The Very Best States for Retirement in the USA
By John P.
When it’s time for retirement, there are some basic questions everyone needs to answer. When to retire, and how much to save are pretty basic ones to start. But where to retire is equally important stuff!
The Best and the Rest, Ranked
Entering the relaxing stage of life totally changes priorities. As it should! And the fact is, not every American state has the friendliest policies towards deserving former workers. Property taxes, healthcare, and community are major ways to distinguish between the options. Basic daily costs are key, too!
It’s time to take a look at every state in the union, ranked by cost of living — from the worst to the first! Adjusting a budget should be done with maximum information. Sadly, some perks are not well-publicized! How do different places treat their retired residents, really?
Countdown to #1: See the best places to unwind and reset after retirement — and where to avoid!
Hawaii
Cost of living: 87% above the U.S. average
Population: 1.4 million
Share of population 65+: 16.1%
Retiring on one of the Hawaiian islands is a secret dream of many Americans. Paradise doesn’t sound half bad, by any means! But when they hear about the cost of living, most reconsider. It’s not cheap, to say the least: With the most expensive cost of living on the list, it isn’t a prime destination right now beyond vacation. The one redeeming quality is healthcare costs, from a financial standpoint. At 11.4% below average, it might make up for a few other bills. But for most, the decision will be Aloha, Hawaii!
California
Cost of living: 52% above the U.S. average
Population: 38.7 million
Share of population 65+: 12.9%
Ah, the Golden State. With beaches galore and top cultural attractions, California has long been a choice for relocators looking for fun in the sun. But the reality is, the cost of living has been rising for everyone in the state for decades. That includes prospective retirees! Currently, stats indicate that 1 in 10 retired residents are living in poverty. Beyond social security checks, retirement income here is taxed. Is it worth the move? Maybe not, for now!
Massachusetts
Cost of living: 38% above the U.S. average
Population: 6.7 million
Share of population 65+: 15.1%
Time for an inventory on Massachusetts. East coasters know that Boston has a lot to offer culturally and intellectually. The home of Harvard, MIT, and the Red Sox, residents have a lot to brag about. And outside of the metro area, there’s a lot of natural beauty in the state! But the cold, hard facts don’t lie: MA has the second-highest healthcare costs in the nation, and it taxes retirement income. Social security checks are safe, but this state may not be the safest bet for savings!
Alaska
Cost of living: 32% above average
Population: 736,855
Share of population 65+: 9.4%
It’s far away, sure. But the state known as the Last Frontier is a gorgeous place to spend the golden years. Not many people choose it, as of now. Under 70,000 people are actually age 65 and older! But those who do know they are exempt from state income taxes. Plus, they get an extra exciting check: Alaskans receive dividends from the oil business in the state, around a thousand bucks a year. Maybe that helps with the high cost of living, more than 9% above the national average!
New Jersey
Cost of living: 27% above the U.S. average
Population: 8.9 million
Share of population 65+: 14.7%
The Garden State is known as a bit of a suburb of NYC, truthfully. During the working years, many commute each and every day to the big city nearby, and relax back in the suburbs at night. But is it a good place to retire, permanently? With the third-highest healthcare costs in the nation and the number one ranking for property taxes, maybe not. The cost of living for everyday items is already above average!
Connecticut
Cost of living: 24% above the U.S. average
Population: 3.6 million
Share of population 65+: 15.5%
While it has lovely ports, classic new England town, and autumn leaves galore, the nuts and bolts of Connecticut are not idyllic, finally. Real estate taxes are some of the very highest in the country, retirement income is taxed. That sometimes includes social security, incredibly! While most residents have incomes well above the national average to offset such costs, it might not be a target for out of staters looking for relocation. The truth hurts, sometimes!
New York
Cost of living: 22% above the U.S. average
Population: 19.7 million
Share of population 65+: 14.7%
The city that never sleeps is located here, and might seem like the next adventure. But New York is not the cheapest place to retire, according to the numbers. Surprise, surprise! The stats are a bit misleading because the big metropolis of NYC pulls up the percentage considerably. Costs in the city are a whopping 138.6% above the national average and that affects the statewide number. Upstate is gorgeous, though. There are a few areas with costs below the national average!
