A 2023 study ranked states by how affordable they would be to retire to. Some of the results have surprised seniors looking for a place to spend their golden years.
Deciding Where to Retire for Your Budget
Making decisions about where to enjoy your retirement isn’t always about what kinds of amenities are around. Sometimes, you need to consider your budget and the benefits available to retirees in the state you’ll be living in.
We’ve rounded up a list of the 14 most affordable states for retirees to help with your decision.
What States Didn’t Make the Cut?
Despite remaining a popular destination for retirees, Florida isn’t in the top 14 most affordable states – not even close. It’s actually one of the most expensive states to retire in.
Which States Are Most Expensive for Retirement?
The five most expensive states were Massachusetts, New York, Connecticut, New Jersey, and California.
The Most Affordable States for Retirees
According to the Seniorly study, these are the most affordable states for retirees to call home.
#1. Wyoming
In Wyoming, you won’t pay state taxes on your retirement income or Social Security. Property taxes have remained low in the state, and there is no shortage of sprawling acreage on which you can situate your homestead.
#2. Utah
If you can handle the sometimes harsh weather, Utah is a great option for retirees. It offers stunning mountain views as well as tax breaks for retirement income.
#3. Montana
With its low property taxes, no sales tax, and low tax rates for retirement income under a certain cap, Montana ranks high for affordable retirement.
#4. Idaho
Idaho doesn’t tax Social Security, only imposes a 6% sales tax rate, and even offers a grocery tax credit for seniors over 65. The state also offers good healthcare options and a fairly low cost of living.
#5. Virginia
Virginia is well-loved by retirees, too – in addition to its mild climate, it offers great tax benefits for seniors. There’s no Social Security tax, only partial taxes for other forms of retirement income, and there are tax deductions available for retirement income.
#6. Colorado
While the state is generally not considered an inexpensive place to live for most people, retirees are the exception. Colorado boasts high deductions for retirement income – up to $24,000.
Social Security benefits are taxed, but the deductions often offset the difference.
#7. New Mexico
New Mexico is a favorite retirement state – it’s warm, relatively inexpensive for living costs, and most Social Security payments are not taxed.
#8. Delaware
Delaware does not impose sales taxes or inheritance taxes, and it has low property taxes compared to other coastal states. It also does not tax Social Security income and has deductions available for seniors.
For the first $12,500 in retirement income, seniors over 60 in Delaware will pay 0% in taxes.
#9. West Virginia
A low cost of living state in general, West Virginia offers a beautiful and relaxing (and financially beneficial) home to retirees.
From its low property taxes and exemptions for seniors to its plan to eliminate taxes on Social Security, West Virginia is a good option for retirees.
#10. Tennessee
Tennessee is another state that does not have income taxes. It also has generally good home prices and its cost of living is lower than average.
#11. Arkansas
Speaking of low cost of living, Arkansas has much to offer to seniors. It does not tax Social Security and only partially assesses retirement account withdrawals. The state will also freeze property taxes for those over 65.
#12. Georgia
If you’ve considered making the trip to Florida for retirement, Georgia might be a better option, and it’s on the way. Georgia is a tax-friendly state because it does not impose taxes on Social Security, and it also won’t make you pay taxes on inheritance.
#13. North Dakota
Social Security income is only partially taxed in North Dakota, but the state has a low cost of living and is generally equipped to care for seniors on a budget.
#14. Washington
Washington checks all the boxes: mountains, ocean, tax-free Social Security and pension income, and a gorgeous climate. The cost of living in most of the state is reasonable as well, and the state is known for its outdoor offerings.
Making the Right Decision
The decision of where to retire is one that will affect the rest of your life, so it can’t be made lightly. Any of these states are great options for retirees on fixed incomes who want to make the most of their retirement.
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The post Retirement Reality Check: Study Reveals Unexpected State Affordability Rankings first appeared on Thrift My Life.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.