Retirement Living analyzed a mix of cost-of-living and quality-of-life metrics to arrive at these top (and bottom) retirement destinations
The beginning of the year is when a variety of organizations tend to release their new rankings of “best places to retire,” often along with the worst spots as well.
The team at Retirement Living has released a new report on the best and worst states for retirement in 2024. The report analyzed a mix of cost-of-living and quality-of-life metrics with a goal of steering seniors toward a retirement that is more achievable, affordable and livable.
Retirement Living used 13 metrics across three categories: cost of living, quality of life, and healthcare. The report relied on government data sources and a survey of 1,075 Americans aged 55+, as well as Retirement Living’s internal reviews. View the full methodology for more details.
The 2024 list of best and worst states for retirement looks quite different than in years past, the report notes. While factors like affordability and access to health care remain top of mind for seniors when choosing a place to live, consumer data sourced by Retirement Living suggests that current and future retirees in 2024 are even more focused on retirement-specific taxes and quality of life metrics.
Here are a few notable takeaways from the survey:
- Nearly half (49.6%) of respondents said they’d be willing to move to a state with a more favorable retirement climate.
- Those who mention taxes and expenses in their responses are more likely to be willing to move to a more favorable retirement state. Coincidentally, these respondents all hailed from states ranked as the “worst” for retirement.
- Only 33% of respondents from the top three “best” states said they’d move to a more favorable state. This is compared to 60% of respondents currently living in the three “worst” states for retirement.
- Respondents cite “affordability” as their most important consideration for determining where to retire; however, this year’s data shows an increase in the number of people who rated “quality of life” as their most important factor. Thirty-seven percent of respondents chose “quality of life,” 39% chose “affordability,” and 14% chose “healthcare.”
View the full report here.
Next page: 5 Best States for Retirement
5 Best States for Retirement
5. Mississippi
Retirement Living cites the Magnolia state’s small-town charm as alluring to retirees while acknowledging the poverty rate is substantial, “which bumps it low on our ‘quality of life’ ranking, but its growing senior population suggests a suitable retirement environment,” the report notes.
Survey respondents praised Mississippi so highly that it earned the highest RL Score of all 50 states.
Crime in Mississippi is one of the lowest in the nation, according to the report. And when comparing home prices against average annual incomes, the state, once again, lands in the top 10—no state other than West Virginia has more affordable housing than Mississippi.
4. Idaho
With a population increase of 5.4%, the report says more people (by percentage) have moved to Idaho than any other state. The boom has caused housing costs to spike, but with a median home price of $331,600, houses are still well below the national average of $412,000, according to the Federal Reserve Bank of St. Louis.
Crime is low, and for retirees, a good portion of their Social Security benefits, pensions, and property taxes are exempt from income tax.
3. Iowa
Affordability (ranked fifth) propelled the Hawkeye State toward the top of the rankings. Home prices average just $181,600—much lower than the national average. For tax year 2023, Iowans age 55 and older are exempt from paying state taxes on retirement income (the state also doesn’t tax Social Security benefits).
More than 18% of residents are age 65 and older. With low crime and even lower levels of poverty, Iowa is known as one of the safest places to live, the report says.
2. Maine
Retirement Living said Maine barely misses the top spot “because it levies higher income and property taxes than our best retirement state below.” However, Maine has no local sales taxes, considered this one of its biggest benefits.
“Maine also earns our praise for great access to healthcare professionals and low—really low!—crime rates,” the report says. “Plus, at 22.5%, Maine has the highest population of seniors in the country.”
Maine tied with the No. 1 Best State for Retirement below in ranking first for affordability.
1. New Hampshire
For the second year in a row, New Hampshire takes Retirement Living’s top spot for U.S. retirement destinations. “This four-season state allows residents to participate in various outdoor activities year-round. Seniors will have little issue building a network of retirement-age friends with similar interests—more than 20% of New Hampshire residents are 65 and older,” the report says.
Despite having one of the country’s highest real estate transfer taxes, many people are willing to overlook that metric in exchange for no tax on retirement income and no sales taxes, which helps keep the Granite State affordable for all residents.
Housing prices rose year-over-year, but so did the average annual income, so New Hampshire’s affordability ranking actually improved this year.
View the full report here.
Next page: 5 Worst States for Retirement
5 Worst States for Retirement
5. New Jersey
Despite favorable scores for health care and crime metrics, Retirement Living says it seems residents are fleeing New Jersey in search of more affordable housing and smaller crowds. The Garden State ranks second worst for population density, suggesting that retirees may need to trade one of the state’s desirable beach communities for a rural one if space and traffic are a concern.
The average effective property tax rate is 2.47%, which is the highest in the nation. New Jersey taxpayers must make less than $150,000 per year to qualify for a tax exemption on some or all of their retirement income.
4. Louisiana
Louisiana ranks as one of the worst states in the country for crime, the report notes. And while home prices are lower here than in other states, a lower-than-average annual income and high local taxes make affording said homes tough.
“Relocation could earn seniors exemptions on Social Security and pension plans, but we urge retirees to choose their Louisiana retirement destination carefully. Local sales taxes in some cities can add as much as 7% to the state sales tax rate. With an average state and local tax rate of 9.55%, residents could end up paying some of the highest sales tax in the country,” Retirement Living says. “In fact, three in four Louisiana-based retirees cited costs and taxes as reasons for not recommending the state as a top retirement destination.”
3. Maryland
“Even though almost 17% of Maryland’s population is 65 and older, our data analysis indicates it’s not the most desirable retirement destination,” the report says.
Maryland scores well for access to physicians and a low crime rate, but it suffers in two other categories the elderly care about most: affordability and space to breathe. Housing data from the U.S. Census suggests home prices do not align with annual income. And Maryland has more people per square mile than almost any other state.
Maryland levies taxes on estates and inheritances, as well as a partial tax on pensions, 401(k)s, and IRAs.
2. New York
Median rent and home prices in New York are the main reasons the state falls so low on Retirement Living’s list of best retirement destinations. Seniors will get a tax break on their Social Security benefits, but the savings ends there. New York has a state income tax and also partially taxes retirement account withdrawals and private pensions.
The state has experienced a population decline since 2020. At -2.6%, more people have fled New York than any other state.
1. California
“No matter how you stretch it, living in California is expensive,” the report says. “Median home values are the second highest in the nation, as are gas and grocery taxes. Though Social Security is exempt, the Golden State fully taxes income from retirement accounts and pensions.”
When asked whether they’d be willing to move to another state, 57% of all California respondents said yes.
The state ranked 49th in affordability, and curiously, was 50th in quality of life.
View the full report here.
SEE ALSO:
• 2024’s 10 Best Places in the World to Retire
• Retiring on the Cheap: 5 Countries, 7 U.S. Cities Where You Can Retire on $2,000 a Month
• One State Sweeps Top 5 in U.S. News 2024 ‘Best Places to Retire’ Rankings