Rhode Island
Cost of living: 22% above the U.S. average
Population: 1.1 million
Share of population 65+: 15.8%
Tiny Rhode Island is a place that usually flies under the radar. Not many people actually live here, and it looks like there might be a good reason why. Financially, things are not advantageous for retirees! Living expenses are above average, to begin with, and some income is taxed. But there is one bright spot: Social security is not taxed for those with additional income below $80,000. There are pros and cons, for sure!
Washington
Cost of living: 21% above the U.S. average
Population: 7.1 million
Share of population 65+: 14.0%
Home to the famous city of Seattle, Washington has a lot going on. For those looking to escape city life, the Evergreen State has not one, but two mountain ranges and more than 3,000 miles of coastline. And even those who decide that urban living is the best for them, there is always a hike, swim, or boat ride in nature nearby. Known for the physically active senior citizens, many might see Washington as a great relocation. But not so fast: Cost of living is well above average, so savings are key!
Oregon
Cost of living: 18% above U.S. average
Population: 4.0 million
Share of population 65+: 15.9%
Another option in the Pacific Northwest is Oregon, home to the famously weird city of Portland. There’s always a bookshop or a farmer’s market to explore here, banishing boredom. Its quirky residents love how different things are, and retiring in the state has a few perks. Social security benefits are not taxed. Healthcare costs are slightly lower than the national average. And there’s no sales tax, at all! Still, the cost of living is higher than average. Newcomers must decide: Is that balance good enough?
New Hampshire
Cost of living: 18% above U.S. average
Population: 1.3 million
Share of population 65+: 15.9%
New Hampshire doesn’t tax Social Security or retirement income. It’s spoken of highly for healthcare, for seniors. And it has no sales tax, shockingly! There are clearly many reasons to retire in the Granite State. But for those who are done with their working years, it is worth noting that the cost of living is higher in general, compared to the rest of the nation. For some, it might still be a big upgrade!
Maryland
Cost of living: 17% above U.S. average
Population: 6.0 million
Share of population 65+: 13.8%
With close proximity to the nation’s capital and its cultural attractions, Maryland might be an interesting place to reside for older Americans. The DC Smithsonian is just a short ride away, and its capital of Baltimore has a lot to offer with its own entertainment. Sprawling suburbs offer a refuge, during the week. But financially, it’s a high tax place. Social security is exempt, but there is a catch: Maryland has both an estate and an inheritance tax!
Colorado
Cost of living: 17% above U.S. average
Population: 5.4 million
Share of population 65+: 12.7%
Rocky mountain high, this state is worth singing about. John Denver knew this was a special place to reside! For a variety of reasons, people are willing to deal with the elevated cost of living in retirement. Senior healthcare is better than a lot of states, and there are a lot of ways to be active around the mountains and rivers. Plus, the Colorado Old Age Pension program offers extra peace of mind. Those over 60 with low incomes are eligible for the benefit. Nice, Colorado!
Vermont
Cost of living: 12% above the U.S. average
Population: 626,249
Share of population 65+: 17.0%
Home to Ben and Jerry’s and a lot of arts and crafts, the Green Mountain State is next on the list. The northeast does seem to be home to a lot of beautiful places with a higher cost of living. And Vermont is no exception, in that sense! It’s gorgeous, through and through. But Social Security and other retirement income is taxable here. Perhaps residents are willing to deal with it, though, since they enjoy great healthcare in the state. Many lists put it in the top ten in the nation, in this category!
Delaware
Cost of living: 11% above U.S. average
Population: 934,695
Share of population 65+: 16.5%
Delaware is basically famous for being the first state in the union. Early to join, and enjoy the credit to this day! But it’s a small place, and not everyone knows what’s going there, tax-wise. The few who live there know that Social Security benefits are not taxed at all, and $12,500 of investment or pension income is potentially exempt as well. Healthcare costs are slightly below the national average, but there is one catch. Overall, daily living costs run 11% above the U.S. average!
Virginia
Cost of living: 7% above U.S. average
Population: 8.3 million
Share of population 65+: 13.8%
Virginia offers interesting perks for history buffs out there. The site of famous battles and events in the nation’s history, there are charming places galore for retirees to explore. It’s also one of the borders of Washington DC itself, a source of more entertainment. But are there reasonable financial perks? Social Security benefits are not taxed here, and up to $12,000 can be deducted in income tax per resident. Something to weigh against cost of living, perhaps!
