Best and Worst States for Retirement in 2020

April 6, 2020

So many decisions factor into finding the best places to retire. Affordability, climate and quality of life are some considerations for choosing the best states for retirement. Gathering the most critical data from all states and then analyzing the numbers takes days to accomplish. So, we surveyed individuals across the U.S. and did the number crunching to find the best and worst states for retirement.

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Source: Retirement Living

Our analysis will help you decide where to retire. We found the most and least desirable states for retirees after collecting survey data for each state, including:

  • The percentage of the population over age 65
  • Livability ratings by taking median income and average home price into consideration
  • Assisted living costs
  • Retirement Living rating

After parsing this data, we then rounded up the top 10 retirement destinations and 10 states to avoid. You’ll find those states listed below, with the pros and cons of each state, gathered from survey results.

The Best States for Retirement

10 Best States for Retirement

  1. Arkansas
  2. Florida
  3. Alabama
  4. South Carolina
  5. West Virginia
  6. Ohio
  7. Delaware
  8. Idaho
  9. Kentucky
  10. Arizona

ARKANSAS

Arkansas

Arkansas is the best state to retire in because of the low cost of living, low crime rate and natural beauty. Our survey respondents say the state is perfect for seniors. Arkansas property taxes are minimal, and the state offers quite a few retirement communities surrounded by breathtaking mountains. Parks, festivals, community events, fishing, canoeing and swimming are among the many activities for retirees.

FLORIDA

Florida

It’s no secret many people retire to Florida for the year-round warm weather, which helps lessen arthritis pain. With 20.5% of residents in Florida retired, senior communities are abundant with comfortable homes and many activities. The sunshine state has no income tax, which drives down the cost of living, and many businesses offer senior discounts.

Florida’s climate creates increased tourism in the winter months. The addition of “snowbirds” can cause crowding in stores, restaurants and on the road. Another downside is that Florida temperatures soar well into the nineties with extreme humidity and storms in the summer.

ALABAMA

Alabama

Retire to Alabama when you’re 65 or older, and you pay no property taxes. The cost of living is relatively low in Alabama, and there are many choices for entertainment and medical care. Housing is affordable, and the economy is stable. If you score a retirement home in the south part of the state, you’ll have access to stunning beaches.

While Alabama living is economical, per capita income is low. There are problems with Medicaid and Medicare funding, but this issue is getting better. While some survey respondents said there was not much financial assistance for the elderly, Alabama has one of the lowest costs for assisted living facilities in the nation.

SOUTH CAROLINA

South Carolina

From the sunny beaches to the green mountains, South Carolina offers natural beauty and historical sites to retirement living. Survey respondents noted low taxes and affordable living for the golden years, but retirement income gets taxed. There are many activities available in South Carolina, and people from all over the world visit, adding diversity to the lifestyle. The climate is pleasant and warm.

On the flip side, the influx of visitors and a growing population can put a strain on the infrastructure. In some areas, roads need maintenance and the sewer, electric and medical systems can be inadequate. Some counties impose higher property tax rates to respond to these problems.

WEST VIRGINIA

West Virginia

West Virginia has the best livability score in our survey. Housing is affordable. Property taxes and overall cost of living are low and West Virginians are friendly. The West Virginia University Health System is the state’s largest provider of quality health care.

While the climate is usually mild in West Virginia, winter activities are not as abundant as in warmer locations. The state imposes taxes on retirement pensions and Social Security income.

OHIO

Survey participants confirmed our Livability Index score for Ohio by reporting economical home prices and low taxes. The housing market in the Columbus area is among the most affordable in the country. While the weather varies and snow and ice are problems in the winter, there are still plenty of activities all year-round. We received a report noting there’s no tax on military retirement pay.

DELAWARE

Those who prefer retiring near the East Coast can expect pleasant small towns in Delaware with the convenience of being near big cities. Delaware has no sales tax and reasonable property taxes. The way of life is relaxed, with easy access to beaches. The cost of living is low across most of the state, but the average assisted living cost is high.

