Where You Should Retire in the USA: States Ranked From Worst To Best

When we attain retirement age, a lot of us plan to relocate to that dream state we always imagined ourselves growing old in. Some of us leave for better healthcare, lower costs of living, and friendlier tax laws, and others move for favorable weather and family. We ranked the 50 states in the U.S. from the most expensive to the least expensive to live in, with data on tax breaks, yearly income, and healthcare costs. We got the data from Kiplinger, National Association of Realtors, Bureau of Labor Statistics, Milken Institute and more.

Wikimedia

Wikimedia


50. HAWAII

Cost of living: 87% above the average in U.S. Population: 1.4 million. Best city: Maunawili. HIGHLIGHTS: The best town for retirees in this tropical state is Maunawili on the island of Oʻahu, says Niche.com. It is home to popular hiking spots and close to the state capital, Honolulu. Generally, Hawaii is full of nature and water sports. CHALLENGES: The cost of living is very high in Hawaii — 87% above average. That is even greater than the other sunshine state, California. The average earning for 65 plus individuals is over $71K, according to Kiplinger. Few of its residents meet U.S. poverty guidelines.

Image Credit: Pixabay

Image Credit: Pixabay


49. CALIFORNIA

Cost of living: 52% above the average in U.S. Population: 39.56 million. Best city: Beverly Hills, per Yahoo! HIGHLIGHTS: It is hard to argue against California's natural attraction. The state has forests, deserts, beaches, and more. It is home to big cities for those desiring fast-paced living. CHALLENGES: Besides Hawaii, California has the second-highest cost of living. If you are a fan of bright weather, you will have to pay up! Some are, and it is costing them — 19% of Californians live in poverty, says the U.S. Census Bureau.

Image Credit: Pixabay

Image Credit: Pixabay


48. MASSACHUSETTS

Cost of living: 38% above the average in U.S. Population: 6.902 million. Best city: Northampton, says Forbes. HIGHLIGHTS: This is a state with great history — the landing place of the Mayflower, the Boston Tea Party, one of the 13 initial colonies, and more. CHALLENGES: Massachusetts, also known as the Bay State, can be costly for retirees, says Kiplinger. The living costs are high, 38% above the U.S. average, there are high healthcare costs and it is not tax-friendly. If you hate the cold, East Coast winters are not for you.

Image Credit: Pixabay

Image Credit: Pixabay


47. ALASKA

Cost of living: 32% above the average in U.S. Population: 737,438. Best city: Anchorage, says Yahoo! Finance. HIGHLIGHTS: Kiplinger says the Last Frontier is extremely tax-friendly to retirees, but apparently not many take advantage of this. Alaska has a small population of seniors. CHALLENGES: The cost of living is pretty high there — 32% above the U.S. national average, per Kiplinger. Healthcare costs are essential for seniors and they are over the national average as well in Alaska. Also if you are looking for big city living, Alaska is not your state!

Image Credit: Pixabay

Image Credit: Pixabay


46. NEW JERSEY

Cost of living: 27% above the average in U.S. Population: 8.909 million. Best city: Long Beach Township. HIGHLIGHTS: It is a state with so much to do and see during your Golden Years. Walk the boardwalk and appreciate the ocean scenes in Ocean City or take a fast train ride into New York City. The Garden State has a great history as well for those history buffs or the history-curious! CHALLENGES: Compared with places like South Dakota and Montana, New Jersey has a much higher cost of living. Medical care is expensive and so are property taxes, says Kiplinger. This is not a great option for low-income retirees or those looking to save some cash. 

Image Credit: Pixabay

Image Credit: Pixabay


45. CONNECTICUT

Cost of living: 24% above the average in U.S. Population: 3.573 million. Best city: Darien, says AreaVibes.com. HIGHLIGHTS: Income for seniors is some of the highest in America, Kiplinger says. Even with the huge cost of living, retirees may be able to afford it if they get a retirement job. CHALLENGES: It is not very tax-friendly for retirees with real estate taxes being some of the worst in the country, says Kiplinger. Most retirement income is fully taxed and presumably, some residents may face taxes on their Social Security benefits. There are not many benefits to alleviate the burden either.