Nevada
Cost of living: 4% above U.S. average
Population: 2.8 million
Share of population 65+: 14.1%
It’s time to evaluate Nevada! Those who don’t want to gamble with their savings might want to avoid this state. Sure, it is home to a world-class attraction. People travel from all over the world just to experience the lights and action of Las Vegas. Residents can enjoy novelty year-round if they so choose. But living there full time has its drawbacks. While no state income tax is very appealing, there is a catch: Costs are higher than average!
Minnesota
Cost of living: 4% above the U.S. average
Population: 5.5 million
Share of population 65+: 14.3%
Known far and wide as the Land of 10,000 Lakes, Minnesota has a lot of natural beauty for retirees to explore. It’s not hard to purchase a home on a private lake, with such abundance. Healthcare has a great reputation here, as well. But how are the taxes, in between canoe outings? Apparently, Minnesota taxes not only Social Security benefits but targets retirement income. This includes government, military, and private pensions. Yikes!
Utah
Cost of living: 4% above the U.S. average
Population: 2.9 million
Share of population 65+: 10.0%
Utah is known for its big, salty lake. But there’s more going on in the lives of residents there. The Beehive State offers endless options to stay active in the great outdoors. Between five national parks, five national forests, seven national monuments, and 43 state parks, wilderness and grandeur is highly accessible. But what about bank accounts, in the later years? Sadly, Utah taxes Social Security benefits. No one loves that detail, but that’s the truth!
Arizona
Cost of living: 3% above the U.S. average
Population: 6.7 million
Share of population 65+: 15.9%
Home of the Grand Canyon and legendary landscapes, the sunshine of Arizona is unmatched for desert lovers. In recent decades, it’s become a very popular retirement idea, too. So what’s behind all the moves? Perhaps it’s perks like below-average costs in its capital city, Phoenix, and a lack of taxes on groceries there. But throughout the state, there is a sales tax, and a slightly higher cost of living. Overall, it’s not the worst balance, nationwide. Hikers are definitely willing to deal with it!
Montana
Cost of living: 3% above the U.S. average
Population: 1.0 million
Share of population 65+: 16.7%
Nicknamed the Treasure State, it’s worth exploring why Montana got the moniker. Back in the day, there were large gold and silver mines. But today, no more! That’s not what’s drawing retirees to spend their time up north. Montana has Yellowstone National Park. For a change, residents can also enjoy Glacier National Park. Natural beauty does seem to be a big draw. But financially, it’s not perfect: Social security and other income are taxed in the later years. Pros and cons, for sure!
North Dakota
Cost of living: 1% above U.S. average
Population: 736,162
Share of population 65+: 14.2%
North Dakota is not too crowded, by any means. With a population of just over 730,000, there is space to breathe and relax in a refuge from city life for retirees. It’s beautiful, and the people who choose life there are regarded as pretty friendly folks. Social security and other income are slightly taxed, between 1-3 percent. And the cost of living isn’t so bad, overall. At just 1% above the national average, people don’t complain!
Florida
Cost of living: 1% above U.S. average
Population: 19.9 million
Share of population 65+: 19.1%
The Sunshine State is notoriously popular for seniors looking for a second chapter. Around 3.8 million older retirees do call Florida home, which is a real community of sorts. Warm weather, beautiful beaches, and access to Miami and DisneyWorld for entertainment seem to be a real draw. But most of all, it’s the taxes. Florida doesn’t have any state income tax, inheritance tax, or estate tax. On top of that, retirement income and social security are tax-free. What’s not to love, really?
Wyoming
Cost of living: Same as U.S. average
Population: 583,029
Share of population 65+: 13.8%
Remote Wyoming doesn’t get a lot of press, does it? Admittedly, it is pretty quiet. But that doesn’t mean there isn’t a reason to talk about it! Those who love world-class mother nature will enjoy owning property there, away from the world. There is no state income tax, since many government expenses are covered by revenues from mineral and oil rights. There is low sales, on top of the literally average cost of living. Cowboys at heart, come on down!
