When you’re planning where to retire, there are several factors to weigh.
How does Florida stack up to Maine? West Virginia is an inexpensive place to live, but what about other factors that may be important to you in retirement?
Some are personal or focused on lifestyle, such as where your family is or where you have friends and connections. You might just feel like you belong in a particular location or have business contacts that will help you earn some money. Your individual preferences, such as climate, activities and even politics, may weigh heavily in your decision-making.
Measurable factors, such as taxes on seniors, the quality of healthcare and cost of living, however, are equally important because they are typically related to financial health. And regardless of where you live, your financial health influences your quality of life.
In 2017, Kiplinger ranked all 50 U.S. states according to their advantages for retirees, based primarily on financial considerations.
Based on data from the U.S. Census Bureau and organizations that publish statistics on health care and economics, Kiplinger’s top ten best states to retire for 2019 were:
- South Dakota
- North Dakota
- New Hampshire
The idea of moving to South Dakota or Florida might horrify you, but if your financial well-being is high on your list of priorities in retirement, you may want to reassess the pros and cons of spending your retirement years in one of these states.
Where Do Seniors Live?
One indicator of good places for retirees is how many seniors live there already. There could be a reason or two for the attraction to those places.
According to the most recent data from the Federal Interagency Forum on Aging-Related Statistics, 14.6 percent of the national population was aged 65 and older in 2014.
According to that data, the states with the highest percentage of people aged 65 and older are:
- Florida: 19.1 percent
- Maine: 18.3 percent
- West Virginia: 17.8 percent
- Vermont: 16.9 percent
- Montana tied with Pennsylvania: 16.7 percent
Sumter County in Florida had the highest concentration of seniors, with 53 percent of the county’s population aged 65 and older. At the other end, Chattahoochee County, Georgia, had the lowest proportion of seniors at just 4.1 percent.
Overall, Alaska was the state with the lowest percentage of seniors at 9.4 percent. The bottom five states for residents aged 65 and older are:
- Colorado: 12.7 percent
- Georgia: 12.4 percent
- Texas: 11.5 percent
- Utah: 10 percent
- Alaska: 9.4 percent
Tax-Friendly States for Retirees
With limits on your income, your tax burden in retirement can be a high priority. The amount you pay in taxes can vary quite a bit in the United States, depending on where you live.
It also depends on what kind of taxes hit you hardest. Some states have no income taxes. Some have very low property taxes or no sales tax.
AARP says Alaska and New Hampshire impose no tax on sales, income or Social Security. Alaska also gives residents an annual royalty payment from the state’s oil deposits.
Delaware, Montana and Oregon don’t have sales taxes.
No state income taxes are levied in the following states:
- South Dakota
Coincidentally, these states also don’t tax military retirement pay, according to MilitaryBenefits.info.
In addition, New Hampshire imposes income taxes only on dividends and interest, which can be important to people living off their investments. Tennessee’s dividends and interest taxes will be gone in 2020.
Overall State Taxes
The Tax Foundation ranks states according to their per capita state and local tax burdens overall.
According to 2012 data, the states with the highest overall tax burdens are New York, Connecticut, New Jersey, Wisconsin and Illinois. The states with the lowest tax burdens per capita include Texas, Tennessee, Wyoming, South Dakota and Alaska.
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States with the Highest and Lowest Cost of Living
Another factor important to seniors is the cost of living. If you live in California, for instance, your money won’t go as far as it would if you lived in West Virginia.
Using a cost-of-living index that compares each state with a national average score of 100, Sperling’s Best Places ranks each state by how much it costs to live there. A ranking of less than 100 means the state has a lower cost of living than the national average, and value higher than 100 means the state’s cost of living is higher than the national average.
For example, the state with the lowest cost of living, West Virginia, has a score of 84.
Hawaii is ranked as the most expensive state, with a score of 187.
Best States for Senior Health
To measure the health of each state’s senior population, United Health Foundation ranks states according to the World Health Organization’s definition of health: “Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.”
The foundation’s America’s Health Rankings Senior Report analyzes the nation’s senior population on a state level using 35 measures of senior health across six categories.
- Behaviors, such as smoking and drinking
- Macro-level community and environment, such as the quality of nursing homes
- Micro-level community and environment, such as poverty-related threat of hunger
- Policy, such as prescription drug coverage
- Clinical care, such as health screenings and vaccines
- Outcomes, such as hip fractures and premature death
In the 2016 Senior Report, Massachusetts came out on top, followed by Vermont, New Hampshire, Minnesota and Hawaii.
Louisiana was at the bottom of the list, hindered by “a high prevalence of smoking, obesity, and physical inactivity.”
State Health Systems
The Commonwealth Fund ranks the performance of state health systems. Rankings consider the quality of care, health outcomes and disparities across the United States.
According to the nonprofit health research organization’s 2019 Scorecard on State Health System Performance, the highest-ranking states for health care systems are Hawaii, Massachusetts, Minnesota, Washington, Connecticut and Vermont.
The states that ranked at the bottom, Arkansas, Nevada, Texas, Oklahoma and Mississippi, suffer from federal and state policy decisions regarding Medicaid access, increasing health care costs and a high percentage of uninsured adults.
States with the Best and Worst Climate
Your overall comfort and quality of life in retirement are heavily influenced by the activities you undertake. States with mild weather afford more opportunity for outdoor activities. If you like being outdoors, the climate of the state in which you live is important to your physical and mental well-being.
The average number of sunny days in the United States is 205 a year, according to Sperling.
The top five states for the annual number of sunny days are:
- Arizona: 286
- New Mexico: 278
- California: 258
- Colorado: 253
- Nevada: 252
The states with the least number of sunny days are:
- Vermont: 167
- New York: 165
- Washington: 165
- West Virginia: 164
- Alaska: 121
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The Best States to Live: The Bottom Line
All of these rankings are based on averages and selected data. With any average, there will be experiences that are better, as well as worse.
You may live in a state that the list-makers say has a poor system of health care. And yet, you have a wonderful doctor and have received the best medical treatment you could want.
The lists don’t consider other things like the types of communities. For example, college towns are worth considering because they may have interesting activities like art exhibits, lecture series and classes to audit. Or maybe you want to live by the water or in the mountains.
This is all to say that the rankings are useful for painting a big picture. But your results may vary.