Image Credit: Pixabay

Image Credit: Pixabay


44. NEW YORK

Cost of living: 22% above the average in U.S. Population: 19.54 million. Best city: Great Neck, says Yahoo! Finance. HIGHLIGHTS: Living in New York City might be a good option for retirees — it is very walkable with many necessities close by and delivery services abound! Small houses mean living quarters are very manageable. CHALLENGES: Although it is fun and walkable, New York City (and in fact, New York state) are best for well-to-do retirees. It is not very tax-friendly for retirees and according to Kiplinger, 65 plus individuals suffer from high poverty rates.

Image Credit: Pixabay

Image Credit: Pixabay


43. RHODE ISLAND

Cost of living: 22% above the average in U.S. Population: 1.057 million. Best city: Jamestown. HIGHLIGHTS: One of the original 13 colonies of the U.S., Rhode Island has so much history for history buffs and ocean panoramas for nature lovers. It is located near enormous touristy, metropolitan areas for those that love to sightsee. CHALLENGES: This small eastern state is not very tax-friendly, per Kiplinger. Also, the high cost of living might tear a hole in the retiree's purse. If you have been saving for a long time, have a financially supportive family, or perhaps have won the lottery, Rhode Island can be a good choice for you.

Image Credit: Pixabay

Image Credit: Pixabay


42. WASHINGTON

Cost of living: 21% above the U.S. average. Population: 7.1 million. Best city: Vancouver. HIGHLIGHTS: Generally speaking, Washington isn't the cheapest place to live in, and those who dream of the Pacific Northwest lifestyle at budget prices might opt for Vancouver instead. There, seniors will find more affordability and the lack of a state income tax. CHALLENGES: Its cost of living is 21% above the national average, which is less than Hawaii and California, but still might be an impediment for some seniors. The average income for households 65 and older is over $55K, which might help balance your budget out.

Image Credit: Pixabay

Image Credit: Pixabay


41. NEW HAMPSHIRE

Cost of living: 18% above the U.S. average. Population: 1.3 million. Best city: Gilford. HIGHLIGHTS: It is quite tax-friendly in New Hampshire, says Kiplinger, as it does not tax any retirement income. For people with numerous healthcare needs, the state ranks 5th for senior health, as per the United Health Foundation. Another benefit: its picturesque New England landscapes. CHALLENGES: You got to pay up for those breathtaking views, though! New Hampshire's cost of living is high compared to the national average, but it might work itself out considering the tax situation. There are also cold winters and humid summers to consider.

Image Credit: Pixabay

Image Credit: Pixabay


40. OREGON

Cost of living: 18% above the U.S. average. Population: 4 million. Best city: Gold Beach. HIGHLIGHTS: Healthcare costs for a retired couple are usually 2.6% lower than the country's average. For the outdoorsy seniors, there is lots of nature to enjoy. Just make sure you do not mind the rain! You will get plenty during the eight-month rainy season. CHALLENGES: Oregon is not tax-friendly. Except for Social Security, however. Retirement income is taxed and Oregon has one of the highest state income taxes in America at 9.9%. Also, income for seniors is low, with an average of just above $45K.

Image Credit: Pixabay

Image Credit: Pixabay


39. MARYLAND

Cost of living: 17% above the U.S. average. Population: 6.0 million. Best city: Chevy Chase Village. HIGHLIGHTS: Its average household income for 65 plus individuals is the second-highest in America, an average of around $70,874. This state is home to big city Baltimore and adjacent to the sights of Washington D.C. CHALLENGES: True, people make more money here than the rest of America, but this income gets taxed massively in Maryland. Social Security is not taxed, but distributions from individual retirement accounts are. There is also an estate and inheritance tax.

