Retirement might be the end of the line, but it doesn’t have to be the end of financial security or life satisfaction. Timing is often a primary concern with retirement, as it generally coincides with the age at which we become eligible to draw Social Security or pension benefits. Hopefully the choice will be ours and not dictated by our circumstances — the unfortunate case for nearly a third of nonretirees who haven’t put away a single penny for retirement, though not necessarily through any fault of their own.

But in addition to when you want to retire, a good question to ask is where, which can be difficult to answer if you haven’t adequately planned for your golden years. Even in the most affordable areas of the U.S., most retirees cannot rely on Social Security or pension checks alone to cover all of their living expenses. Social Security benefits increase progressively with local inflation, but they replace only about 40 percent of the amount you earned if you were an average worker, according to the Center on Budget and Policy Priorities.

If retirement is still a big question mark for you because of finances, consider relocating to a state that lets you keep more money in your pocket without requiring a drastic lifestyle change. To help you find that permanent, affordable place to call home, WalletHub’s analysts compared the 50 states and the District of Columbia across 31 key indicators of retirement-friendliness. Our analysis examines affordability, health-related factors and overall quality of life. Read on for our findings, expert commentary and a full description of our methodology.

1 Main Findings 2 Ask the Experts

Source: WalletHub




Main Findings

Overall Rank State Total Score ‘Affordability’ Rank ‘Quality of Life’ Rank ‘Health Care’ Rank
1 Florida 69.22 1 11 24
2 Wyoming 67.81 4 25 19
3 South Dakota 67.06 15 33 2
4 Iowa 66.26 26 6 5
5 Colorado 64.85 27 17 7
6 Idaho 64.12 14 31 16
7 South Carolina 64.00 7 37 33
8 Nevada 63.64 6 9 42
9 Delaware 63.59 10 40 25
10 Wisconsin 63.34 33 5 4
11 Pennsylvania 63.23 20 4 32
12 Montana 63.08 23 24 13
13 Arizona 63.04 21 16 21
14 Missouri 61.73 22 18 28
15 Michigan 61.69 28 12 26
16 Washington 61.31 31 20 17
17 Utah 61.25 25 35 18
18 Texas 61.11 3 36 44
19 Virginia 61.08 19 23 31
20 Georgia 60.55 11 32 41
21 Minnesota 60.49 45 2 1
22 Maine 60.41 37 7 14
23 North Carolina 60.27 18 26 37
24 New Hampshire 60.24 35 19 11
25 Ohio 59.59 24 22 36
26 Oregon 59.47 30 30 22
27 Kansas 58.83 34 14 23
28 Oklahoma 58.47 12 39 43
29 Tennessee 58.26 5 38 47
30 Nebraska 57.78 40 28 8
31 Illinois 57.15 32 15 38
32 California 56.90 42 8 20
33 Louisiana 56.74 9 43 46
34 Indiana 56.67 29 29 40
35 Massachusetts 56.58 47 3 10
36 Alabama 56.46 2 47 50
37 Maryland 55.73 39 21 27
38 North Dakota 55.09 43 42 6
39 West Virginia 54.48 13 44 48
40 Mississippi 54.48 8 49 51
41 New York 53.54 46 1 30
42 Arkansas 53.45 17 48 45
43 Kentucky 53.27 16 45 49
44 Vermont 52.79 48 10 12
45 New Mexico 52.61 36 41 39
46 New Jersey 52.55 41 27 35
47 Hawaii 51.85 50 34 3
48 Connecticut 51.34 49 13 15
49 District of Columbia 50.96 44 51 9
50 Alaska 50.82 38 50 34
51 Rhode Island 43.84 51 46 29

artwork-best-states-to-retire-report-2017-v2




Ask the Experts

Choosing a place to settle for retirement requires careful consideration of various factors such as your finances, health and how you plan to spend your time. For advice on such matters, we turned to a panel of experts in fields such as aging and taxes. Click on the experts’ profiles to read their bios and responses to the following key questions:

  1. What is the most common mistake that retirees make when choosing where to settle?
  2. What are some tips for living on a fixed income in retirement?
  3. What are the top factors retirees should consider in choosing which state to retire in?
  4. Should states work to attract retirees? What are the pros and cons to having a large retiree population?
  5. Should retirees be exempt from certain state and local taxes?