  • Nearly 19% of residents are retired, so most choose not to leave the state
  • School taxes high, but seniors get property tax credits

IDAHO

Idaho offers quiet and friendly mountain living with abundant recreational opportunities for hobbyists, and club and community activities. Idaho’s Livability Index is excellent due to the low cost of housing, but the state’s population is growing. Idaho has outstanding medical facilities, but most are located in the major cities. Winters can get rough, but most roads are well maintained.

KENTUCKY

Kentucky does not tax any type of retirement or disability income for veterans or county, state or federal employees. This benefit also extends to those who worked in academics in any state. You’ll find the winter climate milder in Kentucky while summer days average 87 degrees. Low taxes, beautiful scenery and an exceptional parks system are all reasons to retire in Kentucky.

ARIZONA

With warm weather in the desert and snow in the mountains, Arizona offers much to see and do. Whether you like to sightsee, ski, golf, bike or hike, Arizona has the right environment. The state taxes personal property, but gas and housing are reasonably priced. Seniors can expect discounts from most businesses and plentiful retirement communities and assisted living facilities throughout the state.

  • The heat can keep you indoors during the summer and fall months
  • Cost for assisted living is average compared to other states


10 Worst States for Retirement

  1. California
  2. New York
  3. Alaska
  4. Rhode Island
  5. New Jersey
  6. Colorado
  7. Massachusetts
  8. Connecticut
  9. Oregon
  10. Washington

CALIFORNIA

California

Survey participants living in California said the state is full of natural beauty spread over mountains, cliffs, national parks and miles of beaches. Farmer’s markets sell tree-ripened produce picked the day before. The themes repeated from survey comments were few weather extremes and a broad range of available activities.

While the California lifestyle is active and comfortable, the cost of living is out of reach for many retirees. Prolific homeless and those living in the country illegally reveal social issues in the state. California crime rates vary a great deal from one area to another. Annual wildfires are an increasing threat, some coastal waters are polluted and taxes are high.

NEW YORK

New York

Retirees who enjoy the fast-paced city life can find just about any type of entertainment or activities in New York’s highly populated areas. Retirees looking for a peaceful country life find it in the northern part of the state, although amenities and services are not always conveniently located. New York does not tax Social Security or retirement income, and seniors get a break on property taxes.

Despite the tax breaks New York offers to retirees, the cost of living in the state is extreme. Assisted living expenses are among the top three highest across the U.S. Winters are typically harsh, and snow removal costs are high. However, New Yorkers have easier access to social services compared to southern states.

ALASKA

Alaska

If you can brave Alaska’s brutal winters, you will live among unbeatable natural scenery and native wildlife the other three seasons. The state is excellent for hunting and fishing, and those licenses are free. There’s no state income tax in Alaska, and car registration is free. The state pays permanent residents each year from the Alaska Permanent Fund.

The cost of living is high in Alaska, and assisted living facilities fees are the highest in the nation. Everyday expenses like groceries come with a healthy markup. While the harsh winters mean you don’t have to deal with spiders, snakes and other pests, getting around outdoors can be a struggle.

RHODE ISLAND

Rhode Island

Retire in Rhode Island for a breathtaking coastline and unbeatable seafood. Residents are known for being down-to-earth and friendly. Housing is affordable in many cozy and quaint small towns, but average assisted living costs are high. Rhode Island has a higher than average retired population, so it’s easy to find peers in most neighborhoods.

Rhode Island taxes can be painful for retirees. The sales tax is relatively high, with an additional tax on restaurant meals and beverages. Social Security benefits and out-of-state pensions get taxed, although Railroad Retirement benefits are exempt.

NEW JERSEY

New Jersey

New Jersey residents enjoy four seasons and many activities. The state’s world-class museums, concerts, professional sports, skiing and beaches are ideal for retirees who like variety and adventure. New Jersey also offers easy access to New York City and Philadelphia and is home to two highly regarded universities: Princeton and Rutgers, a public research university.

