The very best place to retire for you might be on a
beach...or in the mountains...or near family...or in the same house
you've lived in for years. It's a personal decision that no one else can
make for you. However, if you haven't already settled on a retirement
destination, an objective analysis of your options can help narrow your
search.
We rated all 50 states and the District of Columbia based on
quantifiable factors that are important to many retirees. Our rankings
favored states that are affordable and economically healthy, as well as
those with low crime rates. We also rewarded states with large but
relatively prosperous populations of residents age 65 and up (though if
you prefer a younger crowd, consider a
college town for retirement). Finally, we weighed the tax situation for retirees in each state.
The following 10 states topped our rankings of retirement
destinations. No state is perfect, but within each we identified a city
or two that should hold particular appeal to retirees. Take a look. Our
picks span the country from east to (far) west and offer a wide
diversity of climates and lifestyles. There's a place for just about
everyone.
10. Wyoming
Total population: 570,134
Share of population 65+: 12.7% (U.S.: 13.4%)
Cost of living: 6.4% above the U.S. average
Average income for 65+ households: $40,197 (U.S.: $48,665)
Retiree tax picture:
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The Cowboy State is a particularly good destination for retirees
looking to connect with nature. Wyoming's unique landscape includes
Yellowstone National Park, the Grand Teton mountain range and Snake
River. Plus, you can keep a nice slice of earth all to yourself: Wyoming
has the smallest population of any state in the country, with just six
residents per square mile.
If you'd prefer some company, Cheyenne is Wyoming's most populous
city and home to the state's largest hospital. It ranks ninth for
successful aging among 252 small metro areas, according to the Milken
Institute, an economic think tank that credits the capital city's high
ranking to its economic strength. In fact, the entire state has the
third-lowest poverty rate in the U.S. among people age 65 and older
(behind Alaska and New Hampshire). Wyoming is also
one of Kiplinger's 10 Most Tax-Friendly States for Retirees.
SEE ALSO: 10 Most Tax-Friendly States for Retirees
9. Kansas
Total population: 2.9 million
Share of population 65+: 13.5%
Cost of living: 1.8% above the U.S. average
Average income for 65+ households: $44,165
Retiree tax picture:
Friendly
For some retirees, there's no place like Kansas. The Sunflower State
offers affordable housing and health care for the 65-and-older
population. The median home value for this age group is $110,900 in
Kansas, compared with the U.S. median of $164,400. And lifetime health
care costs for a healthy 65-year-old couple retiring this year (and
covered by Medicare parts B and D and a supplemental insurance policy)
are expected to run about 5% less in Kansas than the U.S. average,
according to research firm HealthView Services.
Topeka is particularly affordable, with overall costs for retirees
coming in 6.4% below the national average. No wonder the capital city is
popular with people age 65 and older, who account for 14.8% of its
population. Plus, Lawrence, home to the University of Kansas's main
campus, is less than 30 miles away, close enough to take advantage of
the amenities of college life. The university's Osher Lifelong Learning
Institute offers low-cost classes and special events designed for
students age 50 and older. Also, KU's Landon Center on Aging houses
clinical and research facilities focused on the treatment of older
adults.
SEE ALSO: 10 Least Tax-Friendly States for Retirees
8. Iowa
Total population: 3.1 million
Share of population 65+: 15.1%
Cost of living: 0.2% above the U.S. average
Average income for 65+ households: $37,468
Retiree tax picture:
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There are retirement destinations of all sizes to choose from in
Iowa. For those looking to live in a big city on a small budget, Des
Moines is a good choice thanks to living costs for retirees that fall
9.6% below average. Affordability is just one reason the Milken
Institute ranked the state capital seventh out of 100 large U.S. metro
areas for successful aging. Des Moines also boasts a strong economy,
numerous museums and arts venues, and plenty of health care facilities
specializing in aging-related services. For similar reasons, the Milken
Institute ranks Iowa City first among small metro areas for successful
aging. In addition, AARP named Cedar Rapids one of the 10 most livable
midsize cities in the U.S. for people age 50+; nearby Marion made AARP's
top 10 for livability among small cities.
As such, it should come as no surprise that older residents account
for an above-average portion of Iowa's population, and an overwhelming
majority of them are economically secure. The state's poverty rate for
people 65 and older is 7.4%, compared with 9.4% for the U.S. Iowa's
affordability surely helps. The state's overall cost of living is on par
with the nation's, and housing and health care costs are well below
average. Although the state is the least tax-friendly toward retirees
among our top 10, Iowa did recently phase out state income tax on Social
Security benefits.
