The 10 Best States for Retirement

School of Financial Wellness

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When planning for retirement, many people will focus on their retirement income above all else. Although having adequate income during your retirement is critical, another crucial part of this process involves deciding where you will spend your retirement. After all, the cost of living, taxes, and amenities for each state vary greatly, and those factors can impact how much income you will require to meet your goals.

Choosing a location for retirement can be both exciting and daunting, as there are so many things to consider. To help you make this decision, we have highlighted 10 states that provide significant advantages for retirees. Be sure to catch part two of this article series where we detail the 10 Worst States for Retirement. Sign up for our mailing list, so you don’t miss it!

10 Best States for Retirement

In developing this list, we understand that picking the best 10 states for retirement is somewhat subjective, so we identified several key factors that we believe provide significant advantages for retirees. These factors include:

  • Cost of Living
  • Tax Rates
  • Crime Rates
  • Healthcare Quality / Availability
  • Local Culture & Amenities
  • Climate

#10 – Pennsylvania

Rich in culture, Pennsylvania is number 10 on our list of best places to retire. You will find a robust history of our nation in Pennsylvania, with ample opportunities for historical tours and visiting landmarks. The state boasts the founding streets of our nation’s government in Old Town Philadelphia, including the Liberty Bell. History buffs can also find the Valley Forge National Historical Park and Gettysburg National Military Park among this state’s treasures. With proximity to Amish farmland, retirees will have access to fresh produce, baked goods and handmade furniture at reasonable costs. For the foodies, the state houses a growing culinary scene. Pennsylvania is often mentioned as a good state for retirement because of low sales taxes, including no tax on food or clothing, affordable housing, and safe living.

#9 – South Dakota

Although South Dakota may not be at the top of your retirement destination list, this state features abundant scenic retreats, outdoor activities, and a small town, laid-back lifestyle. Affordability is the primary reason to consider South Dakota as a retirement destination, as it offers a low cost of living, reasonable health care costs, and low taxes. So, if you are looking for a relaxed, inexpensive spot to retire, South Dakota is your place. There you’ll enjoy access to various national parks and monuments, including Mt. Rushmore, Badlands National Park, Jewel Cave, and the Lewis & Clark National Historic Trail.

#8 – Idaho

Another overlooked northwestern state that outdoor enthusiasts will enjoy is Idaho. With rivers and national parks, retirees will have plenty of access to mountain activities, hiking and river sports. Idaho residents experience a higher altitude climate with low humidity and sunshine that boasts the best of all 4 seasons. In the summer, the temperate climate will help you stay comfortable without high energy costs. On the other hand, you will certainly experience a true winter while living there. Idaho living affords access to scenic as well as city living, providing a culturally diverse opportunity for adventurous retirees. Idaho makes this list due to its affordable living, low crime rates, high health care quality, tax exemptions for Social Security benefits, and no state inheritance tax.

#7 – Georgia

A warm climate and reasonable cost of living make Georgia a great option for retirement. Living in the Southeast means warm summers and mild to moderate winters, and with access to the Atlantic coast and the Appalachians, you won’t need to travel far to find a beach or the mountains. Georgia boasts diverse landscapes, with coasts to the southeast and mountain life in the Blue Ridge Mountains with white water rafting on the Ocoee. Also famous for the Masters Golf Tournament in Augusta, Georgia provides ample opportunity for the sports enthusiast. In this state you can enjoy NFL, NBA, and MLB events while visiting Atlanta, home of the Mercedes-Benz Stadium. Georgia makes this list because it offers a moderate cost of living, no state taxes on inheritance, a healthy number of doctors per capita, and a low serious crime rate.

#6 – New Hampshire

New Hampshire may be small, but the state is not short on amenities. Retirees in New Hampshire can enjoy the beauty of all four seasons with access to the mountains, hiking, lake life, and beaches, and if you’re looking for access to a city, Boston is only a short drive. Outdoor enthusiasts can set their sights on the Appalachian Trail Head, White Mountain National Forest or the Whaleback Lighthouse. Beer enthusiasts will enjoy the spectacular breweries that are located across the state, and foodies will relish the many culinary treats found locally. In addition to promoting a high quality of life, New Hampshire offers strong healthcare, no state sales or earned income tax, and low crime rates.

