Personal finance website WalletHub recently released its report on 2021’s Best States to Retire, comparing all 50 states across 45 different metrics of retirement friendliness to determine rankings for every state.
WalletHub’s rankings seek to reveal which states let retirees keep more money in their pockets without requiring a drastic lifestyle change. But while affordability is obviously one of the biggest concerns when deciding where to retire, there are plenty of other factors to consider, like how safe the state is and how good its health care is (especially during the COVID-19 pandemic), as well as what activities it offers to keep retirees busy.
The rankings are heavily based on each state’s affordability, quality of life and health care, but WalletHub’s data set also took into consideration things like weather, quality of public hospitals, state friendliness to elders, percentage of population age 65 and older more.
Some notable findings from the rankings:
- Mississippi has the lowest adjusted cost of living while Hawaii has the highest
- Alaska has the best WalletHub ‘Taxpayer’ ranking while Illinois has the worst
- Florida has the highest percentage of population age 65 or older while Utah has the lowest
- Hawaii has the highest life expectancy while West Virginia has the lowest
While the full list of 2021 rankings is available here, we’ll reveal what qualities earned states the top five spots (including a state in the fifth spot you might not think of as a haven for retirees), and conversely, their bottom five counterparts (including two you probably wouldn’t suspect rank dead last at 49 & 50) as states retirees may want to avoid.
Best State to Retire: North Dakota
- Total score: 57.49
- Affordability rank: 24
- Quality of life: 18
- Healthcare: 6
You might think North Dakota doesn’t have a lot to going on to make it attractive for retirees, but the state has more golf courses per capita than any other state, and you can play 18 holes without breaking the bank.
Worst State to Retire #5: Rhode Island
- Total score: 42.85
- Affordability rank: 45
- Quality of life: 38
- Healthcare: 24
Affordability hurt Rhode Island’s rankings, but at least it moved up from being the third-worst state for retirement in WalletHub’s 2020 rankings.
Best State to Retire: Virginia
- Total score: 58.61
- Affordability rank: 11
- Quality of life: 7
- Healthcare: 23
In Virginia, all Social Security income is exempt from income tax, as is earned income that totals less than $12,000 per year. The average property tax rate is under 1%, and the maximum possible sales tax is 6%. Prescription drugs, as well as most over-the-counter drugs, are tax-exempt.
Worst State to Retire #4: New Mexico
- Total score: 42.68
- Affordability rank: 33
- Quality of life: 47
- Healthcare: 36
Led by a sky-high property crime rate and key bottom half rankings for its senior friendly jobs market and life expectancy, New Mexico is the nation’s fourth worst state for retirement.
Best State to Retire: Delaware
- Total score: 58.69
- Affordability rank: 5
- Quality of life: 29
- Healthcare: 22
Delaware is one of the most tax-friendly states for retirees with zero sales tax and low property taxes, helping it hit that #5 mark for affordability.
Worst State to Retire #3: Mississippi
- Total score: 41.88
- Affordability rank: 10
- Quality of life: 50
- Healthcare: 49
While affordable, Mississippi was severely dinged in the rankings for its last-place quality of life ranking and next-to-last ranking for healthcare.
Best State to Retire: Colorado
- Total score: 60.94
- Affordability rank: 13
- Quality of life: 16
- Healthcare: 5
With its majestic mountains, an abundance of recreational opportunities, overall health and gorgeous weather, Colorado is consistently named one of the best places to retire. Colorado allows a deduction of $24,000 per year on all retirement income for taxpayers 65 years old and older.
Worst State to Retire #2: New York
- Total score: 41.86
- Affordability rank: 49
- Quality of life: 17
- Healthcare: 27
New York ranked poorly due to dismal affordability and having the second-worst WalletHub “taxpayer” ranking. The state was fifth worst for adjusted cost of living and ninth worst for health care facilities per capita.
Best State to Retire: Florida
- Total score: 61.09
- Affordability rank: 4
- Quality of life: 6
- Healthcare: 28
2021’s Best State to Retire according to WalletHub is no stranger to such lists, and Florida also claimed the top spot in these rankings last year. Florida, one of the most tax-friendly states for retirees, has no state income tax. That means no state taxes on Social Security benefits, pensions, IRAs, 401ks and other retirement income. It also has no inheritance tax or estate tax.
Worst State to Retire #1: New Jersey
- Total score: 37.41
- Affordability rank: 50
- Quality of life: 35
- Healthcare: 33
“The biggest reason New Jersey finished last is affordability. It has a high cost of living, it’s among the least tax-friendly states for retirees, and has the largest share of the population aged 65+ who can’t afford a visit to the doctor—over 8%,” WalletHub analyst Jill Gonzalez said.
SEE ALSO:
- The ‘World’s Best Place to Retire in 2021’ is…
- ‘Best Places to Retire in the U.S.’ List has a New No. 1
- 10 Best and Worst States to Retire in 2020
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