Image Credit: Pixabay

Image Credit: Pixabay


38. COLORADO

Cost of living: 17% above the U.S. average. Population: 5.4 million. Best city: Colorado Springs. HIGHLIGHTS: Colorado ranks 4th in the United Health Foundation's senior health rankings. Colorado also has low rates of physical inactivity and obesity is low with its senior residents. Maybe, those in the Centennial State will also live to be 100? CHALLENGES: If you want to purchase a house in Colorado, be wary because the market is very competitive in areas like Denver. You might need to adjust to the state's high altitude, but then you will probably enjoy the pleasant weather.

Image Credit: Pixabay

Image Credit: Pixabay


37. VERMONT

Cost of living: 12% above the average in U.S. Population: 626,299. Best city: Hartford. HIGHLIGHTS: The Green Mountain State ranks high for its senior healthcare, says United Health Foundation's rankings. Nature lovers will enjoy its lush environment with numerous trees, wildlife, lakes, rivers, and scenic views. CHALLENGES:  Senator Bernie Sanders’ state of residence is considered one of the "Least Tax-Friendly" per Kiplinger. There is also a high cost of living, making it a bit tougher for low-income seniors to survive.

Image Credit: Pixabay

Image Credit: Pixabay


36. DELAWARE

Cost of living: 11% above the U.S. average. Population: 967,171. Best city: Rehoboth Beach. HIGHLIGHTS: It was rated tax-friendly by Kiplinger — Delaware does not tax Social Security benefits! It also excuses certain amounts of investment and pension income for people above 60. CHALLENGES: The cost of living is pretty high — 11% above the U.S. average, according to Kiplinger. Seniors have below U.S. average earnings, probably making it difficult to afford necessities in Delaware for some seniors.

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Image Credit: Pixabay


35. VIRGINIA

Cost of living: 7% above the average in U.S. Population: 8.3 million. Best city: Roanoke. HIGHLIGHTS: The cost of living is higher than the national average but it should balance out as incomes are also high in Virginia. Healthcare, a big issue for most retirees, is generally cheap. In addition, Social Security is not taxed and residents above 65 can deduct $12K of their income. CHALLENGES: Seniors in poverty might struggle with the above-average costs of living. There are many cool cities to check out in Virginia like Roanoke, Lexington, and Richmond, but they are not big cities like New York City or Los Angeles. Head elsewhere for big city living.

Image Credit: Pixabay

Image Credit: Pixabay


34. UTAH

Cost of living: 4% above the average in U.S. Population: 2.9 million. Best city: Salt Lake City. HIGHLIGHTS: Utah's healthcare ranks 2nd for seniors in the U.S. according to the United Health Foundation. There are also various outdoor activities to take advantage of with 5 national parks, 5 national forests, and 43 state parks. CHALLENGES: The Beehive State is not that tax-friendly for retirees. It taxes Social Security, which might worry seniors already in poverty. Utah has the third-lowest poverty rate in America for seniors. Its income levels are at the country's average, which will not help struggling retirees.

Image Credit: Pixabay

Image Credit: Pixabay


33. NEVADA

Cost of living: 4% above the average in U.S. Population: 2.8 million. Best city: Winchester. HIGHLIGHTS: Nevada has some sweet deals on taxes, for instance, no state income tax! Poverty rates for seniors are also quite low (8.4 % compared with the U.S. average of 9.4%). It is also home to Vegas! CHALLENGES: The cost of living is a bit over the country's average and temperatures can be high, ranging between 50 and 120 degrees Fahrenheit. The state's year-round semi-arid desert climate might make it the driest state in America.