New Jersey’s cost of living expenses are only slightly less than New York’s. Average assisted living costs are over $6,000. Pensions, annuities and some IRAs are taxable. The high cost of taxes, auto insurance, housing and fees like tolls make living on a fixed income difficult in New Jersey.

COLORADO

Colorado is a popular destination with natural beauty and a bounty of activities like hiking, biking, skiing, rafting and more. The state population exploded in recent years, leading to a variety of shops and restaurants opening their doors. Diverse communities host engaging cultural events. However, housing and food prices are rising in response to higher demand in the state, and air quality suffers in some areas.

  • Friendly communities and low sales tax
  • High vehicle taxes and winters can be rough

MASSACHUSETTS

Massachusetts is a beautiful state with the ocean, lakes, mountains, forests and more. The state’s economy is healthy, and there are plenty of cultural events and recreation areas. Survey responses noted affordable, quality health care, although assisted living costs are high. You will find a slower way of life in Massachusetts, but this comes at a price with elevated real estate costs.

CONNECTICUT

Connecticut is one of the most expensive states to live in. However, there are pockets of affordable living for retirees. Greenwich Township is one location and is just one hour from Manhattan by train. Union offers a rural life and outdoor recreation, and Manchester has plenty of shopping and a historic district. Otherwise, living in Connecticut on a fixed income is next to impossible.

  • Retirement income taxed on adjusted gross income over $50,000
  • Cold winters, insufficient public transportation, high assisted living costs

OREGON

Oregon residents are known for being friendly, and the state has a diverse social flavor. Retire to Oregon to enjoy four seasons with temperatures above 20 degrees and below 90 degrees in most parts of the state. Oregon is a progressive state, and many of our survey respondents mentioned poor representation across all voters. Many complained of high taxes for retirees, but the state offers many tax credits, including the Property Tax Deferral for Disabled and Senior Citizens Program.

  • Comfortable climate all year-round
  • Extreme business regulations drive up costs of goods and services

WASHINGTON

The quality of life in Washington is exceptional, but the state ranked low because affordable retirement conditions are uneven across the state. The state is one of the best for gardening and exploring the outdoors with the mountains, ocean, rainforest and desert. There’s no state income tax in Washington. The Seattle area has higher than average property crime rates among major U.S. cities.

  • Politically divided causing highly populated areas to rule the vote
  • Foggy climate with limited sunshine in lower elevations

Conclusion

Deciding where to retire is a very personal decision. Our worst 10 states for retirement can help you avoid living in a location that’s not optimal for the activities you want to pursue or your budget. The best 10 states for retirement give you some great options to start your research. You need to weigh the attributes of each state according to your priorities to find the best area to retire.


Methodology

In our search to identify the best and worst states for retirement, we evaluated the cost of living, cost of care, percentage of the population over 65, as well as first-hand data from Retirement Living readers.

To evaluate the cost of living, we compared the median income and the average home price for the state. To normalize the data, we divided the median income by the average home price, giving us our livability score. The higher the score the better, indicating a lower cost of living.

Considering the percentage of the population over the age of 65 is an important statistic when evaluating the best places for retirement. Residents over 65 often make up the most powerful voting block, with turnout percentages nearly double that of voters aged 18-29, according to U.S. Census Bureau data. Because of this correlation, communities with higher percentages of seniors tend to have policies that are more beneficial for seniors.

It is important to know the average cost of assisted living in your state. Knowing the average cost will help you plan for future senior housing expenses.

Finally, we surveyed our readers and received more than 1,500 responses. We simply asked our readers what rating they would give their state for retirement and why. The scores and responses from our readers were in line with our statistical analysis, but gave us an anecdotal view into what it is like to actually retire in a particular state.

To create our final ranking, we normalized each data point and weighed each data point based on its level of importance. We gave each data point a weight from 1-4 with 4 having the most weight:

  • Retirement Score (RL Survey Data): 4
  • Livability Score (Median Income/Average Home Price): 3
  • Percentage of Population over 65: 2
  • Cost of Assisted Living: 1


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