsdale Area Association of Realtors in Arizona and a recent retiree herself: “Spend some time in places where you want to live before you commit to moving there. Go to a variety of different places that you seem to be attracted to — places that have a lower cost of living and lower property taxes — and test them out for a while. If you’re interested in Florida or Arizona or California, stay there for a while and see if you like the climate at the time of year you’re going to be living there. Make sure it’s really as affordable as you thought. When you’re still working, take some time to go preview different types of communities and different types of lifestyles. And when you’ve retired, maybe try renting for a while before you commit to buying.”
Clark Kendall, CFP, CFA, is president of Kendall Capital Management in Rockville, Maryland, and author of “Middle-Class Millionaire”: “Family is the biggest consideration. When I see people retire and move to different parts of the country, 70 to 80 percent of the time, it’s to be close to family. Access to medical care is another important factor. From a financial perspective, there are a lot of things to consider. How will your income be taxed? Some states offer tax breaks on retirement income. Maryland not only has an income tax, but we’re also one of only seven states that has an estate tax. Look at how you’re going to spend your money, too. Even though Texas and Florida have no income tax, they do have higher homeowners insurance costs because of hurricanes. It’s hard to make a blanket statement. If you’re making $100,000 in retirement income and moving to a $400,000 house, it’s a different scenario than if you’re making $1 million and moving to a $5 million house.”
Ginni Field, a real estate broker in Oceanside, California, who specializes in senior buyers and sellers and holds the National Association of Realtors’ Senior Real Estate Specialist designation: “Sometimes, people just want to get out of the snow. Other times, they want to be closer to family. When you’re considering a community, you have to think about what you still want to do. Do you still want to be able to play golf, tennis or pickleball? What’s vitally important for people in that age group are medical care, access to shopping and public transportation. I have one client who’s 83 [years old] who didn’t want to live in an active adult community because she had pre-determined that it would be filled with old people. I showed her around one community, and she fell in love with it.”
(Are you planning to retire in 2022? Do these seven things now.)
Full results: How your state ranks for retirement
Bankrate looked at several public and private datasets related to the life of a retiree. The study examined five categories (weightings in parentheses): affordability (40 percent), wellness (20 percent), culture (15 percent), weather (15 percent) and crime (10 percent).Affordability was calculated using the Cost of Living Index from the Council for Community and Economic Research, published in July 2022, and property and sales tax rates from the Tax Foundation’s rankings for 2022. For wellness rankings, Bankrate used the Sharecare Community Well-Being Index released in July 2022. The index measures a variety of factors, including access to health care, access to food, physical health and economic security.Culture scores were calculated using the number of arts, entertainment and recreation establishments per capita and adults 65 and older per capita from the U.S. Census Bureau. Diversity scores used the Census’ racial and ethnic diversity index and LGBTQ population densities compiled by the Movement Advancement Project. For weather scores, we relied on three decades of average daily temperature data from the National Oceanic and Atmospheric Administration. We also used NOAA data for tornado strikes and hurricane landfalls, along with earthquake reports from the U.S. Geological Survey.We calculated crime using the rates of property crimes and violent crimes per 100,000 inhabitants for each state from the FBI’s 2019 Crime in the United States report. (Because the FBI significantly changed the reporting format for 2020 data, we did not rely on those statistics.)
(Video) All 50 States Ranked WORST To BEST
FAQs
The Best And Worst States For Retirement: All 50 States, Ranked | Bankrate? ›
According to Bankrate's study, Florida is the best state for retirement in 2022, followed by Georgia, Michigan, Ohio and Missouri. Alaska, on the other hand, held last place in our ranking. The state was dragged down by back-of-the-pack scores in affordability and weather.
Which state has best state retirement benefits? ›1 state to retire in, Virginia has taken the top spot this year, according to personal finance website WalletHub's “2023′s Best States to Retire” study. WalletHub evaluated all 50 U.S. states in three key categories: affordability, quality of life and access to health care.
What are the top 5 retirement states? ›The top five states to retire, according to the site, are Virginia, Florida, Colorado, Wyoming and Delaware, in that order. You can see the rest of the state rankings in WalletHub's report. WalletHub uses 47 “key indicators” in three areas — affordability, quality of life and healthcare — to calculate its rankings.