Image Credit: Pixabay

Image Credit: Pixabay


32. MINNESOTA

Cost of living: 4% above the average in U.S. Population: 5.5 million. Best city: Osseo. HIGHLIGHTS: Minnesota is a good place for health-focused seniors. It is ranked as the "healthiest state in America for seniors", according to the United Health Foundation. It is also home to the popular Mayo Clinic in Rochester, Minnesota. If you have complicated health problems, this might be an excellent choice for you. CHALLENGES: It has got the not so great combination of more than average cost of living and below-average yearly income. The state also taxes Social Security as much as the Feds do. Other retirement incomes are not free from taxation either.

Image Credit: Pixabay

Image Credit: Pixabay


31. SOUTH DAKOTA

Cost of living: 4% above the average in U.S. Population: 882,235. Best city: Hot Springs, says Niche.com. HIGHLIGHTS: South Dakota earned itself a "Most Tax-Friendly" tag from Kiplinger. Apart from affordability, nature lovers might like its mountains and prairies. CHALLENGES: Make sure you can withstand blizzards and freezing weather before moving here. As with most rural states: This state is not for city lovers! No big cities to speak of and it is one of the least populated states.

Image Credit: Pixabay

Image Credit: Pixabay


30. MONTANA

Cost of living: 3% above the U.S. average. Population: 1.062 million. Best city: Glasgow. HIGHLIGHTS: Although it is cold out there, it is beautiful — Montana boasts natural wonders like Glacier and Yellowstone national parks. Kiplinger reports that it has one of the highest populations of people 65 and above. CHALLENGES: Living in this state might give retirees a hard time — Kiplinger rates it as "Not Tax-Friendly." Its income levels are below the country's average and most retirement incomes are taxed with Social Security inclusive.

Image Credit: Pixabay

Image Credit: Pixabay


29. ARIZONA

Cost of living: 3% above U.S. average. Population: 6.7 million. Best city: Green Valley. HIGHLIGHTS: Arizona has lots of sunshine and beautiful desert scenery, making it a favorite retirement destination for those sick of icy winters. It is easier to retire in than states like New York, California with its average cost of living only 3% above the country's national average. CHALLENGES: The Grand Canyon State's dry heat makes it almost unbearable in summer, with temperatures in some localities ranging from 104 to 107 degrees Fahrenheit. It is not the cheapest to live in with average household income for seniors 10.8% below the country-wide average.

Image Credit: Pixabay

Image Credit: Pixabay


28. NORTH DAKOTA

Cost of living: 1% above the U.S. average. Population: 760,077. Best city: Rugby, says Niche.com. HIGHLIGHTS: Kiplinger rates North Dakota tax-friendly for retirees (income taxes are low — 1.1 to 2.9%) and says it has a low cost of living. Its natural panoramas are absolutely breathtaking to boot! CHALLENGES: North Dakota taxes retirement income but that should not have too big of an impact on retirees since the cost of living is very low. Again, it is not the best place for city folk — its population is just 760,077.

Image Credit: Pixabay

Image Credit: Pixabay


27. FLORIDA

Cost of living: 1% above the average in U.S. Population: 19.9 million. Best city: Jacksonville. HIGHLIGHTS: Florida is probably one of the most tax-friendly states in America. Perhaps this, along with its continuous sunshine, is why Florida has the highest share of retirees in the U.S. CHALLENGES: Weather in Florida can be nasty. Heat and humidity can be a problem, and even unsafe to seniors with poor health. There is also the danger of hurricanes and severe thunder and lightning storms. Other than hurricane weather, it is pleasant and warm mostly…

Image Credit: Pixabay

Image Credit: Pixabay


26. WYOMING

Cost of living: U.S. average. Population: 577,737. Best city: Cody. HIGHLIGHTS: The Mercatus Center rated the Equality State 5th in its fiscal health — out of 50 states, that is pretty good! There is no state income tax either which makes it easy on a retiree's wallet. CHALLENGES: If you are not a nature lover and more of a city-dweller, residing in Wyoming is not for you. The state has one of the smallest populations in America at 577,737 and nary a giant cosmopolitan area in sight.

