October 5 – 2010 Editors Note: This is the second in our series comparing various states as retirement destinations. Don’t miss the first one, Florida vs. Arizona Retirement, or the third, Dueling Carolinas: NC vs. SC. We welcome ideas for future comparisons.
In our previous retirement shoot-out we compared 2 states, Arizona and Florida, that are natural rivals but geographically quite distant. In this comparison we will compare 4 states that are very close geographically but have some other important differences.
Our approach here is to evaluate various factors for each state, letting our readers draw their own conclusions from the facts. As always, reader input is extremely important. We encourage you to use the Comments section below to tell your stories and express your preferences.
Population (Data from American Fact Finder-U.S. Census Bureau).
With the exception of tiny Delaware, all 4 of these states have fairly high populations. Maryland’s population is 5,476,100 with 11.8% of its population over 65. New Jersey has 8,462,300 residents; 13.1% are over 65. Virginia has a population of 7,449,200 with 11.8% over 65. Delaware’s population is by far the smallest at 837,700, but it has the highest proportion of residents over 65 (13.7%). These states attract most of their retirees from within their own borders or the northeast.
Economics and Home Prices.
All 4 states have higher home prices than the national 2006-2008 median of $192,400 (Census Bureau) or the Zillow 2010 median of $182,200. The national household income median was $52,175 in 2006-8. Of the 4 states compared here, Delaware has the lowest home prices and household income.
Delaware’s median home value in 2006-2008 was $239,700 (Census Bureau). Delaware is the only 1 of these 4 states where home values appear to have increased in the past few years. According to the Zillow Home Value Index the value of a home there had increased to $262,500 in 2010. DE household income is $57,270.
Maryland’s 2006-8 home value was $340,900 (Census Bureau), declining significantly to $246,400 in 2010 (Zillow). HH income was $70,000.
New Jersey’s 2006-8 home value was $367,600, declining $80,000 to $287,000 by late 2010 (Zillow). Median HH income was $69,674.
Virginia homes had a 2006-8 median value of $259,200 in 2006-8, according to the Census Bureau. That value declined slightly by 2010 to $231,800 (Zillow). HH income was $61,044.
There are no significant differences between these 4 states are far as climate goes. New Jersey has the coldest winters, but only by a few degrees.
State (City) Avg. July High Avg Jan Low
Delaware (Dover) 87 27
Maryland (Baltimore) 91 29
New Jersey (Trenton) 85 21
Virginia (Richmond) 88 28
Delaware is by far the most tax-friendly state for retirees among this group. Delaware is ranked as having the 24th highest tax burden in the nation. It has no sales tax. It does have several pieces of good news for retirees: it is the 43rd highest for per capita property taxes; social security income is not taxed; and $12,500 of pension income is not taxed. DE does have an estate tax.
Maryland is a high tax state with the 4th highest tax burden in the nation, according to the Tax Foundation. It has a top income tax rate of 6.25%; sales tax is 6%. On the plus side for retirees, it is the 26th highest for property taxes, and does not tax social security. MD and NJ are among the few states that have both an estate and an inheritance tax.
New Jersey has the dubious distinction of being the #1 highest state for state/local taxes, according to the Tax Foundation. Its top income tax rate is 8.97%; sales tax is 7%. Particularly hurtful for retirees, NJ has the highest per-capita property taxes in the nation. Fortunately, social security is not taxed. It has both an estate tax and an inheritance tax.
Virginia could be considered tax-friendly, at least compared to NJ and MD. It has the 18th highest state/local tax burden. The top income tax rate is a relatively modest 5.75%; sales tax is 5% (plus localities must collect an additional 1%). It is ranked 18th highest in per capita property taxes. Social security is not taxed, nor are there any inheritance or estate taxes.
Physical Environment and Diversity
All 4 of these states are approximately the same from a geographic basis. All have a long coast line and/or waterfront on large bays. All are close to major cities in the Northeast. Virginia is the most distinctive and diverse of the 4, thanks to the mountains in its western half,
Places to Live
All 4 states have at least one important city, and all offer wide choices of college towns or livable small towns. Ironically, Delaware, by far the smallest state in terms of population, has the most number of towns on Topretirements’ list of 100 Best Retirement Towns (3). Those include Rehoboth Beach, Lewes, and Smyrna. Virginia has 2 towns on the list, Charlottesville (#13) and Williamsburg.
Choice of Active Communities
Virginia and New Jersey seem to have the widest variety of active adult communities. At Topretirements we count 21 communities in our Delaware Directory of Active Communities, 16 in our Maryland Directory, 41 in the New Jersey Directory, and 38 in the Virginia Directory of Active Communities.
Based only on the number of towns making the Topretirements’ list of 100 Best Retirement Towns, one could conclude that Delaware and Virginia are the most popular states for retirement among these 4. Delaware’s low tax environment is certainly a big reason for its popularity. New Jersey, as expensive as it is, does have many, many retirees living there and some attractive retirement towns like Princeton and those on the South Jersey shore (such as Toms River and Brick). In our opinion Maryland is an under-rated retirement destination. It might have high taxes, but it does have many charming and historic towns like Annapolis, Chestertown, and Leonardtown that make great retirement spots.
Aesthetics and Intangibles
All of these states have their admirers and each has its detractors. But all of them contain some wonderful places to retire, if the mid-Atlantic region is the region where you would like to retire. Rather than take sides on the issue, we recommend that you visit cities and towns in these states and see if you can’t find the place of your dreams. The region is not that big – in a few trips you should be able to get a good idea of the places that could offer you a happy retirement experience.
For your reference:
State Retirement Guides
Gulf Coast Retirement: Sun, Tax-friendly, and a Lower Coast of Living
Retirement 101 Mid-Atlantic States: MD, DE, VA, NJ
Florida Retirement 101
Dueling Carolinas: NC vs. SC
Dueling States: Arizona vs. Florida
California Retirement 101
Retirement in the Southwest: AZ, NM, and Utah
The Mountain States: CO, ID, MT, NV, UT, WY
The Pacific Northwest: Oregon vs. Washington
What state do you prefer? Let us know in the comments section below.