What US states to avoid when you retire? ›Kentucky ranks as the worst state to take up retirement in 2023, according to a WalletHub study. This year, the state landed in last place which was occupied by New Jersey in 2022. WalletHub ranked all 50 U.S. states based on three key categories: affordability, quality of life and health care.
Where you should retire in the US states ranked from worst to best? ›| Overall Rank | State | Quality of Life |
|---|---|---|
| 18 | California | 19 |
| 19 | Alaska | 36 |
| 20 | Arizona | 35 |
| 21 | Wisconsin | 14 |
Five of the 10 most affordable states — Wyoming, Idaho, Colorado, Delaware and Tennessee — rank among the nation's most tax-friendly, according to a Kiplinger analysis. The least affordable states for retirees are clustered on the coasts: Massachusetts, New York, Connecticut, New Jersey and California.
What state gives you the most Social Security benefits? ›- Total Social Security Received: $9.34 billion.
- Total Number of Recipients: 6,166,205.
The best state to retire: Vermont
Vermont quietly has a lot going for it, including very good scores in public health, crime, quality of life, and cost of living. It also has lower-than-average housing costs as well as reasonable taxes for retirees.
Countries Natixis ranked as secure retirement locations are mostly concentrated in Europe but also include New Zealand and Australia. The top three countries in the rankings are Norway, Switzerland and Iceland, all of which have life expectancies of 83 years, compared to 77 in the U.S. and the world average of 72.
Why retirees leaving Florida? ›“In addition to inflation, housing prices and increasing costs of living in Florida, retirees are also leaving for other reasons,” says Dutch Mendenhall, Founder of RAD Diversified REIT. “Higher auto and home insurance along with a 7% sales tax on already high-inflation goods can put a strain on retirement income.”
Can you retire on $3,000 a month? ›
If you have a low living cost and can supplement your income with a part-time job or a generous pension, then retiring on $3,000 a month is certainly possible.
What states do not pay Social Security taxes? ›- Alaska.
- Florida.
- Nevada.
- New Hampshire.
- South Dakota.
- Tennessee.
- Texas.
- Washington.
To acquire the full amount, you need to maximize your working life and begin collecting your check until age 70. Another way to maximize your check is by asking for a raise every two or three years. Moving companies throughout your career is another way to prove your worth, and generate more money.
Where is the cheapest and warmest place to retire? ›- Tarboro, North Carolina. ...
- Melbourne, Florida. ...
- Lakeland, Florida. ...
- Mountain Home, Arkansas. ...
- Mount Airy, North Carolina. ...
- Kingsport, Tennessee. ...
- Roanoke, Virginia. ...
- College Station, Texas.
The cost of living in America varies dramatically between each state. From Mississippi being the cheapest state to live in with a median household income of $46,511 to Hawaii being the most expensive state with a median household income of $83,173.
What is the cheapest and safest state to live in? ›- Mississippi. Coming in as the cheapest state to live in in the United States is Mississippi with a cost of living index score of 83.3. ...
- Kansas. ...
- Alabama. ...
- Oklahoma. ...
- Georgia. ...
- Tennessee. ...
- Missouri. ...
- Iowa.
Ecuador. If you're looking for a country where you can retire outside the US comfortably with $800 per month and experience one of the most ecologically diverse places in the world, then Ecuador might be for you. The go-to city for US retirees in Ecuador is Cuenca, which also happens to be a UNESCO World Heritage site.
What happens to my Social Security if I move to another state? ›No matter where in the United States you live, your Social Security retirement, disability, family or survivor benefits do not change.
Where can I retire on $1,300 a month? ›Panama: A Home Away from Home
You can retire comfortably on $1,300 per month, and it's one of the best countries for quality of life. What's more, English is widely spoken, and you can use your US money anywhere across the country. The country also offers first-rate hospitals, and many of its doctors are US trained.
The maximum Social Security benefit in 2023 is $3,627 at full retirement age. It's $4,555 per month if retiring at age 70 and $2,572 if retiring at age 62. A person's benefit amount depends on earnings, full retirement age and when they take benefits.
What is the cheapest state to retire in 2023? ›
Rather, Alabama is the most affordable state to retire in, according to WalletHub's “2023 Best States to Retire.” The analysis compared all 50 states across three key categories: health care, quality of life and affordability.