#5 – Tennessee

Music lovers will agree that Tennessee makes a nice choice for retirement. You will find Rhythm and Blues, Country, Rock and Roll, and Bluegrass filling the Tennessee air. The Volunteer State offers residents a small-town charm as well as city living, with number of options for sporting events, music festivals, and outdoor adventure. Retirees can enjoy hiking, waterfalls, rivers, lakes, whitewater rafting, and fishing with the state’s more than 1,300 bodies of water. And don’t overlook the Great Smoky Mountains, which span over 800 square miles of Tennessee and North Carolina. In addition to natural beauty, Tennessee maintains a low cost of living with no income tax for earned income (with exception of dividends and interest), a temperate climate and a central location that makes the beauty of the entire Southeast accessible by car.

#4 – Arizona

If you are looking to retire in a location with mild winters, hot days, and cool nights, look no further than Arizona. The state offers a plethora of communities that support the needs of those enjoying their retirement. Living in Arizona provides access to some of the most spectacular landscapes in the country, like the wonderous Grand Canyon or the spiritual red rocks of Tucson. Retirees will also find a number of National Monuments in Arizona in addition to the Hoover Dam. Beyond beautiful desert scenery and sunsets, Arizonans can also enjoy ample outdoor activities, sporting events, museums, amusement parks, and a salivating culinary landscape. Retirees in Arizona will experience low costs of living, no state income tax on Social Security benefits, no state inheritance tax, and a healthy number of doctors per capita, making this one of our top retirement spots.

#3 – Texas

Texas has been gaining popularity with the retirement community in recent years. Contributing factors to this rise include low cost of living, low housing costs, no state income tax, low serious crime rate, and a growing economy. Retirees in Texas can enjoy the state’s diverse landscapes, including access to the Gulf of Mexico, the scenic Hill Country and several National Parks. The state boasts many points of interest for history or nature buffs like, The Alamo, Big Bend National Park, Guadalupe Mountains National Park, and Padre Island National Sea Shore. If you’re looking for large city life in your retirement, Texas could be a great choice with areas like Houston, Dallas / Fort Worth and San Antonio. In addition, seniors with a quest for knowledge can audit college courses for free at the University of Houston. This state makes our list because of its ample healthcare options, low cost of living, and vast entertainment options.

#2 – North Carolina

North Carolina is commonly known as the center for motor sports and banking hub of the south, but it also offers a variety of landscapes and entertainment options. From the Outer Banks and beaches of the Atlantic Coastline to the hiking trails and ski slopes of the Blue Ridge and Appalachian Mountains, this state is an outdoor enthusiast dream. Those who retire near the Charlotte area will have access to mountains and beaches within a 3-hour drive, and those looking to enjoy all 4 seasons won’t be disappointed here. North Carolina also boasts the Pisgah, Nantahala, Uwharrie and Croatan National Forests, which are filled with streams, hiking, rafting and waterfalls that can be accessed with little to no cost. The culinary and craft brewing scene is also a gem of the state, with the Charlotte and Asheville areas hosting over 60 craft breweries and numerous award winning restaurants. Sports enthusiasts will also enjoy professional sports events from the NFL, NBA, NHL, MLS, NASCAR and PGA. North Carolina makes this list because of its temperate climate, big city and rural options, vast entertainment and culinary options, a lower cost of living, diverse natural wonders, and its centralized location along the eastern seaboard.

#1 – Florida

With endless miles of coastline and mild winters, saying Florida is the number 1 retirement location seems obvious, but in addition to relaxing on a beach, there are a number of activities that the Sunshine State has to offer. From visiting the Southern Most Point of the United States to exploring military forts and the Ocala National Forest, to visiting the Kennedy Space Center and the many amusement parks, retirees will have no trouble keeping themselves occupied. It’s no surprise than many people from colder climates opt to spend their summers in Florida. Retirees can enjoy fishing, playing a round of golf, or bicycling along Florida’s miles of bike trails. They can also catch the NFL, NHL, MLB, NASCAR, and PGA events across the state. Florida tops our list of retirement states because of its climate, natural features, affordable home options, no state income tax, and no inheritance tax. In addition, Floridians generally have high ratings for happiness and quality of life, with options to live the city life, the beach life or both.

