October 18, 2021 – Editors Note: This is part of our series comparing various states as places to retire, such as “Dueling Carolinas: NC vs. SC for Retirement“. There is a list of all of “Dueling” comparisons at the end of this article. We welcome ideas for future ones.
Not everybody heads to the Sunbelt once they hit retirement age. Many people don’t mind cold weather, and they love the idea of being in a state with mountains and a beautiful natural environment. Maine, New Hampshire, and Vermont are extremely popular choices that fit that bill; each state has many admirers. Many snowbirds live in these northern New England states and get the best of both worlds by heading south in the winter (and a few people do the reverse).
This article will first compare some basic facts about retirement in each state. In Part 2 you will see the actual (slightly edited for space) words of Topretirements Members who have lived or retired in each state, so you see what they are like straight from the horse’s mouth. Concerning those comments, we got a big surprise using a new tool that allowed us to see which states were mentioned the most. We assumed the most popular state in the comments would be New Hampshire, which has a reputation for being tax-friendly. To our surprise, Maine, with 287 mentions, was overwhelmingly the most discussed. Vermont had 69, and New Hampshire came in last with 56. When we looked at readership of other Topretirements pages by state, Maine came out on top there too – a lot of people are intrigued by it. So much our popularity predictions!
Part 1 – Facts about these states
Population and size (Data from American Fact Finder-U.S. Census Bureau).
At 1.3 million, Maine and New Hampshire have essentially the same size population, double that of Vermont’s 623,000. At 21%, Maine’s population aged 65 or over is the oldest by a slight margin over NH and VT. Maine has almost 4 times the land area of Vermont and New Hampshire.
Home Prices and the Economy
The October Zillow 2021 Home Value Index shows that NH has the highest priced homes in the region at $381,000. Vermont and Maine have very similar Indexes at $308,000 and $318,000 respectively. By comparison, the overall U.S. Zillow Index is $303,000. All three markets have seen rapid price increases since 2020.
The economies of all these states are very similar, although NH is more prosperous. Median HH income there is almost $77,000, almost $20,000 higher than in Maine and $15,000 higher than Vermont’s. Maine and Vermont’s economies rely on tourism more heavily than does New Hampshire.
There are no significant climate differences between these 3 states – winters are cold and summers beautiful but relatively short. All three have many beautiful lakes and mountains for boating, hiking, and skiing. New Hampshire is famous for its mountains, having 48 of them with an elevation of over 4,000 ft. (it is a thing to hike all of them). Maine features the northern end of the Appalachian Trail. One big difference among the states is that Maine has a huge, 3,500 mile coastline with 3,000 islands just off the coast.
Many retirees look to taxes to determine a retirement friendly state. New Hampshire is the most tax friendly of the three, mainly because it only taxes interest and dividends, and has no state sales tax. On the other hand, property taxes are higher there.
New Hampshire does not tax wages, although it does tax interest and dividend income. Maine has a beginning income tax rate of 5.8%, going to 7.15% in the highest bracket. Vermont’s lowest bracket is 3.35% and rises to a maximum of 8.75% for incomes over $204,000.
Social Security and Income Tax Exemptions for Seniors
NH and Maine do not tax Social Security, while Vermont does.
New Hampshire has no general sales tax, although restaurant meals and car rentals are taxed at 9%. Maine has a sales tax of 5.5%; city and local jurisdictions do not tax. Vermont has a sales tax rate of 6%; local jurisdictions can add 1%.
Estate and Inheritance Taxes
Maine and Vermont have estate taxes, NH does not.
NH has the highest property taxes of the three, helping to make up for its lack of sales and income taxes. Residents paid $5,768 in median property tax in a recent year (2.05% effective rate) , compared to Maine at $2,597 (1.3%) and $4,340 (1.86% in Vermont).
Note: Taxes are complicated and the laws change quickly. Consult state Department of Revenue Guides and/or your tax professional before making important decisions. This brief overview is not meant to be comprehensive.
