April 3, 2019 — So many times we are asked, what are the best states for retirement? There are many ways to answer that question, and in fact over the years we have tried several. You could consider it from a tax viewpoint, as in which states retirees will experience the lowest taxes. Or you could compare on other economic factors like cost of living. Alternatives are best climate, natural hazards like hurricanes, geographic features like beaches and mountains, political climate, financial health of the state, medical care, etc.
Ultimately, identifying the best state for retirement is a very personal question. In the end it boils down to what is the best state for YOUR retirement. It is very possible that your best state is where you live now, if it meets your desires, since 80% or more retirees do not cross state lines after they retire.
In this year’s best states for retirement roundup we are going to attack the question in a very practical way. First we’ll look at where the most people are actually moving in retirement. Then we’ll add some states that folks seem to be very interested in retiring to, based on the ones they spend the most time reading about on this site.
Where people actually move
First, let’s look at where people actually move for retirement, because that is the acid test of retiree preference. SmartAsset.com has done a great job extracting U.S. Census data to track the net migration of people ages 60 and over – that is, where more people that age move into a state than move out.
The 2018 SmartAsset list of the states with the highest positive net immigration changed slightly from their 2017 list. Florida had by far the most net immigration of people over 60 – over 84,000 retirees. This year Texas climbed onto the top 10 list as #6, replacing Delaware, which didn’t make it to the top 10. The states in the top 4 positions did not change, but a big move came from Nevada, which jumped to #5 from the #10 spot. Georgia made the list at #10 with a net immigration of 2,800 folks (the underlying data is from 2016). Here is the SmartAsset list:
3. North Carolina
4. South Carolina
5. Nevada (was #10 in 2018)
6. TX (new)
7. OR (was #5)
8. ID (was #6
9. AL (was #8)
10. GA (was #7)
So why did these states gain over 60 population?
Here are some thoughts on why each state might have made the list (they are ranked in order of the most net immigration – links for each state go to our mini-retirement guide for each state).
Florida. There a lot of good reasons to retire in Florida: no income tax, no estate tax, its friendly Homestead Law, warm winters, plenty of nice places to live, etc. It has a very long coast on both the Atlantic and the Gulf of Mexico, plus countless lakes and rivers. There are big cities like Miami, Jacksonville, and Sarasota. Or charming small towns like Dunedin or Fernandina Beach. Of course there are also people who don’t like the state, who tend to cite humidity, bugs and critters, summer heat, and overcrowding as their reasons. See “11 Iffy Reasons Not to Retire in Florida” and “The Most Walkable Towns in Florida” for different points of view.
Arizona. The Grand Canyon State also has warm winters in most of its regions, beautiful scenery, and a choice of affordable (and not so affordable) places to live. AZ is relatively tax-friendly – it doesn’t tax Social Security, has relatively low property taxes, and has the 36th highest Tax Burden from the Tax Foundation. Mesa, home to many active adult communities, is a city with positive net immigration.
North Carolina. The Tar Heel state has a reputation as a relatively tax friendly place to retire. Although its tax burden was ranked 20th in 2012, that ranking has probably improved due to changes made in the past few years. There are some exemptions for retirement income. The State has an unusually wide range of geographic choices. You can live at the beach, an inland city or town, or in the mountains around Asheville.
South Carolina. The Palmetto State is also considered tax-friendly with a state and local tax burden ranking of 42. People over 65 get a $15,000 exemption on qualified retirement income. The State has slightly warmer winters, plus beaches and lakes, and there are many interesting places to retire – small cities like Greenville or towns like Beaufort.
Nevada. It was not much of a surprise that the Silver State benefitted from net over 60 immigration. It has warm winters and a huge number of active adult communities with all kinds of amenities. It is one of only three states with positive net over 60 immigration that has no state income tax. Henderson had the distinction of being the U.S. city with the most net over 60 immigration last year. Cost of living is above average, ranked #36 by MERIC.
Texas. This huge state made it back into the top 10 again in 2017. One of seven states with no income tax, its state and local burden is low, ranked #46 by the Tax Foundation. Cost of living is low, ranked #12. Texas has a range of places to retire from college towns like Austin to its Hill Country towns. San Antonio was the #2 town for net over 60 immigration. There is a long coast on the Gulf as well.