Maine
Cost of living: 2% below U.S. average
Population: 1.3 million
Share of population 65+: 18.2%
Way up in the north of the Northeast lies Maine. The Pine Tree State has plenty of retirees, making up nearly a fifth of its overall population. Healthcare for retired couples is a bit below average for the nation, but there are some tax issues to think about. Social Security benefits are left alone, but other retirement income is taxed. For large estates, there is an estate tax, too. But for those who cherish peace and quiet, community, and a whole lot of harbor, Maine could still be the answer!
Pennsylvania
Cost of living: 3% below U.S. average
Population: 12.8 million
Share of population 65+: 16.7%
Home to contrast, this state boasts both Philadelphia and the Amish. But what about retiress? Health care costs in Pennsylvania are slightly below the national average. Social security is not taxed, and the cost of living is below the national average. All sounds good, so far. But chatter about the fiscal health of the state makes these promises uncertain, for the long term. Pennsylvania ranks at the bottom nationally, for budget balance. How will gaps be covered, if not through tax increases? Only time will tell, indeed.
South Dakota
Cost of living: 4% below the U.S. average
Population: 851,058
Share of population 65+: 15.2%
Most people can easily say that South Dakota has Mount Rushmore and a whole lot of buffalo. For tourists, it’s tons of fun. But what are the lives really like for older residents? As it turns out, pretty good. The cost of living is below average, and it has no income tax. None, at all! The sales tax is also low, and there are inheritance or estate taxes. Sounds like a big difference, from the states many currently call home!
Illinois
Cost of living: 4% below U.S. average
Population: 12.9 million
Share of population 65+: 13.9%
Home the world-renowned city of Chicago, Illinois residents never have to be bored. With sports stadiums, opera, theater, and museums, and a lot of Lake Michigan shoreline, there are endless reasons to retire in close proximity to this midwest gem. The suburbs are sprawling, and beyond that, there is small-town life throughout the state. The cost of living is below the national average outside the big city, too. Currently, retirees enjoy a lot of tax breaks. But because of state budget problems, year after year, some analysts are unsure if that can continue. Wait and see, maybe!
Wisconsin
Cost of living: 4% below U.S. average
Population: 5.8 million
Share of population 65+: 15.2%
The dairy state might be an attractive destination for cheese lovers, at the very least. But Wisconsin is also home to Milwaukee, a moderately big metro area with a lot of attractions. Sports fans will enjoy the baseball opportunities in the city and the football opportunities outside of it, way out in Green Bay. Financially, the cost of living is below the national average and Social Security is exempt from state tax. Unfortunately, other retirement income may not be — and healthcare costs are above average!
Idaho
Cost of living: 5% below the U.S. average
Population: 1.6 million
Share of population 65+: 14.3%
Idaho has enough potatoes, for retirement cooking. But what else is going on there? As it turns out, some tax breaks worth looking into for the next chapter ahead. With a cost of living already below average, residents laud their lack of inheritance and estate taxes. Social security is not targeted for taxation, either. Sounds good, say most looking into a move. But there is a catch, or two: Statewide sales tax and income tax!
New Mexico
Cost of living: 5% below U.S. average
Population: 2.1 million
Share of population 65+: 15.3%
In New Mexico, the cost of living is below the national average. But that is probably balanced out for retirees by a few other realities. Social Security and other pension payouts are subject to taxation. Sad times! Those with low incomes, though, might qualify for an exemption. In fact, it is possible to live on social security alone, according to some residents who have tried it. Combined with safety, a vibrant arts scene, and beautiful landscapes, New Mexico might be the secret combination many have been seeking!
North Carolina
Cost of living: 5% below average
Population: 9.9 million
Share of population 65+: 14.7%
Basketball, BBQ, and waterfalls are just the beginning. With its mild weather and gorgeous coastline of the Atlantic ocean, North Carolina has a lot of appeal these days for new residents. For retirees, average sales taxes and friendly cities are attractive reasons to stay. Social security isn’t taxed, either. It’s worth noting that seniors who have a lot of income outside of government benefits will have a tax bill. But over age 65 at lower incomes, property taxes are eliminated!
Georgia
Cost of living: 7% below the U.S. average
Population: 10.1 million
Share of population 65+: 12.3%
Warm weather, peach trees, and low living costs are all great reasons to retire in Georgia. According to recent assessments, healthcare costs are below average for seniors. Plus, the tax situation is very appealing: No Social Security taxes, and a deduction of up to $65,000 per person for retirement income. Sales tax is pretty moderate, compare to other states. And finally, perhaps most appealing to some, there are no inheritance or estate taxes!