Back to All Experts

Emily A. S. Fenster

Assistant Professor of Sociology in the Department of Social Science at Valley City State University

What is the most common mistake that retirees make when choosing where to settle? 

First, many plan with their “current selves” in mind. Consider whether the location will work with both your current and future needs. Your current lifestyle and social, health, and economic demands are a good starting point, but seriously consider whether the location will meet your needs if something changes. Even if you don’t need certain resources at the moment, you may feel reassured in knowing that you’ve researched them anyways and have factored them into your decision.

In addition, many people avoid reevaluating their personal interests and goals. In one study, I interviewed adults in their 40s-60s about their thoughts on retirement, and some participants noted that they hadn’t even started considering what they would want to focus on in the future. You could possibly be spending decades in retirement, so don’t overlook this topic. What do you want to dedicate your time and energy to in retirement? What do you want to prioritize at this point in your life? If you’ve spent time thinking seriously about this, you can make sure the locale has opportunities that work for you.

What are some tips for living on a fixed income in retirement? 

If possible, well before you retire, work on creating a budget based on your expected income. Compare it to your current lifestyle and spending habits. If you adjust your habits, and give yourself enough time to do so realistically, you may be setting yourself up for a less chaotic transition into retirement. This could also give you a chance to save more money.

As always, prepare as much as you can for unexpected costs. Seek out low-cost activities and opportunities when possible, which can help you allocate funds to things you want to prioritize.

What are the top factors retirees should consider in choosing which state to retire in? 

Explore how your options may impact yourself and others to whom you have a direct connection. If you have a partner or spouse, discuss whether a particular location will fit both of your needs and goals. Think about the proximity to family members and other social supports. If you travel to see them, or vice versa, determine the ongoing costs connected to the different locations you’re considering (both time and money).

Evaluate the particular benefits of living in the states you are considering, and what opportunities those rewards can provide. If one location has a low cost of living or tax benefits, that may allow for more flexibility in your budget. If another has a good long-term care and health care network, that could provide greater security if a health crisis occurs. One location may be better for physical and outdoor activity, so it could provide benefits for your overall wellness. It is important to consider all facets of your life in this kind of decision.

Back to All Experts

Eva Kahana

Distinguished University Professor and Robson Professor of Sociology, Humanities, Applied Social Science, Nursing & Medicine, and Director of the Elderly Care Research Center at Case Western Reserve University

What is the most common mistake that retirees make when choosing where to settle? 

  1. Not considering distance and ease of travel for family members. This becomes important when retirees get older and health problems arise resulting in needs for caregivers.
  1. Not choosing a community where like-minded older adults reside (e.g., a lover of classical music will do better in Sarasota than in Clearwater, Florida).

What are some tips for living on a fixed income in retirement? 

Consider planning your budget carefully and not make impulsive purchases, such as a boat or cruise that you cannot afford. Consider long term care insurance. We found that retirees moving from a “no services” active retirement community to a reputable continuing care retirement community were more satisfied than those moving back to be close to children, e.g., in an assisted living facility. We think that the latter group may have waited too long to move to the “right place.”

What are the top factors retirees should consider in choosing which state to retire in?

They should consider the differences and similarities to the locale of their current residence and strive for good “person environment fit.” We actually studied a group who moved from New York City to the East Coast of Florida and they reported satisfaction and improved health one year after the move. Those who had a reluctant spouse undertaking the move reported the most problems.

Methodology

In order to identify the most retirement-friendly states, WalletHub’s analysts compared the 50 states and the District of Columbia across three key dimensions: 1) Affordability, 2) Quality of Life and 3) Health Care.

