5 Surprises Top Bankrate’s Best States for Retirement 2023

Jumping all the way from 14^th 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 11^th in quality/cost of healthcare and 12^th in crime also helped.

The state was dinged for sub-par weather (38^th for its cold winters, susceptibility to tornados), ranking poorly for racial and ethnic diversity, and its community-well being index (31^st) is subpar.

Next page: Rest of the Top 10

Rest of the top 10

Here’s a quick look at what led other states to top 10 overall rankings.

2. Delaware: The Bankrate articles says the state combines high-quality healthcare (despite a 37 rank) and a light tax burden to rank No. 2 overall. Diversity, wellness and culture are other strong points. The state ranks near the top for racial and ethnic diversity, arts and entertainment establishments per capita and wellness. It also has one of the nation’s highest percentages of over-65 residents. Earthquakes, tornados and hurricanes are rare—and it places in the middle of the pack for both cost of healthcare and crime. The state’s only weak spot is in the affordability category, ranking 31st for cost of living.

3. West Virginia: This small state seems an odd choice for the top five, but West Virginia boasts the best affordability in the nation, based on a low cost of living and light tax burden. The state fell in the middle of the pack for wellness, placing 26th in that category.

4. Missouri: Fourth-place Missouri shines for affordability (5^th overall), but struggles with its quality of healthcare (28^th), crime (42^nd) and natural disasters.

5. Mississippi: Another Sun Belt surprise, Mississippi scored well on affordability, weather and crime but suffered in two other key categories, healthcare and overall well-being.

6. Wyoming: Top-10 ranks in affordability (9^th) and crime (7^th) put Wyoming into the top 10, with some help from a high ranking in well-being (16^th).

7. Pennsylvania: The state didn’t crack the top 10 in any single category, but placed in the top half in every one but weather (33^rd). Crime (12^th) and well-being (14^th) were its best categories.

8. Florida: Ranking third for both well-being and weather led to this traditional retirement haven making the top 10.

9. Hawaii: Hawaii ranked No. 1 for both well-being and weather and was 12^th in quality/cost of healthcare, but was dinged for its affordability (45^th) and crime (32^nd) rankings.

10: Nebraska: Despite ranking 37^th and 35^th for well-being and weather, Nebraska took the last spot in the top 10 thanks for high ranks for affordability (13^th) and quality/cost of healthcare 18^th.

Next page: Bottom 10 States for Retirement; 50 state ranking map

The Bottom 10

41. Louisiana: Despite ranking 5^th for weather, Louisiana lagged in crime (48^th), quality/cost of healthcare (44^th) and well-being (41^st).

42: Maryland: Affordability (46^th) killed Maryland despite top-15 rankings in quality/cost of healthcare (12^th) and weather (14^th).

43: Colorado: Despite ranking 1^st overall for quality/cost of healthcare, Colorado fell into the 40s thanks for ranking 41^st for affordability and curiously 43^rd for weather.

44. Texas: Ranked 6^th for weather, but 47^th for well-being 38^th for crime and 36^th for quality/cost of healthcare.

45: North Dakota: Its 18^th rank in crime was its only top 25 category, while weather (48^th), quality/cost of healthcare (40^th) and well-being (39^th) rankings were costly.

46: Massachusetts: Again, affordability (48^th) led to its bottom-five ranking despite ranking 10^th in crime and 11^th in well-being.

47: Washington: Ranked second for quality/cost of healthcare, but 47^th for affordability and 34^th for both weather and crime.

48: California: 49^th for affordability.

49: New York: 50^th for affordability.

50. Alaska: The state was dragged down by back-of-the-pack scores in weather (50^th) and crime (49^th) and a 43^rd rank for affordability.

Graphic courtesy of Bankrate

SEE ALSO:

• More 2023 ‘Best & Worst’ States for Retirement: New Ranking has Surprising #1

• 10 Best and Worst States to Retire 2023: WalletHub

• 7 Eye-Opening Findings from Bankrate’s 2023 Emergency Savings Report