Image Credit: Pixabay

Image Credit: Pixabay


25. MAINE

Cost of living: 2% below the U.S. average. Population: 1.3 million. Best city: Portland. HIGHLIGHTS: If you love lobsters, you don't have to look far to get the good stuff. Both living and healthcare costs are below the country's average, which is good for seniors living off retirement income and savings. CHALLENGES: The tax situation here is just OK — most retirement income is taxable. But, Social Security is not taxed and estate tax only pertains to estates worth $11.8 million-plus. Income levels are not high, per Kipling. Senior households make 25.2% below the national average.

Image Credit: Pixabay

Image Credit: Pixabay


24. PENNSYLVANIA

Cost of living: 3% below the average in U.S. Population: 12.8 million. Best city: Pittsburgh. HIGHLIGHTS: Forbes tagged Pittsburgh as the best city in America to retire in. The city has a high number of doctors per capita and is quite walkable and bikeable. Generally, Pennsylvania is good to retirees with inexpensive healthcare and tax breaks. CHALLENGES: Pennsylvania is not strong in its own budget, making its future uncertain. Financially unstable states (like Kansas) might raise taxes, which could affect retirees. George Mason University rates Pennsylvania's financial health at 45 out of all 50 states.

Image Credit: Pixabay

Image Credit: Pixabay


23. WISCONSIN

Cost of living: 4% below the average in U.S. Population: 5.8 million. Best city: Madison. HIGHLIGHTS: The cost of living is cheap and there are some tax breaks for low-income inhabitants' retirement income. Cheese lovers will love being close to some of the best cheese in the country, as well as cheese curds. Yum! CHALLENGES: Wisconsin is not very tax-friendly and has the lowest household income for those 65 and above in America. Although Social Security is exempted, other retirement earnings are subject to taxation. The icing on the cake: Healthcare expenses are higher than the country's average.

Image Credit: Pixabay

Image Credit: Pixabay


22. ILLINOIS

Cost of living: 4% below the average in U.S. Population: 12.9 million. Best city: Leland Grove. HIGHLIGHTS: Illinois' financial standing has been dipping for a while. On the bright side, that implies its cost of living is below the national average perhaps making it much affordable for some retirees. CHALLENGES: However, its financial standing has put Illinois in the second-lowest ranking for fiscal soundness. Tax breaks on various retirement incomes are not assured and there are high sales taxes.

Image Credit: Pixabay

Image Credit: Pixabay


21. IDAHO

Cost of living: 5% below the average in U.S. Population: 1.6 million. Best city: Sandpoint. HIGHLIGHTS: Nature lovers will enjoy the different environments in Idaho — the rugged landscape, lakes, snow-capped mountains, and canyons. Its cost of living allows seniors to really stretch their dollar and live thrifty Golden Years. CHALLENGES: Those who fancy big city living will not have a great time in Idaho. You will need to go to a more cosmopolitan area for that kind of lifestyle! Its tax-friendliness is a mixed bag for retirees: state tax is 6% and state income tax is over 7%. However, Social Security is not taxed and there is no inheritance or estate tax.

Image Credit: Pixabay

Image Credit: Pixabay


20. NEW MEXICO

Cost of living: 5% below the average in U.S. Population: 2.095 million. Best city: Taos. HIGHLIGHTS: The drama on "Better Call Saul" and "Breaking Bad" shouldn't fool you — New Mexico is a beautiful and mostly a peaceful place to live. CHALLENGES: New Mexico's deserts and golden sunsets are lovely but not its tax situation. Kiplinger says the state is the "Least Tax-Friendly" as retirement income is taxed here. Low-income retirees might be able to get benefits, however.

