To move or not to move when you retire? That’s the big question.
Picking a place to retire is one of life’s most consequential decisions — and ultimately, a deeply personal choice. You may want to settle down by the beach or in the mountains. Maybe you prefer golf over cross-country skiing, or you just want to be near your kids or grandkids. With all these possibilities in front of you, you may not know where to start.
To find some objective answers to the where-to-retire question, Bankrate crunched a bevy of statistics on costs of living, public health and other metrics to create a comprehensive ranking of the best and worst states to retire in the U.S. We analyzed five broad categories across all 50 states: affordability, overall well-being, the cost and quality of healthcare, weather and crime.
The category that we weighed the heaviest was affordability, to reflect the challenges that so many Americans face in today’s economy. The housing market remains competitive, with high borrowing costs, expensive housing prices and low inventory. At the same time, inflation has rocked Americans’ wallets over the last two years, leaving many feeling behind on their retirement and looking for ways to stretch their savings.
It’s important to note our ranking is simply a starting point for making a decision. If you own a paid-off home in a high-cost area like Boston or Los Angeles, maybe affordability isn’t your priority. And, of course, not everyone likes the sweltering summers of the Sun Belt states.
Don’t rule out places that seem unlikely. It’s important for people to get excited about that next chapter of life. It’s a new adventure, and you should really take the time to do the prep work financially and personally so that you make smart decisions.
— Kerry HannonRetirement Expert and Author of ‘In Control at 50+: How to Succeed in the New World of Work’
Key takeaways
- The best state to retire is Iowa because of its lower cost of living, affordable but high-quality healthcare and low crime. Delaware, West Virginia, Missouri and Mississippi round out the top five.
- The best and worst states for retirees are split geographically. The Midwest and the South claim the top five states, while the Northeast and West claim the bottom five states, primarily because of the difference in cost of living.
Best and worst states to retire in 2023
The common narrative is that retirees leave colder or high-cost states such as New York, New Jersey and California for traditional retirement destinations with warm weather, a relatively low cost of living and other perks for seniors. And while that continues to be the case in 2023, experts say older Americans shouldn’t rule out places that aren’t traditionally top of mind for retirement.
Bankrate’s latest study found that Iowa is the best state for retirement, followed by Delaware, West Virginia, Missouri and Mississippi. Alaska, on the other hand, held last place in our ranking. The state was dragged down by back-of-the-pack scores in affordability and weather. In addition to Alaska, the remaining four worst states for retirement were New York, California, Washington and Massachusetts.
| 5 best states to retire | 5 worst states to retire |
|---|---|
| 1. Iowa | 50. Alaska |
| 2. Delaware | 49. New York |
| 3. West Virginia | 48. California |
| 4. Missouri | 47. Washington |
| 5. Mississippi | 46. Massachusetts |
Why Iowa is the best state to retire
You may be wondering: Why Iowa? With its vast farmlands, peaceful countryside and friendly locals, Iowa offers a unique retirement experience for many Americans seeking a more relaxed and affordable lifestyle with access to the outdoors and retirement-age communities.
Iowa’s affordability is a big draw for retirees. Iowa is the sixth cheapest place to live in the U.S., according to the Council for Community and Economic Research, which is an advantage for retirees on a fixed income. Lower housing costs also helped prop the Hawkeye state up to the No. 3 spot for affordability. According to Redfin data, the median home price in Iowa is $239,400, which is significantly lower than the nationwide median home price of $388,800. Additionally, homeowners insurance in Iowa is below the national average.
Iowa ranks in the middle for taxes, coming in at No. 23 for property taxes and No. 22 for state and local sales tax. The state also does not tax Social Security benefits and offers exemptions for state taxes on retirement income for individuals aged 55 and older in 2023. Iowa is praised for its high-quality healthcare services and low healthcare costs.
Approximately 20 percent of Iowa’s population is age 65 and older, making it a good place to find retirement-age friends. However, the state ranks poorly for racial and ethnic diversity, community well-being, and experiences colder weather and a higher incidence of tornadoes.
Other top states for retirement include Delaware, West Virginia, Missouri, and Mississippi. Each state offers its own set of advantages and disadvantages for retirees, such as affordability, healthcare quality, and overall well-being.
While many retirees consider relocating for various reasons, such as cost of living and quality of life, it’s essential to assess your retirement savings and financial situation before making a move. Experts recommend considering states in the Midwest and South for more affordable living options, as well as looking for areas with reasonable healthcare costs to help stretch retirement income. If you find yourself off track with your retirement savings, it’s important to calculate how much more you need to reach your goal and start developing a plan. “Determining how much you have available for retirement then leads to all the other decisions for your lifestyle,” said an expert. “Once you know that, look at your expenses today and ask yourself: ‘Can I afford that?’ If not, then the biggest impact would be determining where to live.”
Here are 3 expert tips for retirement planning:
1. Take current and future costs to relocate into account:
“If you’re going to uproot and relocate to another area, you have to make a decision not only about the way things look today, but whether a place is going to be sustainable and less expensive over the long term. You have to look at the full picture.” – Larry Sprung, Financial Advisor and Founder of Mitlin Financial
2. Consider a trial run in a new place:
“Consider renting a place for six months to ensure you have a community there. See if it’s easy to join groups, whether it’s joining a bowling league or a volunteer organization. Set up your community before you take that leap.” – Kerry Hannon, Retirement Expert and Author of ‘In Control at 50+: How to Succeed in the New World of Work’
3. Saving on housing costs isn’t the whole story:
“Making a decision about your housing can impact your bottom line, but it’s also important to think about how your home works for you. Think about your needs now and into the future, and know that your needs might change. How does your home work for yourself today and your future self?” – Rodney Harrell, Vice President of Family, Home and Community at AARP’s Public Policy Institute
For a detailed analysis of how your state ranks for retirement, please refer to the methodology section provided. following sentence:
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