SEE ALSO: 9 Worst Social Security Mistakes
7. Hawaii
Total population: 1.4 million
Share of population 65+: 14.8%
Cost of living: 33.4% above the U.S. average
Average income for 65+ households: $66,288
Retiree tax picture:
Mixed
Let's get this out of the way: Hawaii is expensive. But for retirees
who can afford it, it's a paradise that can be worth every penny--and
it's not necessarily out of reach. As a whole, retirement-age residents
of the Aloha State aren't financially strapped. The average household
income for Hawaii's 65+ population is the highest of any of the 50
states. And the poverty rate for the same age group is 7.4%, well below
the national 9.4% rate.
Housing can eat up a big chunk of a nest egg. Hawaii's median home
price for residents 65 and up is the highest in the country at $541,600,
more than three times the national median. And state capital and
tourist hub Honolulu, on the island of Oahu, is
one of the most expensive U.S. cities to live in.
Retirees will get more bang for the buck on the island of Hawaii, also
known as the Big Island, where the median home value for 65+ residents
is a more reasonable $304,500 and rental costs are about on par with the
rest of the nation. Areas to consider on the Big Island include Kona,
Waimea and Hilo. And no matter where they live in Hawaii, retirees can
at least save on some taxes: Social Security benefits and most other
pension payouts are exempt from state income taxes.
SEE ALSO: 11 Common Medicare Mistakes
6. Arizona
Total population: 6.5 million
Share of population 65+: 14.4%
Cost of living: 6.2% above the U.S. average
Average income for 65+ households: $43,628
Retiree tax picture:
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The Grand Canyon State, with its ample sunshine and beautiful desert
landscape, is a popular retirement destination. Prescott, located 100
miles north of Phoenix, has a particularly abundant population of
65-and-older residents, who make up a whopping 24.3% of the metro area's
total. And while the state has slightly above-average living costs,
Prescott is one of our
Cheapest Places Where You'll Want to Retire.
Its retirees tend to spend 2.1% less than average on living expenses.
Younger retirees might consider Peoria, a suburb of Phoenix that rates
as one of our
Best Cities for Early Retirement.
Retired residents throughout the state can also save on taxes. Arizona is
one of Kiplinger's 10 Most Tax-Friendly States for Retirees.
The state exempts Social Security benefits from taxes, as well as a
portion of some other types of retirement income. Plus, you won't face
an inheritance or estate tax.
SEE ALSO: 9 Reasons Women Will Never Retire
5. South Dakota
Total population: 825,198
Share of population 65+: 14.5%
Cost of living: 0.1% above the U.S. average
Average income for 65+ households: $37,102
Retiree tax picture:
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Safety and affordability are two good reasons to retire to South
Dakota. Crimes occur at much lower rates in the state than they do
across the country. The median home value for residents age 65 and older
is just $111,300, about one-third less than the U.S. median. And
lifetime health care costs for an average, healthy 65-year-old couple in
South Dakota are expected to total nearly $25,000 less than the
national average. A favorable tax environment with no state income tax
adds to the attractiveness.
Both Sioux Falls and Rapid City rank among the five best small metro
areas for successful aging, according to the Milken Institute, coming in
second and fifth, respectively. The cost of living for retired people
in the former is a bit better, at 1.9% below average, while it's just
below average in the latter.
Young retirees may be particularly happy in Sioux Falls
with its large population of 45- to 64-year-olds. AARP named Sioux
Falls one of the 10 most livable midsize cities in the U.S. for people
age 50+, citing the 25-mile walking and biking trail that loops the
city. And you'll be sure to lure the grandkids for a visit with the
promise of a day trip to the Mount Rushmore State's famous memorial.
SEE ALSO: Cheapest Places You Will Want to Retire
4. Pennsylvania
Total population: 12.7 million
Share of population 65+: 15.8%
Cost of living: 14.8% above the U.S. average
Average income for 65+ households: $43,356
Retiree tax picture:
Friendly
Economic stability holds the poverty rate of older residents of the
Keystone State down to 8.3%, compared with 9.4% for the U.S. And crime
rates are safely below average. Though the overall cost of living is
above average, housing for people 65+ is reasonably priced. The median
home value is $149,300 for this age group, or $15,100 below average.
Plus, Pennsylvania's tax laws help offset some costs for retirees:
Social Security benefits and payouts from 401(k)s, IRAs,
deferred-compensation plans and other retirement accounts are all
tax-exempt.