Image Credit: Pixabay

Image Credit: Pixabay


19. NORTH CAROLINA

Cost of living: 5% below the average in U.S. Population: 9.9 million. Best city: Asheville. HIGHLIGHTS: This state usually has fairly mild weather throughout the year compared with most of the country. It is very lush and green, excellent for nature lovers. Most costs of living are quite low, save for the Kill Devil Hills area, and Social Security is not taxed. CHALLENGES: Although the costs of living aren't high, income levels are also low at an average of $43,616 for people 65 years and above. Social Security is not taxed but other retirement income is taxable at a flat rate of 5.9%.

Image Credit: Pixabay

Image Credit: Pixabay


18. SOUTH CAROLINA

Cost of living: 7% below the U.S. average. Population: 4.8 million. Best city: Bluffton. HIGHLIGHTS: South Carolina enjoys mild weather almost throughout the year, making it an attractive retirement destination. Another reason? It's affordable, with the cost of living 7% below the national average. With taxes being friendly to retirement earnings, you should have an easy ride. CHALLENGES: It gets pretty hot in summer and humid in this Southern state, although for the majority of the year the weather is pretty mild. Health is not the best here with high obesity levels, many smokers, and low consumption of veggies.

Image Credit: Pixabay

Image Credit: Pixabay


17. GEORGIA

Cost of living: 7% below the U.S. average. Population: 10.1 million. Best city: Athens. HIGHLIGHTS: Georgia has 2 things most people like: low living costs and warm weather. Healthcare is also cheap for retirees (6th lowest costs for couples in America). Its low state taxes are also really appealing for budget-conscious retirees. CHALLENGES: If you are keen on Southern living, ensure you are ready for Georgia's long, hot and humid summers. Many people avoid the outdoors around noon because it is way too sticky. An added nuisance: all the mosquitos!

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Image Credit: Pixabay


16. MISSOURI

Cost of living: 10% below the average in U.S. Population: 6.1 million. Best city: Columbia. HIGHLIGHTS: Missouri's low costs of living are very appealing for retirees — 10% below the country's average. Bookworms will also nerd-out about all the popular writers from the "Show Me State" like Mark Twain, Maya Angelou, T.S. Eliot, and more. CHALLENGES: It is cheap to live in Missouri but that does not help too much as household income levels are also rather low (for people above 65, it is a little over $43K). Its tax position is mixed and it has poor healthcare for retirees.

Image Credit: Pixabay

Image Credit: Pixabay


15. TEXAS

Cost of living: 10% below the average in U.S. Population: 27.0 million. Best city: San Marcos. HIGHLIGHTS: Living costs are lower than the nation's average and the average income for people 65 years of age and older is not bad. Incomes are not taxed so much in Texas, so your dollar can stretch even further. There are cool cities, as well, like Dallas and Austin. CHALLENGES: Overall, Texas is affordable except for its healthcare, a strong concern for most seniors. Texas is high in poverty, regrettably, with the 6th highest senior poverty rate in the U.S. at 10.8%.

Image Credit: Pixabay

Image Credit: Pixabay


14. LOUISIANA

Cost of living: 10% below the average in U.S. Population: 4.6 million. Best city: Baton Rouge. HIGHLIGHTS: This state has a low cost of living and lots of sights and activities to keep active retirees busy. There are the tourist and music attractions of New Orleans and Baton Rouge, renowned cuisine, and natural wonders like the swamps. CHALLENGES: Costs of living might be low, but so are incomes. The average for folks 65 years and above is $50,744. That might make it difficult to afford things like healthcare, which are 2.1% over the average costs in America.

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Image Credit: Pixabay


13. NEBRASKA

Cost of living: 12% below the average in U.S. Population: 1.9 million. Best city: O'Neill. HIGHLIGHTS: Seniors will enjoy a very low cost of living in addition to a state with good financial health. (Nebraska is ranked 6th in that category by the Mercatus Center at George Mason University). O'Neill got an "A" for retiree living per Niche.com. CHALLENGES: The cost of living is inexpensive, but it is not very tax-friendly to retirees. Sadly, most retirement income is taxable. Social Security is only exempt if you earn $43,000 or less for single filers, $58,000 for joint filers

Image Credit: Pixabay

Image Credit: Pixabay


12. TENNESSEE

Cost of living: 12% below the average in the U.S. Population: 6.5 million. Best city: Lookout Mountain. HIGHLIGHTS: Tennessee is tax-friendly to seniors. It does not levy state income taxes so your retirement income can grow further. All metro areas are very cheap in all senses, even healthcare which is usually a big worry for seniors. CHALLENGES: Summertime can be unbearable, at times reaching 92 degrees Fahrenheit in July. With the addition of some humidity, and the summer months might even get hotter. Traffic is not great in Tennessee, particularly around bigger cities Memphis and Nashville. Going out of town will entail planning and patience.

Image Credit: Pixabay

Image Credit: Pixabay


11. OHIO

Cost of living: 12% below the average in U.S. Population: 11.6 million. Best city: Bellbrook. HIGHLIGHTS: Geographically, the fact that Ohio is centrally located makes it easy to travel to either coast to see family and friends or go on vacation. The cost of living is very low at 12% below the nation's average and Social Security isn't taxed. CHALLENGES: Low costs of living and exempt Social Security is attractive, but its average household income for senior residents is not that high. Ohio might work out for you if you've got a lot of savings, otherwise, you will have to deal with the average earnings at $42,667.

Image Credit: Pixabay

Image Credit: Pixabay


10. MICHIGAN

Cost of living: 12% below the average in U.S. Population: 9.9 million. Best city: Farmington. HIGHLIGHTS: The low cost of living and low poverty rate in Michigan makes it very attractive for retirees. Also, Social Security is not taxed in Michigan. For people who love water sports, the Great Lakes will be a fun destination during Michigan's spring and summer months. CHALLENGES: Michigan is going to have a complex tax situation in a couple of years. Come 2020, individuals 67 and above must pick between deducting Social Security income or $20K of every income source for singles, $40K for couples.

Image Credit: Pixabay

Image Credit: Pixabay


9. IOWA

Cost of living: 12% below the average in U.S. Population: 3.1 million. Best city: Iowa City. HIGHLIGHTS: No state income tax on Social Security earnings and a state income tax break for pension income! Iowa City is named a "City of Literature" by UNESCO and is home to a vigorous cultural scene and prestigious university. CHALLENGES: Taxes are not easy on retirees' wallets in Iowa, though Social Security earnings are untaxed. Retirement benefits might take a hit by up to 8.98%. However, people 55 and above can be excluded from up to $6,000 of taxable retirement income.

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Image Credit: Pixabay


8. ALABAMA

Cost of living: 13% below the U.S. average. Population: 4.8 million. Best city: Orange Beach. HIGHLIGHTS: Head down to the Heart of Dixie where it's budget-friendly. Most spend 4.4% less than the average retired couple on healthcare, income taxes are from 2 to 5%, and Social Security benefits are exempted. CHALLENGES: Storms can get intense in spring and November, with a lot of rain and thunderstorms. Like most Southern states, Alabama will be very hot during the summer. When choosing a place to live, consider how southern Alabama is warmer than the North.

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Image Credit: Pixabay


7. KANSAS

Cost of living: 14% below average. Population: 2.9 million. Best city: Eureka. HIGHLIGHTS: The cost of living is quite low in the Sunflower State, which might persuade you that there is no place like home in Kansas. Its scenic plains and prairies are also interesting to any nature lovers out there. CHALLENGES: Kansas is not in the best financial shape so it is raising its taxes to cope with its budget deficit. Most retirement earnings, including Social Security, will be subject to state taxes with rates from 3.1 to 5.7%.