Part 2: Comments about these states by Topretirements Members
Having lived all over – we too felt this was “our time” and we finally got to choose where we wanted to go. We landed in Maine – just outside of Portland – with TONS of stuff to do, great medical care and cooler weather. WE love it! So as not to be a burden as we age out, we’re touring various Retirement Communities (CCRC) and are on two wait-lists. This way no one HAS to get on a plane every time we get a cold. It can be done! Do I miss them? Yes, but I am so happy to be in my dream spot.That said, I will sing the praises of Maine. Yes, house prices are crazy, even here but the people are considerate and kind and the town offers many services. Education is important and the whole town encourages the kids! I’ve seen a lot of road work this summer, even ours, so they are maintaining the infrastructure. Medical has been superb! Since 2018, we have only waited past our appointment time, to see a Dr. – ONE TIME! …and they apologized profusely. … HEF
But also high on that list is our present location of Portland, Maine. Portland is among my favorite cities, and the house we’ve lived in for many years is pretty much perfect for retirement. It’s a great place to come home to after traveling overseas for period of weeks or months, as is our plan for the future. We don’t have hurricanes, tornadoes, earthquakes, or wild fires, and the winter snow storms are easy to deal with if have a guy to plow the driveway. Needless to say, we’re still undecided, but for the time-being Maine’s not a bad place to be…. MK Huhtala
We moved from TN to Maine – yes, we have some income tax here now but not on Soc. Sec. and yes, property taxes are higher BUT sometimes you get what you pay for. We have excellent services, a large and active (pre-Covid) senior & kid’s programs, a working library for free (we had to pay to join in TN) and a cooler climate. Medical is superior too. In other ways, costs are less than TN. Taxes are everywhere!… Flatearth6
We lived just south of Portland Maine for 38 years and 4 years ago, we retired to Beaufort SC. We are not snow birds but we do an extended trip during August or September back to the New England area, including Maine. We do miss the fresh sea breezes that Maine offers during the short summer months of July through Early September, but the cold winter months last from mid October through April. Spring is non existent – it is known as mud season there due to the massive snow melt. Fall is glorious but brief. We could not imagine aging in place in Maine – yes, the roads are plowed, but a good coating of ice remains and walking is treacherous giving new meaning to slip and fall accidents. We love the warm sunshine in SC vs. the gray cold days in Maine! If fair weather is important to you, cross Maine off your list.. Sandyz
Vermont’s summers are not dissimilar to those in the Carolina mountains but whose winters are cold and snowy. For Floridians and other “snowbirds” who can afford it, a 2nd home in a state like Vermont would be a perfect counterpoint to beastly hot summers in the South and Southwest. For those who can’t afford two homes, I suspect that in our children’s lifetimes — my two are around 30 now — places like Vermont may become the new year-round retirement hot spots as seas continue to rise, warmer weather predominates everywhere and hurricanes continue to savage the east coast and its major cities. (Yes, I believe in science and facts.). There is another related issue; we all may continue to live in a constant state of pandemic awareness, a fact that could cause many of the people who have left the big cities temporarily to relocate permanently and others to join them. Vermont, which has an unusually workable political climate — a Republican governor and progressive state legislature, lots of hunters and lots of environmental liberals who seem to live together in harmony — also has the best performing numbers against the pandemic of all the 50 states. It is expensive to live in Vermont, but in most ways, you get what you pay for. Of course, if you buy into the largely mythic notion that it is much cheaper to live in a no-income-tax state, New Hampshire has nice mountains and lakes too…… Larry
Move? Yes that is an option but I happen to love New England/Vermont, most of my family is here & I enjoy the country space my house affords me. Yes our winters seem to last forever, but once retired most times you can pick the day(s) you go out. Worse case, put on your snowshoes & head out!! Maine is a beautiful state. I live in Vermont & as you say it is beautiful, but very expensive, no tax breaks etc. It isn’t what I call walk able unless you live in the Burlington or larger areas but Burlington is very very expensive – if you can find housing it is very high/high property taxes. But the bus system is getting popular & spreading to various place one wants to go. We do have some excellent hospitals. NH is very nice also & better on taxes though their property is high to make up for no State income or sales taxes….. VT Retiree