Oregon. One of the non-Sun Belt states with the most retiree immigration, Oregon has a mild climate and a range of geography from fantastic beaches to amazing mountains. Its other attractions include no state sales tax, interesting cities like Portland OR, and amazing outdoor experiences in places like Bend. Its 2012 Tax Burden ranked 10th, which is the highest of all these states. The state’s cost of living was also fairly high at 45th. Oregon is a good example of a retirement state that might not be the cheapest, but it has many other attractions that make it very desirable.
Idaho. This up and coming state for retirement has a lot more to offer than its famous potatoes. For one, its outdoor recreation is hard to beat. Cost of living is relatively low (ranked 20th), as are property taxes (people over 65 get a significant break on their primary residence). Coeur d’Alene, on the shores of Lake Coeur d’Alene, attracts retirees and tourists because of its outstanding beauty and outdoor recreation.
Alabama. Many retirees are attracted to the coastal areas around Mobile, and that includes interesting Fairhope, which began as a Utopian community. Huntsville in the north offers a diverse small city environment. The State’s very low taxes (Tax Foundation burden ranked #39) and low cost of living (ranked 6th lowest) are very important reasons for why retirees are moving here.
Georgia. Warmer winters, lower cost of living (11th lowest by the MERIC Index), and lower taxes are some of the reasons why people over 65 are moving to the Peach State. College towns like Athens are a big draw.
Interest in Retirement States at Topretirements
We also looked at the states that our visitors explore online at Topretirements as a gauge of interest in the various states. Based on how many people “explored” these states on our site, we are adding four more states to our “Best States for Retirement” list:
Tennessee. The biggest sleeper state coming out of our visitor logs is Tennessee, which generated a lot of online interest. Interest and dividends, are the only kinds of income taxed here, resulting in a very low State and Local Tax Burden. Cost of living is 7th lowest in the U.S. Crossville‘s popularity as a retirement destination has led to the development of several very large active adult communities here.
Wyoming. For starters, this western state has no income tax, so your Social Security will not be taxed. It also has some great places to retire like Laramie, home to the University of Wyoming. plus plenty of mountains for recreation.
Colorado. Though not particularly inexpensive, the state does have a good Tax Burden ranking (35th) and a relatively low flat income tax rate. People want to retire here because it is so beautiful and there are so many great places to live, such as Colorado Springs, Eagle, etc.
Delaware. The State has a great location with beaches and rural areas like the Delmarva Peninsula. Its tax burden is not the greatest (16th highest), but the combination of tax breaks for older citizens and very low property taxes make it attractive. Lewes is the fastest growing region of Delaware with many retirement communities located here and the surrounding area.
Although the four states above do not have the best net immigration rankings among people over 60, it is clear from our site logs that many folks are thinking about retiring to them, for a variety of reasons.
Chart of the Best States by attribute
The chart below attempts to show how each of these 14 states stacks up on factors like taxes, climate, natural disasters, etc. Some of the climate rankings might be slightly arbitrary, but hopefully the whole chart will give you a place to start your comparisons.
The best state for retirement is still a personal decision
It is useful to look at the states and towns where people actually retire because there have to be some good reasons why they are choosing them. But in the end, your own considerations might be more important.
Our advice is to carefully consider the factors that matter to you when choosing a retirement state. Then go there to visit and stay awhile, to see if your hunches were correct, before you do anything drastic like buying a home. The truth is, according to MarketWatch, most Americans don’t go anywhere in retirement: “Some 6% of those ages 55 to 59 moved anywhere between 2014 and 2015…. Among 65 to 69 year olds, just 4.5% moved during that year and of them, 10% moved to a different region. according to U.S. Census Survey data”, and only a tiny fraction of them relocated to a different region of the country.
An article from the New York Times,”The Best Places to Move in Retirement: They’re All Over the Map“, makes interesting reading on the sometimes silly and inconsistent choices that show on up on “Best Places to Retire” lists. It is a good article worth reading with a lot of background on best places to retire lists.
For further reading:
Best States for Retirement 2014 – MultiFactor Analysis
Worst States for Retirement 2018
Best States for Retirement 2012
Most Tax Friendly States for Retirement
Best States for Retirement – Most Popular
Comments? What is your answer to the question, what is the best state for your retirement? Why is that? Is it where you live now? Please share your thoughts as to why in the Comments section below.