How does our home state of Alabama stack up?

For many of us, Alabama is likely #1 on our list of retirement destinations. So, how does Alabama measure up against these top 10 states?

In our rankings, Alabama comes in at a strong #17 overall, well above the national average. Here’s a breakdown of how Alabama ranked against the other states in the 6 categories we evaluated:

  • Cost of Living: Alabama’s cost of living is a strength in these rankings as it comes in below the national average. Housing costs are comparatively low, but transportation costs can be higher due to a weak system of public transport that creates a need for personal transportation in mostly rural Alabama.
  • Tax Rates: Taxation in Alabama has its pros and cons. Although Alabama does have a state income tax, Social Security Benefits and Pensions are exempt from taxation, which is great for retirees. In addition, Alabama does apply sales tax to food and clothing, while some other states exempt these categories.
  • Healthcare Quality / Availability: Healthcare was a weakness for our home state in these rankings. And as we know, healthcare is very important to retirees. Alabama has average healthcare costs when compared to other states. However, residents in rural areas may have fewer healthcare options, as there are fewer doctors per capita in Alabama than most other states. Due to these factors the overall health of Alabamians usually ranks in the bottom 10% of states.
  • Local Culture & Amenities: Amenities are a major strength for Alabama in our rankings. This may come as a surprise to many, but we feel that Alabama is a hidden gem of adventure. In fact, we put Alabama in the top 20% of states for its unique features including: the gorgeous Alabama Coastline, Appalachian Foothills, numerous lakes and parks, award winning culinary scene, the Robert Trent Jones Golf Trail, Talladega Superspeedway, and almost perennial national champion college football teams.
  • Climate: Depending on who (and when) you ask, you may get a mixed response on Alabama climate, but we considered Alabama’s diverse climate a strength. Mild winters are a huge benefit, while steamy, humid summers can be a turnoff for some people living outside the mountains. Alabama experiences 4 seasons (in most years and areas of the state), but fall and spring tend to be short lived. Tornados are also a downside to living anywhere between the 2 major mountain ranges of the U.S., but in recent years Alabama has seen more than its share of deadly storms. Major droughts are rarely an issue in Alabama, a huge positive for farmers and outdoor enthusiasts, and the occasional white Christmas isn’t unthinkable. In addition, the climate can vary dramatically from the southern coastline to the foothills of the Appalachians, so no matter your preferences, Alabama likely has a place for you.
  • Crime Rates: A major weakness for Alabama in our rankings was the crime rate. When compared to other states, Alabama has a high rate of violent crime with 519.6 crimes per 100,000 people. The numbers are especially high for aggravated assault and murder, where Alabama reports the 5th most of these crimes of any state per capita. As crime rates typically correlate with poverty rates, Alabama’s 7th highest poverty rate in the nation is seen as a major contributor to these numbers. Alabama also has the 10th highest imprisonment rate in the country at 626 adults per 100,000 residents.

Let Meld Financial Help You Plan a Successful Retirement

Choosing a location to spend retirement is only one part of your retirement plan, and it should be an experience that is exciting and rewarding. Working with Meld Financial can alleviate many of the stresses related to your retirement planning. If you are looking for help saving and planning for your retirement, contact us. Our team of wealth managers consists of financial, legal and tax professionals who will help you develop your FINANCIAL FINGERPRINT™. Then you can be confident that you are on the road to a successful retirement.

Why Meld Financial?

Meld Financial, Inc. is an independent wealth management firm located in Birmingham, AL.

We specialize in financial planning, investment management, employee benefits and executive benefits for individuals, families, trusts, foundations and institutions.

We provide independent and objective services melded with customer-driven financial goals.

Mark McGarvey - Chairman - Meld Financial

“We will always recommend the same course of action we would choose for ourselves, given the same circumstances.”

-Mark McGarvey, Chairman