5 Surprises Top Bankrate’s Best States for Retirement 2023
Jumping all the way from 14th in 2022 to the top spot this year, Iowa now claims Bankrate’s title as the “Best State for Retirement” in 2023 according to rankings released today.
Iowa rose to the top of the list because of its “lower cost of living, affordable but high-quality healthcare, and low crime,” per Bankrate’s key takeaways from the research.
To compile its rankings, Bankrate analyzed and weighed five broad categories across all 50 states: affordability (40%), overall well-being (25%), the cost and quality of healthcare (20%), weather (10%) and crime (5%).
Affordability weighing heaviest in the rankings was the key reason Iowa was able to leapfrog every other state to land on top, and largely helped the other four states in the top five get there as well. Delaware, West Virginia, Missouri, Mississippi and Wyoming rounded out an unlikely top five (more on each on next page).
The best and worst states for retirees are split geographically (see page 3 for map of all 50 states ranked). The Midwest and the South claim the top five states, while the Northeast and West are home to the bottom five states, primarily because of the difference in cost of living.
Bankrate notes that inflation has rocked Americans’ wallets over the last two years, leaving many feeling behind on their retirement and looking for ways to stretch their savings. Retiring in a state where affordability is better than average is one way to do so.
With states in the Midwest and South viewed as more affordable, experts say retirees looking to stretch their retirement income may want to consider them over the higher cost of living in the Northeast and West.
Why Iowa?
“With its vast farmlands, peaceful countryside and friendly locals, Iowa offers a unique retirement experience for many Americans seeking a more relaxed and affordable lifestyle with access to the outdoors and retirement-age communities,” says Bankrate’s own article about the rankings.
But affordability clearly spearheaded the Hawkeye state’s ascent to the top of the list. Iowa is the sixth-cheapest place to live in the U.S., according to the Council for Community and Economic Research, which Bankrate points out is a huge advantage for retirees on a fixed income. Lower housing costs helped the state to the No. 3 spot in affordability rankings, trailing only West Virginia and Mississippi. Iowa’s median home price is $239,400, per Redfin data—well below the nationwide median home price of $388,800. Homeowners insurance in Iowa is also below the national average.
Other factors leading to the top overall ranking include the facts that Iowa doesn’t tax Social Security benefits, and Iowans age 55 and older are exempt from paying state taxes on retirement income for tax year 2023. Census data shows nearly 20% of the population is age 65 and older. Ranking 11th in quality/cost of healthcare and 12th in crime also helped.
The state was dinged for sub-par weather (38th for its cold winters, susceptibility to tornados), ranking poorly for racial and ethnic diversity, and its community-well being index (31st) is subpar.
Next page: Rest of the Top 10