South Carolina
Cost of living: 7% below the U.S. average
Population: 4.8 million
Share of population 65+: 15.8%
Mild weather and southern charm combine in South Carolina, an increasingly popular retirement destination for Americans. What are the real reasons people are choosing to relocate to the Palmetto State? With no social security, inheritance, or estate taxes, peven former skeptics see the benefits quickly. Living costs are below average to begin with, and property taxes are low for homeowners. Admirers just have one question: How does the state achieve it all?
Louisiana
Cost of living: 10% below U.S. average
Population: 4.6 million
Share of population 65+: 13.6%
Easy access to the Gulf Coast and New Orleans is one thing Louisiana offers all residents. If vibrant southern culture is part of the criteria, this state can’t be beaten. When it comes time to retire, finances are also a factor, of course. Incomes are lower than average in Louisiana, but so is the cost of living. For retirees relocating with a lot of savings, it could be a good deal! Gumbo and jazz, anyone?
Texas
Cost of living: 10% below U.S. average
Population: 27.0 million
Share of population 65+: 11.5%
Texas has become a population relocation for many at all stages of life, especially in recent years. Houston, Austin, Dallas, and small-town living seem to offer something for everyone, combined with a stable economy. 2020 saw this skyrocket, with a wave of Californias fleeing for easier financial pastures. What does the Lone Star State offer retirees, specifically? Low cost of living is just the beginning. No income, Social Security, pension, or retirement income taxes. At the state level, it’s all safe!
Missouri
Cost of living: 10% below U.S. average
Population: 6.1 million
Share of population 65+: 15.4%
Retirement advantages abound in the Show-Me State, year after year. Missouri has low living costs, year round. Retirees should be aware that Social Security and public pensions are taxed, in a limited way. Private pensions are taxed like regular income. But that’s for couples with incomes over $100,000! Below that, there are some exemptions. In general, Missouri is regarded as moderately tax-friendly for seniors. On a case-by-case basis, it might be the right choice!
Ohio
Cost of living: 12% below U.S. average
Population: 11.6 million
Share of population 65+: 15.5%
Ohio has a vibrant sports culture and the Rock and Roll Hall of Fame. The state hosts medium cities, safe suburbs, and small towns. Overall, it’s a place with plenty of lifestyle options, for young and old. Retirees tend to like it for a few key reasons. Below average living costs combined with social security tax exemption is a great start. But they also enjoy property tax discounts for seniors with low income. Way to go, Buckeye State!
Iowa
Cost of living: 12% below U.S. average
Population: 3.1 million
Share of population 65+: 15.8%
Corn, horses, and friendly folks are the backbone of Iowan life. And residents wouldn’t have it any other way! Low living costs make the Hawkeye State very appealing for older Americans. That even includes health care costs, which are 5.6% below average, a welcome rele9f for many. But the taxes less than ideal, beyond social society’s exemption from the code. Some retirement income can be taxed at nearly nine percent! Depending on the household, Iowa is still worth a look.
Tennessee
Cost of living: 12% below the U.S. average
Population: 6.5 million
Share of population 65+: 15.0%
Tennesee is often mentioned as a great option for budget-conscious retirees. But why? Maybe it’s because health care costs are below average. Or maybe it’s the lack of state income taxes. Maybe the cost of living, 12% below the national average? With cities to offer entertainment throughout the year, and gorgeous mountain drives on the weekend, there’s a lot to see and experience with all those savings. Never boring, always polite and friendly, Tennessee just might be the right choice!
Nebraska
Cost of living: 12% below U.S. average
Population: 1.9 million
Share of population 65+: 14.4%
Nicknamed the Cornhusker State, Nebraska is a wild and wonderful place to retire. In many ways, it’s a place to find peace. Low crime, beautiful prairie landscapes, and a low cost of living mean saying goodbye to a lot of city troubles. Tax-wise, there could be a few hiccups, though. Social security is exempt for those with less than $43,000 of retirement income. Relieving, sure. But most other retirement income can be taxed at normal rates!