We evaluated those dimensions using 31 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for retirement.

We then calculated the overall score for each state and the District using its weighted average across all metrics and constructed our final ranking based on the resulting scores.

Affordability – Total Points: 40

  • Adjusted Cost of Living: Double Weight (~16.00 Points)
  • General Tax-Friendliness: Full Weight (~8.00 Points)
    Note: This metric is based on WalletHub’s States with the Highest & Lowest Tax Rates ranking.
  • Tax-Friendliness on Pensions & Social Security Income: Full Weight (~8.00 Points)
  • Annual Cost of In-Home Services: Half Weight (~4.00 Points)
  • Annual Cost of Adult Day Health Care: Half Weight (~4.00 Points)

Quality of Life – Total Points: 30

  • Share of Population Aged 65 & Older: Full Weight (~2.14 Points)
  • Elderly-Friendly Labor Market: Full Weight (~2.14 Points)
    Note: This metric takes into account both the percentage of people aged 65 and older working and the number of part time employees for every full time employee for people aged 65 and older.
  • Share of Population Aged 65 & Older Below Poverty Level: Full Weight (~2.14 Points)
  • Access to Public Transportation: Full Weight (~2.14 Points)
    Note: This metric measures the percentage of commuters who use public transit as a proxy for the availability of public transportation.
  • Mildness of Weather: Double Weight (~4.29 Points)
    Note: This metric is based on WalletHub’s Cities with the Best & Worst Weatherranking.
  • Museums per Capita: Full Weight (~2.14 Points)
    Note: This metric was measured by the square root of the population.
  • Theaters per Capita: Full Weight (~2.14 Points)
    Note: This metric was measured by the square root of the population.
  • Golf Courses Capita: Full Weight (~2.14 Points)
    Note: This metric was measured by the square root of the population.
  • Access to Adult Volunteer Activities: Full Weight (~2.14 Points)
  • Violent-Crime Rate: Full Weight (~2.14 Points)
  • Property-Crime Rate: Full Weight (~2.14 Points)
  • Quality of Elder-Abuse Protections: Full Weight: Full Weight
    Note: This metric is based on WalletHub’s States with the Best Elder-Abuse Protections ranking.
  • Air Quality: Half Weight (~1.07 Points)
  • Drinking-Water Quality: Half Weight (~1.07 Points)
    Note: This metric measures the percentage of the population potentially exposed to water exceeding a violation limit.

Health Care – Total Points: 30

  • Family & General Physicians per Capita: Full Weight (~2.61 Points)
  • Dentists per Capita: Full Weight (~2.61 Points)
  • Nurses per Capita: Full Weight (~2.61 Points)
  • Health-Care Facilities per Capita: Full Weight (~2.61 Points)
  • Quality of Public Hospitals: Full Weight (~2.61 Points)
    Note: This metric is based on Centers for Medicare & Medicaid Services’ ranking of public hospitals.
  • Emotional Health: Half Weight (~1.30 Points)
  • Share of Population Aged 65 & Older with Health Insurance: Full Weight (~2.61 Points)
  • Share of Population Aged 65 & Older with Good or Better Health: Full Weight( ~2.61 Points)
  • Share of Population Aged 65 & Older with a Disability: Full Weight (~2.61 Points)
  • Share of Population Aged 65 & Older Who Are Physically Active: Full Weight (~2.61 Points)
  • Life Expectancy: Full Weight (~2.61 Points)
  • Death Rate for Population Aged 65 & Older: Full Weight (~2.61 Points)

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Federal Bureau of Investigation, Council for Community and Economic Research, U.S. Bureau of Labor Statistics, Retirement Living Information Center, Genworth Financial, United Health Foundation, County Health Rankings, Measure of America, Centers for Disease Control and Prevention, Centers for Medicare & Medicaid Services, Charity Navigator, Gallup Healthways, GolfLink and WalletHub research.

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