Where is the best place to retire in the United States? ›Maine topped The Motley Fool's list of best U.S. states to retire, with high marks for quality of life, safety, and health care cost and quality. The state has the highest percentage of residents over age 65, so retirees can find like-minded neighbors who enjoy the outdoors, natural beauty, and reliable health care.
Why is Virginia good for retirees? ›Virginia is the top state to retire to, according to a new study from WalletHub. Virginia has a good balance of affordability, quality of life and health care, ranking high in all three categories. WalletHub points to the commonwealth's tax friendliness to retirees and great access to adult volunteer activities.
Where is the safest place to put your retirement money? ›Most of our experts agree that one of the safest places to keep your money is in a savings account insured by the Federal Deposit Insurance Corporation (FDIC). “High-yield savings accounts are an excellent option for those looking to keep their retirement savings safe.
Where can I retire comfortably on Social Security? ›- Louisiana. 2022 Average Rent: $1,020. ...
- Wyoming. 2022 Average Rent: $1,038. ...
- Montana. 2022 Average Rent: $1,033. ...
- Oklahoma. 2022 Average Rent: $1,052. ...
- North Dakota. 2022 Average Rent: $871. ...
- Missouri. 2022 Average Rent: $1,014. ...
- Iowa. 2022 Average Rent: $937. ...
- South Dakota.
Towns like Sequim, Washington, Linden, Michigan, and Thermopolis, Wyoming offer perks like more affordable housing, favorable tax treatment and proximity to major metros. Take Our Poll: Are You Planning To Buy or Sell a House This Year?
Is it better to retire in Texas or Florida? ›A new ranking by banking and credit union library Bank Locations listed Texas as the best state for retirees in 2023. Michigan also beat out Florida as a more appealing locale for older Americans, based on factors like cost of living, quality of life and access to healthcare.
What city in Florida has the most retirees? ›Cape Coral / Fort Myers
Cape Coral/Fort Myers tops this list for recreation and entertainment, offering a wide spectrum of activities for every retiree. It's home to the most active retirement communities in Florida.
According to data from the BLS, average incomes in 2021 after taxes were as follows for older households: 65-74 years: $59,872 per year or $4,989 per month. 75 and older: $43,217 per year or $3,601 per month.
What is the average Social Security check? ›According to the Social Security Administration (SSA), the average monthly retirement benefit for Security Security recipients is $1,781.63 as of February.
How much does the average retired person live on per month? ›
People ages 65 and older had an average income of $55,335 in 2021. Average annual expenses for people ages 65 and older totaled $52,141 in 2021. 48% of retirees surveyed reported spending less than $2,000 a month in 2022. 1 in 3 retirees reported spending between $2,000 and $3,999 per month.
At what age are pensions not taxable? ›If you receive pension or annuity payments before age 59½, you may be subject to an additional 10% tax on early distributions, unless the distribution qualifies for an exception.
What state has the lowest taxes? ›There are nine states with no income tax – Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, One of those states, however — New Hampshire — does tax dividends and interest.
At what age is Social Security not taxable? ›Social Security benefits may or may not be taxed after 62, depending in large part on other income earned. Those only receiving Social Security benefits do not have to pay federal income taxes.
How do I get 100% Social Security? ›If you start receiving benefits at age 66 you get 100 percent of your monthly benefit. If you delay receiving retirement benefits until after your full retirement age, your monthly benefit continues to increase.
What is the secret Social Security bonus? ›As Long as Possible, Wait
Your Social Security benefits will be permanently reduced by up to 30% if you claim "early," at age 62. However, waiting until 70 years old has the opposite effect. Your monthly benefits will receive an additional 8% "bonus" for each year you delay claiming benefits past full retirement age.
You must have worked and paid Social Security taxes in five of the last 10 years. • If you also get a pension from a job where you didn't pay Social Security taxes (e.g., a civil service or teacher's pension), your Social Security benefit might be reduced.
Where is the cheapest warm place to live in USA? ›- Baton Rouge, Louisiana.
- Springfield, Missouri. ...
- Philadelphia, Pennsylvania. ...
- Greensboro, North Carolina. ...
- San Antonio, Texas. ...
- Tallahassee, Florida. Average weather summer: 73°F to 91°F. ...
- Huntsville, Alabama. Average weather summer: 70°F to 89°F. ...
- Norfolk, Virginia. Average weather summer: 73°F to 88°F. ...
- Mexico. Like any country, some parts of Mexico are nicer and safer than others. ...