Retirees on a budget will like Pittsburgh. Rated as one of our
Cheapest Places Where You'll Want to Retire,
the metro area's cost of living for retired people falls 3.7% below the
U.S. average. And don't let the city's Rust Belt reputation fool you.
Enjoy cultural attractions such as the Andy Warhol Museum and the
Pittsburgh Ballet Theatre, a vibrant jazz scene, as well as all the
offerings of local universities including Duquesne, Carnegie Mellon and
Pitt. State College, home to Penn State, is another
great university town in Pennsylvania to consider for retirement.
But if your heart is set on a major East Coast city, opt for
Philadelphia. AARP named it one of the 10 most livable big cities in the
U.S. for people age 50+, highlighting the free (or reduced) transit
fares for residents 65 and over.
SEE ALSO: Great College Towns to Retire To
3. West Virgina
Total population: 1.9 million
Share of population 65+: 16.5%
Cost of living: 2.0% below the U.S. average
Average income for 65+ households: $37,788
Retiree tax picture:
Friendly
Why retire to the Mountain State? John Denver said it best. For
retirees hoping to explore the outdoors, West Virginia is almost heaven
with its Blue Ridge Mountains and Shenandoah River. If that's not enough
to get you singing "take me home," perhaps the low cost of living can
entice you. For homeowners age 65 and older, the median home value is
just $91,400, tied with Mississippi for the lowest in the nation. Rental
costs are also rock-bottom for retirees.
Morgantown offers a downtown Main Street to take you off the country
roads and give you a small taste of city living. You can enjoy an array
of restaurants and pubs, art galleries, and boutique shops. Home to West
Virginia University, Morgantown offers residents the opportunity to
take in all the concerts, theater performances and sporting events
hosted by the school. Plus, the college town provides an excellent
health care system and low hospital costs, according to the Milken
Institute.
SEE ALSO: Great Places to Retire Overseas
2. Florida
Total population: 19.1 million
Share of population 65+: 17.8%
Cost of living: 4.6% above the U.S. average
Average income for 65+ households: $45,144
Retiree tax picture:
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Nearly 3.4 million older residents can't be wrong. Florida is famous
for its retiree-haven status and boasts a population with the greatest
abundance of people age 65 and up in the country. The warm weather and
beautiful beaches may not hurt the state's appeal to people of a certain
age, but the tax picture is surely the main attraction. Florida has no
state income tax, estate tax or inheritance tax, and it doesn't tax
Social Security or other retirement income.
The Sunshine State may be an obvious retirement destination, but
picking where to retire within Florida will prove more difficult. The
state is packed with good, affordable options, including Fort Myers,
Sarasota and Tampa along the Gulf and Vero Beach on the Atlantic side.
And Gainesville is a
great college town for retirement. But Punta Gorda tops our rankings for
Cheapest Places Where You'll Want to Retire.
The share of Punta Gorda's population age 65+ is a robust 34.5%, and
the cost of living is 3.8% below average for retired people.
TOOL: Retirement Savings Calculator
1. Delaware
Total population: 908,446
Share of population 65+: 14.9%
Cost of living: 6.4% above the U.S. average
Average income for 65+ households: $47,860
Retiree tax picture:
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The First State is tops for retirees. Delaware's population includes a
great number of residents who are 65+, and the retired set can enjoy a
life unburdened by heavy taxes.
One of Kiplinger's 10 Most Tax-Friendly States for Retirees,
Delaware levies no sales tax and modest income taxes, from which Social
Security benefits are exempt. Plus, it's relatively affordable compared
with nearby New Jersey (with living costs 21.4% above the national
average), Connecticut (33.4% above average) and New York (52.7% above
average),
one of our worst states for retirement.
Oceanside cities such as Bethany, Dewey and Rehoboth may be
attractive, but they come with living costs between 49.4% and 81.9%
above the national average. A more affordable choice: Milford. The small
inland city is less than an hour north of the popular beach towns and
has living costs just 5.2% above average, according to Sperling's Best
Places. With a population of about 10,000 people, Milford straddles the
Mispillion River. Along with the river walk and park, you can find
numerous restaurants, boutiques and festivals in the downtown area. It's
also just about an hour south of Wilmington, the state's largest city,
and all its amenities, ranging from museums and galleries to gambling
and wineries. Regular Amtrak service via Wilmington can get you to New
York or Washington in less than two hours and to Philadelphia in less
than half an hour.
But you can stay in town for quality health care. Bayhealth Milford
Memorial offers an array of inpatient and outpatient services, ranging
from a cancer center to a joint-replacement facility.
Culled from Kiplinger:
