4 Reasons Why Not to Retire in These 7 States

Category: Financial and taxes in retirement

February 15, 2009 – You have probably read about the problems Greece is having with its unmanageable debt these days. Well if you thought that sort of problem couldn’t effect you as a retiree in the good old USA, think again. A recent article, These 7 States are Headed for Something Worse, by Gregor Macdonald at Seeking Alpha makes a good case with 4 different reasons why 7 U.S. states are NOT the best place to retire. His conclusions are quite similar to what Topretirements reported on back in November (see links at end of article).

While Mr. McMacdonald’s piece was not specifically directed at retirement decisions, we think it is relevant. Here are the 4 reasons why he thinks these 7 states are in trouble:
1. All of the states on his list have large populations (at least 8 million people)
2. They are borrowing heavily,at least 1 billion dollars, to pay unfunded unemployment insurance claims
3. Each state has at least 15% underemployment
4. All are net importers of energy

The 7 states on his list are:
New Jersey
North Carolina

So what does this mean to these states? Macdonald makes the point that all 7 states are being squeezed very hard, with no great resolution in sight. Real wage growth is stagnant or going backward. According to Macdonald, all “…seven states are squeezed hard at both ends: no wage growth at the top, and no relief through cheaper energy costs at the bottom.” The result – taxes will have to go up, interest costs on borrowing will increase, and services will decline. The spiral might get worse as residents get fed up and move elsewhere.

Is This Relevant to You as a Retiree?
For you as a potential retiree the impact of these states’ financial predicament might not be quite as bad. if you are retired, you probably don’t have to worry about being unemployed. You might have to pay higher taxes – if you have taxable income. You do have to be worried about cuts in services, as well as subsequent taxpayer revolts. And certainly it’s not much fun to live in a place where the news is bad and the economy is depressed.

We should note that Texas could have qualified for this list. But Macdonald took it off because it is a net energy exporter (not importer as erroneous first version stated) and thus doesn’t face quite as much pressure.

What do you think? Does his argument make sense to you, or could it affect your decision? Comment in the section below and let us know.

For further reference:
What are the most popular states for retirement
Be Careful about worst states to retire
“Best States to Die In”

Author Comment:
This article has stirred up the biggest controversy of any we have ever written. We view that as a very good thing, since it shows that people are thinking and expressing their opinions. The part of the article that was the most controversial was that North Carolina and Florida made both this “states to avoid” list and Topretirements’ “best” list, which is more accurately a “most popular” list. The fact is that these 2 states are such popular retirement destinations that even the most serious financial problems might not affect retirees’ plans to retire there.

The good news for Florida is that it has cut expenses in the face of declining revenues. Whether other states can do that is another matter – some are in worse shape than others. As other commenters noted, we also wonder why states like Oregon or New York didn’t make the list. The Pew Center’s report, “Beyond California“, offers a more thorough review of states in trouble, and we highly recommend it. Their list has 10 states on it, but does not include 2 states on Macdonald’s list – North Carolina and Ohio.

Retirees don’t have to be as concerned about the financial health of their state as do younger workers. Retirees usually don’t pay that many taxes, and it is the younger people who are going to have to struggle with future debts. Lastly, some readers were concerned that Macdonald was trashing every city in the state (e.g.; Asheville). NC might have economic woes, but that doesn’t mean all of the cities within it will be all that affected. Asheville remains the most popular retirement destination, and for good reason.
Everyone, thanks for the wonderful, spirited comments! John Brady

Posted by John Brady on February 15th, 2010


  1. I suspect the author erred in the next to the last paragraph where he indicates, “But Macdonald took it off because it is a net energy importer and thus doesn’t face quite as much pressure.” but meant to say that Texas is a net energy EXPORTER.

    by Mac — February 16, 2010

  2. :???:if north carolina is one of seven states not to retire to, why is it that you list ashville as a top retirement city?????

    by ed antonini — February 16, 2010

  3. In the article “What are the Best States for Retirement” (linked at the bottom of the page, Florida, North Carolina, California and Texas are listed. So which article is accurate?

    by Tom Tokar — February 17, 2010

  4. I second Ed Antonini’s comment. We are within a year of retirement and have been looking intensely at houses around Asheville.

    by Steve Soderberg — February 17, 2010

  5. During this economy we all need help and not writers making things worse by negitive coments. Writers like this help “put the nail in the coffin” regarding the economy of thes states. As a retirment newesleter I am very diapointed in your website and will tell all my fellow retires not to log anymore since you are as bad as this writer

    by jerry greenstein — February 17, 2010

  6. I have news for these people…my hubby and many former New Jerseyites are moving back to NJ!
    We’ve lived in the South and it’s not “home” to us.
    Watch the stats…more folks are moving BACK HOME.

    by Pammy — February 17, 2010

  7. I’d like to know how Texas could have qualified for the list when the Texas economy has been sited by Forbes.com as the strongest in the nation and they also listed several Texas cities as the best in the nation for jobs. The PEW Center on the States even listed Texas as one of the few states least like California for state fiscal peril.

    by SG Barron — February 17, 2010

  8. I can see why New Jersey is on his (not a place to go)list. I live here and the taxes never, ever stop going up. Small stores/shops are closing continuously and the home prices are in decline. It is funny how we are on the list for one of the top ten places to retire. Retirees cannot afford the HIGH taxes and Jersey is Number one in the country know for it’s taxes.

    by Ari — February 17, 2010

  9. 😕 You can’t have it both ways…either North Carolina is a good place to retire to or a bad place. Which is it? Sounds like typical corporate BS. You’ve lost me as a subscriber.

    by Robert — February 17, 2010

  10. I would like to say that this article is quite useless!! As a few readers already pointed out,…the states listed here among the worst like N.Carolina and Florida are quite questionable. They are still among the most popular retirement destinations. The Carolinas especially have surplanted Florida as the main retirement destination of baby boomers and is considered by many to be one of the better states to retire to. I think the criteria and ersatz facts used by the writer needs to be re-evaluated and examined in a more sensible context. As another matter, New York should also be right up there with New Jersey as one of the costliest States to retire in unless you live in rural areas of both of these states. Like I said, the article is pretty much useless in my opinion.

    by Artie — February 17, 2010

  11. Thinking of California. Surprised Oregon is not included as worst (where I am now) as citizens just passed MAJOR increase in Income tax (3rd highest in 50 states. Nike founder talking of moving ENTIRE company to Idaho = 27,000 lost jobs just with Nike employees which affects 100,000+ others INTEL and HP have stopped future R&D expansion due to new law. Unemployment at 12%+ now and could with NIKE, INTEL and HP gone jump to 20% +. Re think the list… not really accurate from othe rinformation on the internet. Think your source needs to do MORE Homework

    by Lee G — February 18, 2010

  12. California has a 12 (some say 15)% unemployment rate. They are first in gas taxes, sales taxes and vehicle taxes. We’re Billions in the hole and I’m guessing more taxes and lack of services will increase. I was born here and right now I’m disgusted on how it’s been run into the ground.

    by rcmckoy — February 18, 2010

  13. Hi,
    Thank you for publishing coments on Macdonald’s article including my coment. I take back what I said about not looking at your website anymore. Since you showed courgae in facing our “outrage”. I now have new found respect for your website and publisher.

    by jerry greenstein — February 20, 2010

  14. Thanks Jerry, you are very kind. Appreciate the 2nd chance!

    by John Brady — February 20, 2010

  15. Florida could double it’s taxes and still cost less to live in than many northern states for one simple reason WINTER.

    by Will Harris — February 20, 2010

  16. I was wondering why New York wasn’t on the list. A few years ago they destroyed a brand new multi million dollar nuclear reactor in I believe Long Island so they couldn’t change their mind and use it in the future.

    by J T Fischer — February 24, 2010

  17. How would I find out if a state is financially healthy? I found it ironic that a follow on article talks about retirement friendly states (usually because they don’t tax retirement) and three of them are on the list of 7 who are in bad shape financially, Fla, NC and Cal. We are looking at PA and DE. I’d hate to move from Jersey to one of these places and find out it too is about to go belly up. So where/what to look for to check a states financial health.–
    Comment from Topretirements editor: Try the Pew Center for the States. they have a map and you
    click on any state for more info http://www.pewcenteronthestates.org/

    also, try searching for organizations like the National Governors Association.

    by Ann — February 24, 2010

  18. My husband and I are both retired from the Military and currently living in NC. We will be leaving in the summer of 2011. Although NC doesn’t tax our Military retirement, the county that we live in has raised property taxes the last two years. Also, because we will close to the coast, our insurance premieums are through the roof. The area we live in has the youngest population, due to the military, which drives up our auto insurance rates on our children.
    We are exploring all areas to relocate, but are it is close to the West Coast (Not Cali), so that we can be closer to our family.

    by Connie — February 26, 2010

  19. I understnd completely the two sides of moving to North Carolina. I moved here several years ago and wanted to build my small retirement home. Construction costs here are unbelieveable mainly because it takes several times to do it,tear out and then that out and do it again then again. Our costs are now at $350 per foot and we are not finished – about double what the builder and architect said and what we had budgeted. It seems that workmen here just don’t know what they are doing and don’t care. Something like a Katrina event. Too much building has led to very poor workmanship and extreme costs often around $1000 perday per worker. They don’t have to worry because there’s always somebody else waiting. Existing houses with serious problems are being fluffed and put on the market. Medical and dental is poor and has caused many trips to Atlanta just for the basics. Local and state government also has grown accustomed to unlimited tax payments which are the highest of any place we have ever lived. Property taxes just get bumped rather than an analysis of cost cutting or waste. Growth stays out of control to generate the dollars lowering the quality of life and services.
    On the other hand, it is beautiful. The weather is not as moderate as we were told but OK. There are beautiful mountains and lakes. Some activities in Asheville but not much anywhere else.
    If we had known, we would not be here.

    by Susan — March 9, 2010

  20. :sad: We are looking to get out of NJ when we retire, the property taxes are TOO high. We just want a little nice retirement community without all the fancy tennis courts,golf courses,pools,club houses and etc that drive up the cost of the yearly association fee. We would like to live in a nice SAFE area that doesn’t cost an arm and a leg. Living on a fixed income is not easy. Any suggestions?

    by Cindy — March 10, 2010

  21. […] further reference: 7 States to Avoid Most Tax-Friendly States What do you think? Please use the comments section below to give us your […]

    by » Best States to Die In (but it’s not a good year to do it anywhere) Topretirements — March 15, 2010

  22. I agree with Ari, I have a friend, he’s nearing his senior age and is currently planning for his retirement and told me that he won’t go for New Jersey- a definitely not to go list. The way of living is somewhat expensive for it’s taxes.


    by Rustom Smith — March 19, 2010

  23. We live in SE Tenn bordering NC and GA. We hear more panic stories from Georgia than from NC. Most of states are hurting but seems to me that the author didn’t get ALL the facts together.

    I also agree with Pammy – a lot of people are moving back to where they came from. If my husband wasn’t gainfully employed right now, we’d be going back north too! Sure, taxes are less in the south but, you get what you pay for!

    by Holly — March 20, 2010

  24. March 30 – See NY Times article – “Payback Time- State Debt Woes Grow Too Big to Camouflage” http://www.nytimes.com/2010/03/30/business/economy/30states.html

    by John Brady — March 30, 2010

  25. my wife and i are about to make the leap into retirement. currently in California and desperate to leave, after 30 years. have to agree that California is not a good place to retire. the elected leaders have ruined this state with unbelievable thinking. we are going to wander down the road, in search for the new paradise. no place is perfect, but old traditions and friendly people do exist out there, somewhere, we just have to keep our faith up and our eyes open. call us gypsies if you like, but we are leaving with a clear vision for the future.

    by david huckabee — April 11, 2010

  26. I’m in Raleigh NC. Don’t know where Susan is but if she is building and they keep having to tear out and do again I have serious doubts about who she is hiring or dealing with. As far as medical and dental NC is far and above anything I had in a decade in Atlanta. UNC and Duke medical is superior in the nation. My home here in NC is much better quality than mine was in GA.
    I think she probably just needs to move back to Atlanta. I’m still working at 63, walk to my office about 1/2 mile from my home. No 90 minutes sitting on interstates twice a day. I can be in downtown Raleigh in under 15 minutes or the deep woods around Falls Lake in five. There’s nothing wrong with NC.

    by Thomas — May 1, 2010

  27. […] further reference: North Carolina Retirement Guide Florida Retirement Guide 7 States to Avoid Where are Baby Boomers Retiring Tax Friendly States for Retirement Posted by John Brady on May […]

    by » How North Carolina Climbed over Florida as Favorite Retirement State Topretirements — May 4, 2010

  28. […] top 5 blog stories so far in 2010: Sunbelt Shines on the 100 Best Places to Retire List for 2010 7 Reasons Not to Retire in These 4 States With Some States in Trouble, Be Careful Where You Retire Top 10 Tax-Friendly Towns What Are the […]

    by » The Best of the Best Places to Retire Topretirements — May 18, 2010

  29. Michigan one of the worst, eh?
    Great, less people for us to deal with, less crowds, and way less traffic.
    If you’ve never been to our blue lakes, our sparkling rivers, and our “Up North” ambience, well, that’s your problem!
    Michigan is not Detroit!

    by Marge — May 19, 2010

  30. Phoenix is listed as a good place to live, but Arizona needs to be added to the list of 7 Worst states. I am retired there now, and I’m looking to move as soon as my husband retires. Our state tax was just raised to 9.1%. It’s supposed to be temporary for 3 years, but the same night the raise was voted in, the legislature was saying that it may not go away. Backpeddling before all the votes were counted. I predict that in 3 more years, it will be up to 10+%. Social Security and retirement pay are taxed. We were at the top of the U.S. list for hit and run accidents and car thefts. Illegal immigrants and drugs are pouring over the border like the oil into the Gulf of Mexico. This is no longer a good place to be. Live here at your own risk. It’s getting way too expensive for retirement living unless you are very wealthy.

    by Scottie — May 22, 2010

  31. #1. 4 out of 7 are in the snow belt! live in Illinois and if you dont have family here it would be a huge stretch to imagine why you would want to Retire here.
    #2. I dispute the statement that Florida imports vast amounts of electrical power..BUT remeber many states work in cooperation on Electrical supply / The building of Power Houses..
    Susan… I am sad to hear about your cost to build BUT I am not surprised at all. Its become common where Greedy Contractors attempt to use unskilled and or..Untrained workers to perform a job that does require skill knowledge and training..

    by Richard — November 15, 2010

  32. Nice post! Keep it up. 😉

    by Flash Animations — November 25, 2010

  33. I lived in NJ and SC and both are high in taxes. SC has property tax on everything and when you renew your car registration they charge you a playground tax and you pay it or you don’t get your car registered.

    by Just me — January 15, 2011

  34. Georgia is Ok place to retire. I lived in 15 places before moving to the suburbs of Atlanta. The state has issues but they do not tax SSI or pension up to $ 35,000 a year. North Carolina was option # 2, but as with new constructon along the cost was very expensive and homeowners insurance was really expensive.

    by Emmitt the Chow — March 29, 2011

  35. Any of you folks who want to buy a small farm with small cedar log cabin in Western Kentucky can give me a call. I love the place, but want to move closer to children. 60 acres, 45 woods, 12 acre corn income, deer lease income, pond, shed, wild turkey, rabbits, squirrels, great neighbors and probably less money to buy than where you are! Between Paris Tenn., Murray Ky., Paducah Ky. A wonderful place to retire. Good luck. Teresa:lol:

    by Teresa — March 29, 2011

  36. Avoid California at all costs. We really just want to keep it to ourselves.

    by Alan — April 16, 2011

  37. Fifteen months ago hubby and I moved to Rancho Mirage, CA from Northern VA.
    Alan, I would gladly move back East at any time and leave CA for you. We moved here to be close to family in Laguna. Riverside County is dirt poor, has very high unemployment rates, and is downright boring unless one is into chasing balls all day. We have always lived in HOA communities with few if any problems. This is a gated (terrible idea) non age controlled community with a high number of snowbirds and rental homes. The gates do nothing for security but they do provide the sense of exclusivity that the good folks of So. CA so desire. I’d gladly shovel snow in order to live where people actully care for their own homes and not have to hire someone every time they sneeze. :sad:

    by Diane — April 18, 2011

  38. Love the article and all the comments. I am a lifelong southern Californian looking to get out so my teenage children have a chance at a decent life. There is no possibility of that anymore in beautiful CA. So sad to watch it implode.

    by Leigh — June 3, 2011

  39. :smile:cindi,
    Check out Moscow, ID 2 colleges 8 miles on the state line, little crime and no natural disasters…economy is good.

    by Bel — June 8, 2011

  40. Oregon has high property taxes, hard for retirees. The joke to remain in your home.
    Central Oregon cold in winter and hot in summer. Plan to sell and move elsewhere.

    by d. Pfeiffer — May 22, 2015

  41. While this post may not surprise many or may not apply to many who read it, I am going to list one reason why retiring in PA may not be a good idea. While the state has tax laws favorable to retirees (at present, does not tax social security or retirement — annuities/pensions–), it is one of two filial law states in the US; South Dakota is the other, I think. What does that mean for a retiree? If you exhaust your funds, have to go on Medicaid, etc. such as having to pay for a nursing home (even nursing home benefits are limited and sometimes difficult to get), PA/Medicaid will sue your children to get repayment. If your child returns to live in your home and care for you, that home may be sold out from under the child if neither you nor your spouse lives in it and the proceeds used to pay for your care. When there is no more to get from your estate, then your child or children very well may be sued for the balance. This is documented. Just google PA Filial Law. There are two elder law firms that discuss the implications. see: http://witf.vo.llnwd.net/o35/smarttalk/radiosmarttalk/RST_June122012.mp3; see: Elder Law in Pennsylvania (Jeffrey Marshall, ed., 3d ed. 2011), published by the Pennsylvania Bar Institute. See: University of Illinois School of Law’s Elder Law Journal for its Fall, 2012 issue, is entitled Filial Support Laws in the Modern Era: Domestic and International Comparison of Enforcement Practices for Laws Requiring Adult Children to Support Indigent Parents. That academic paper (Abstract No. 2079753) can be downloaded from the Social Science Research Network (SSRN) free (32 pages, PDF); See In Health Care & Retirement Corporation of America v. Pittas, the nursing home obtained a judgment against an adult son for the cost of his mother’s care with neither a contractual obligation nor “fault” on the son’s part. I am not an attorney nor do I work for any. Just an ordinary daughter caring for parents in their home in PA. This is a law that must be overturned. If you live in PA, please let others know about it. If you do not, and decide not to locate in PA to retire, let the governor and board of tourism know your reason. I am contemplating moving out of state as soon as I can, and I hope my parents will come with me to my other home in another state.

    by Jill — May 23, 2015

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