- Panama. Just a bit further south is Panama. ...
- Ecuador. Situated on the equator, Ecuador is a top pick if you really desire warm weather. ...
- Colombia. ...
- Costa Rica. ...
- Malaysia. ...
- Spain. ...
- Nicaragua.
- New York.
- New Jersey.
- Vermont.
- Massachusetts.
- Maryland.
- Washington.
- Connecticut.
- Maine.
Is Florida or Georgia better for retirees? ›
Georgia topped Bankrate's list of the best state for retirees in 2021, thanks partly to economic factors like tax regulations. Some of its advantages: No tax on Social Security payments.
Is Georgia or South Carolina better for retirees? ›Taxes for Retirees
For those on a fixed income, every dollar in taxation matters. After years of working and paying taxes, many retirees look to relocate to a state with more favorable tax laws for seniors. Regarding retirement taxes, Georgia is generally more favorable than South Carolina.
Plan Stability
Pensions offer greater stability than 401(k) plans. With your pension, you are guaranteed a fixed monthly payment every month when you retire. Because it's a fixed amount, you'll be able to budget based on steady payments from your pension and Social Security benefits. A 401(k) is less stable.
A new ranking by banking and credit union library Bank Locations listed Texas as the best state for retirees in 2023. Michigan also beat out Florida as a more appealing locale for older Americans, based on factors like cost of living, quality of life and access to healthcare.
Why are retirees leaving Florida? ›“In addition to inflation, housing prices and increasing costs of living in Florida, retirees are also leaving for other reasons,” says Dutch Mendenhall, Founder of RAD Diversified REIT. “Higher auto and home insurance along with a 7% sales tax on already high-inflation goods can put a strain on retirement income.”
What is the hardest state to live in financially? ›According to Forbes Advisor's analysis, Hawaii has the highest cost of living among all 50 states and the District of Columbia, which is putting a strain on many residents' wallets. The Aloha State also had the highest debt-to-income ratio as of Q3 2022 at 2.25, meaning that many Hawaiians' debt exceeds their income.
Why are Floridians moving to Georgia? ›Benefits of Moving from Florida to Georgia
Access to new markets, a highly skilled workforce, and low cost of doing business are among the reasons why businesses are so successful in Georgia. In fact, 20 Fortune 500 companies are headquartered in Georgia including Coca-Cola, Delta, and Home Depot just to name a few.
Countries Natixis ranked as secure retirement locations are mostly concentrated in Europe but also include New Zealand and Australia. The top three countries in the rankings are Norway, Switzerland and Iceland, all of which have life expectancies of 83 years, compared to 77 in the U.S. and the world average of 72.
Is Tennessee or Georgia better for retirees? ›With a lower average property tax rate and a special "tax freeze" program for those 65 and older, retirees can financially benefit from living in Tennessee.
What is a good pension amount? ›The 50 – 70 rule is a quick estimate of how much you could spend during your retirement. It suggests that you should aim for an annual income that is between 50% and 70% of your working income.
Are pensions guaranteed for life? ›
Because pension plans are intended to provide periodic payments for life, certain forms of payment are required by law. For single employees, the required form of payment is a straight-life annuity, which typically provides a monthly payment based on the plan formula.
Why saving 10% won't get you through retirement? ›Mathematically, 10% Just Isn't Enough
Let's take a salary of around $48,000 and the rule of 20 retirement savings amount of roughly $960,000 and look at it in a different way. By saving 10%, your money would need to grow at a rate of 6.7% a year for you to retire 40 years from when you start.
(WZTV) — Tennessee is among the top places to retire in the United States. That's according to latest report from Bankrate. The company looked at affordability, wellness, culture, weather and crime. Neighboring state Georgia came in at the top spot, followed by Florida at number two and Tennessee at number three.
Is it better to retire in NC or FL? ›Our conclusion: North Carolina offers more diversity in terms of the available living environments and scenery but Florida has many more communities that are dominated by retirees. Both states have a wonderful collection of medical facilities and professionals, particularly in the larger cities.
Should I buy a house in Texas or Florida? ›Cost Of Living
If you are a home buyer, you will pay more to purchase a home in Florida than in Texas. The median sales price of a home in Florida in Q1 of 2021 was $317,500 versus Texas at $274,000 in the same time period. If you rent, this difference will trickle down to you as a renter.