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Image Credit: Pixabay


6. KENTUCKY

Cost of living: 14% below average. Population: 4.4 million. Best city: Lexington. HIGHLIGHTS: Welcome to the Bluegrass State, where seniors can enjoy low costs of living and a high number of tax-exempts. Social Security and $41,110 of other earnings are excluded from taxes. However, it is not the healthiest place for senior folks. CHALLENGES: Senior health cost is not cheaper than other states — it is about at the average of the country. It also ranks poorly in senior health, with high rates of physical inactivity, smoking, and poverty. There is also a low number of good nursing homes to care for retirees.

Image Credit: Pixabay

Image Credit: Pixabay


5. MISSISSIPPI

Cost of living: 15% below the average in U.S. Population: 3.0 million. Best city: Hide-A-Way Lake. HIGHLIGHTS: Senior folks might like Mississippi's sweet tax breaks and low costs on a daily basis. All Social Security, distributions from IRAs and 401Ks, and other retirement earnings won't be subject to taxes. Also, those property taxes are the least in the country. CHALLENGES: While Mississippi taxes and costs of living are easy on the wallet, the state ranks last for senior health as per the United Health Foundation. Mississippi also has the worst poverty rate in the country for seniors — 13.4%.

Image Credit: Pixabay

Image Credit: Pixabay


4. INDIANA

Cost of living: 15% below the average in U.S. Population: 6.6 million. Best city: Meridian Hills. HIGHLIGHTS: Indiana's cost of living is 15% below the national average, implying that everyday expenses like food, gas, housing, etc, are cheaper. These things are sure to take a hit on your purse in places like Hawaii and California. CHALLENGES: The state of Indiana is best for retirees with lots of savings as its yearly income is below the country's average (21.4% below to be precise) and retirement earnings, other than Social Security, is taxable at regular rates.

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Image Credit: Pixabay


3. OKLAHOMA

Cost of living: 16% below the average in U.S. Population: 3.9 million. Best city: Nichols Hills. HIGHLIGHTS: Low costs of living will most benefit those that have good retirement savings. The state is also one that doesn't tax Social Security and up to $10K can be excluded from retirement income. This helps considering average incomes are low. CHALLENGES: Oklahoma ranks third-worst for retiree health. Not just are there high levels of smoking and physical inactivity, but there is also a lack of geriatric care and high-grade nursing homes available to treat all the health issues.

Image Credit: Pixabay

Image Credit: Pixabay


2. WEST VIRGINIA

Cost of living: 17% below the U.S. average. Population: 1.806 million. Best city: Lewisburg, says Niche.com. HIGHLIGHTS: Its cost of living is not too bad, at 17% below the U.S. average. West Virginia is known for its spectacular views, rich history, grand resorts, and more. CHALLENGES: Kiplinger reports that the Mountain State is not tax-friendly to retirees and ranks low for its financial soundness, per the Mercatus Center at George Mason University. West Virginia also has poor healthcare for people above 65.

Image Credit: Pixabay

Image Credit: Pixabay


1. ARKANSAS

Cost of living: 17% below the U.S. average. Population: 3.0 million. Best city: Bella Vista. HIGHLIGHTS: A really low cost of living in the Natural State, as well as average health charges being the 3rd lowest for retired couples. Arkansas is recognized for its wildlife, hot springs, mountains, and rivers — hence the name the "Natural State." CHALLENGES: The state taxes are not that easy on your pocket. Social Security benefits and about $6,000 of other retirement earnings are exempted. Income tax rates can hit 6.9% if the income is over $75,000. Poverty rates in Arkansas for retirees are the 8th highest in America. Also, this Southern state is not the place to be for those who like big city living!

Image Credit: Pixabay

Image Credit: Pixabay

As we can see, the best states for seniors have a combination of good healthcare options, low costs of living, and low taxes. Some states might have excellent weather or lots to do but not great areas to live out your Golden Years. In your opinion, which state do you consider to be the best state for retirees and why? Do you agree with our rankings of best states for folks above 65? Tell us your views in the comments section and don't forget to share this article with your friends.

Source: Finance101

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