I live in Vermont & it is very highly taxed (one of the highest), retirees get very little breaks. I love the beauty & quiet of my state though the winters can last too long, but the high taxes & not getting a lot for those makes one wonder is it worth it? Our young people are leaving the State they can’t afford it. Our State is highly populated with out of staters with money, they probably out weigh the true Vermonter!…. Susan
Vermont is a pretty state however you have to drive to any recreation area, bicycling is only for the very adventurous since there are no bike paths and 50+ mph highways does not make bicycling at all safe or comfortable, gas prices are high and you have to drive considerable distance anywhere you want to go for food, farmers markets or general shopping. Long, cold Winters frequently to cold for even the most hardy for outdoor recreation. Other than being close to the lower New England states with there large populations, Vermont would surely be a wasteland. The second home industry makes Vermont impractical for the average retiree. …. Richard F
Burlington, Vt. Has Champlain College and the University of Vermont, with its enormous College of Medicine. Also, a 12.5 mile bike path along Lake Champlain. Beautiful and warm in the summer: bicycling, hiking, walking in the woods and forests. In the winter, unless you ski or snowshoe, head for, and establish residency, in Florida. Vermont is the place to be in the summer. Just don’t establish residency. Cool, dry, green, miles of paths, trails, back country roads. Maple syrup and cheddar cheese. Come late September, head south…. OldNassau
We live in Vermont and are sick of the winters. We don’t mind seeing snow as long as it’s gone in a few days. We love being in or near the mountains but frankly we can’t seem to find anything below the intermediate price range. Ellwyin
We are currently owned by two elderly dogs, a Pug and an Australian Silky Terrier. Recently, we purchased a townhome for retirement in New Hampshire ( not everyone’s idea ?of a retirement climate; hah!) and their pet friendliness was the clincher for us. This development is on 66 acres of land with lots of walking trails and was formerly a 55+ community. Now, all ages are accepted and ai actually prefer that scenario…. Jannamar
I love New Hampshire and have looked into costs of housing in southern New Hampshire. I have need for medical services within 20-30 minutes. I’m game for other places in the state, but the combination of lower home prices (about $275-300k) and our desire to not be in a development with homes that are close together (need 1/2-1/3 acre minimum), is difficult in a 55+ in New Hampshire and almost impossible when you look further south, such as in Delaware. Others who love the beauty of the state, access to skiing, the ocean, etc., want to move there and experience how laid back it is. Some days we go up to Hampton Beach (about 2+ hours away) just for lunch, walking the boardwalk and smelling the ocean and experience the awesome sound and look of the waves. Like others from CT, we think that New Hampshire is the ideal place to retire…. Lynne
As a NH native, I would like to put in a good word for retiring to my great state! While the southern tier more closely resembles northern Massachusetts, central, northern and coastal communities offer a more laid back, gentle, scenic way of life. We are often ranked #1 for quality of life, low crime rate, high level of education, access to superior health care, and outstanding recreational, cultural, and volunteer opportunities. Is it perfect? No, our property taxes are high and the opioid problem has received nationwide publicity. However, there are neither income nor sales taxes, groceries are reasonably priced, libraries are beautifully stocked and centers of community pride, the people (both natives and transplants!) are friendly, welcoming and inclusive. Within an hour, you can be hiking in our lovely mountains, kayaking on numerous scenic rivers and lakes, shopping tax free at any of the many, varied shopping centers, galleries, antique or unique craft shops. Outstanding medical care is available statewide…. DianeD
Lake Winnipesaukee, and other lakes nearby, in New Hampshire, might be good if you don’t like heat. The summers are mild and the autumns spectacular. The winter is cold and often snowy, but beautiful. It’s considered a summer resort area, but many people live there year-round. New Hampshire is considered fairly tax-friendly. … ClydeR
All of these states have tremendous things going for them, particularly when it comes to nature and a peaceful place to retire. Topretirements has spent great time in all of them, including a wonderful early fall trip to Maine this year. While there we ran into a lot of people that wouldn’t consider living anywhere else. If you are tempted by this trio of northeastern states, we recommend an extended road trip to check them out.
What state do you prefer? Have you retire in or are you considering retiring in Maine, New Hampshire, or Vermont? Are you full time or a snowbird? How do your experiences differ from those expressed in this article? Please share your thoughts in the Comments section below.
For for further reading:
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
Dueling States Mid-South: TN, GA, KY, AL
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