Michigan
Cost of living: 12% below U.S. average
Population: 9.9 million
Share of population 65+: 15.4%
The midwest has a jewel called Michigan, and more retirees have been taking notice. Suburbs, cities, and remote lakehouses are all options here. Plus, the Great Lakes provide natural beauty and extensive freshwater shoreline. It has a low cost of living, a few options to minimize taxes in the golden years. Social security can be deducted from tax bills, or residents can substitute tax deductions in other areas. An accountant can explain the biggest benefits, for everyone!
Alabama
Cost of living: 13% below average
Population: 4.8 million
Share of population 65+: 15.3%
Sweet home Alabama might be the next home sweet home for retirees looking for a better lifestyle. Right in the Heart of Dixie, warm weather, plenty of golf, and sunny beaches are all available at low cost. Healthcare is cheaper than the national average, and Social Security benefits are exempt from an already low tax system. Public and private pension income is also free from taxation. An enthusiastic local football culture is just the cherry on top!
Kentucky
Cost of living: 14% below the U.S. average
Population: 4.4 million
Share of population 65+: 14.8%
Kentucky does not currently have the best healthcare rating for seniors. But the other perks of living in the Bluegrass State might still be appealing,m on balance. For example, residents enjoy tax exemption for Social Security benefits and up to $41,110 of retirement income. The cost of living is low, day to day. And the horse racing culture is unique, with nothing quite like it in the nation! Big hats and cocktails, anyone?
Kansas
Cost of living: 14% below average
Population: 2.9 million
Share of population 65+: 14.3%
Maybe people haven’t heard much about Kansas since Dorothy skipped down the yellow brick road. But there is a modern lifestyle out there, and it’s an impressive 14% below the national average in expenses. That is still true, even with a relatively high sales tax. When retired, a few other issues tend to come up when considering a move to the sunflower state. For those with gross income below $75,000, Social Security benefits are exempt from taxes. There is no estate or inheritance tax either. As Kansas residents know well, there’s no place like home!
Mississippi
Cost of living: 15% below U.S. average
Population: 3.0 million
Share of population 65+: 14.3%
And what about Mississippi living? The South seems to have a lot of hidden gems, these days. Low costs are just a way of life for residents of the Magnolia State. Retirees are happy with the generous tax breaks, too. Social Security, as well as distributions from IRAs and 401(k)s are not taxed at all. Property taxes are minimal, at the same time. While healthcare is not currently the best in this state, the appealing financial breaks are hard to ignore!
Indiana
Cost of living: 15% below the U.S. average
Population: 6.6 million
Share of population 65+: 14.3%
With friendly suburbs and entertainment in the capitol, Indiana is currently home to 6.6 million folks. The state is a great option for those looking for low-cost life in the midwest. Incomes are lower overall, so it may not be easy-breezy for lifelong Hoosiers. But those relocating with reasonable savings have an advantage getting the most bang for their buck. Something to keep in mind for seniors: Social security income is exempt, but most other kinds are not!
Oklahoma
Cost of living: 16% below U.S. average
Population: 3.9 million
Share of population 65+: 14.5%
Oklahoma is not currently ranked highly in healthcare for seniors. But the other financial draws mean that it still might be worth a look. Social Security benefits are tax-free, all available to spend on the low cost of living. Up to $10,000 of retirement income per person is exempt too. Not a bad deal, for many Americas looking to relocate. A new home soon is available for seniors in The Sooner State, if they dare!
Arkansas
Cost of living: 17% below average
Population: 3.0 million
Share of population 65+: 15.7%
Arkansas is often overlooked, but not today. Bordering the Mississippi River, hikers have always known the Wonder State is for its wilderness, mountains, caves, and hot springs. But what about full-time residents, in the older years? Arkansas is seen as a tax-friendly state for retirees, and for good reason. At age 65, residents receive a property tax freeze and reductions from other local obligations. Social Security benefits and some retirement income — up to $6,000 — is tax-exempt, too!
West Virginia
Cost of living: 17% below the U.S. average
Population: 1.8 million
Share of population 65+: 17.8%
Time for the winner! West Virginia is often referred to as Mountain State, for good reason. It’s completely within the Appalachian Mountain region —the only state to boast this title, in fact. With abundant natural beauty around its small towns, friendly neighbors make this destination a great option for newcomers. Around 1.8 million people currently enjoy West Virginia year-round. Advertising the lowest cost of living in the country, it deserves attention from everyone!