Retirement might be the end of your career, but it doesn’t have to be the end of financial security or life satisfaction. Retirement generally coincides with the age at which we may receive Social Security or pension benefits. However, not everyone can retire when they want to. In fact, in 2019, 26 percent of non-retired adults had no money saved for retirement, though not necessarily through any fault of their own. Furthermore, with the financial stress Americans have faced during the COVID-19 pandemic, it’s likely that many were unable to save in 2020 as well. A recent study even found that a quarter of Americans expect to retire later than originally anticipated due to the economic impact of COVID-19.
In addition to when to retire, a good question to ask is where. Finding the best states to retire can be difficult without doing lots of research. Even in the most affordable areas of the U.S., most retirees cannot rely on Social Security or pension checks alone to cover all of their living expenses. Social Security benefits increase with local inflation, but they replace only about 39 percent of the average worker’s earnings. Plus, while affordability is 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.
If retirement is still a big question mark for you because of finances, consider relocating to a state that lets you keep more money in your pocket without requiring a drastic lifestyle change. To determine the best states to retire, WalletHub compared the 50 states across 45 key indicators of retirement-friendliness. Our analysis examines affordability, health-related factors and overall quality of life.
Best & Worst States to Retire
|Overall Rank||State||Total Score||Affordability||Quality of Life||Health Care|
Note: With the exception of “Total Score,” all of the columns in the table above depict the relative rank of that state, where a rank of 1 represents the best conditions for that metric category.
In order to choose the best state to retire for you, you must carefully consider various factors such as your finances, health and how you plan to spend your time. For advice on these choices, we turned to a panel of experts in fields such as aging and taxes. Click on the experts’ profiles to read their bios and responses to the following key questions:
- What is the most common mistake that retirees make when choosing where to live?
- What are some tips for living on a fixed income in retirement?
- What are the top factors retirees should consider when choosing a state for retirement?
- The financial impact of the pandemic has many Americans reevaluating their retirement plans. What are some new points of concern for future retirees in considering where to retire?
- Should states work to attract retirees? What are the pros and cons to having a large retiree population?
- Should retirees be exempt from certain state and local taxes?
- How might changes to the tax code influence retirement security?
Ask the Experts
In order to identify the most retirement-friendly states, WalletHub compared the 50 states across three key dimensions: 1) Affordability, 2) Quality of Life and 3) Health Care.
We evaluated those dimensions using 45 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for retirement. For metrics marked with an asterisk (*), we used the square root of the population to calculate the population size in order to avoid overcompensating for minor differences across states.
We then calculated each state’s weighted average across all metrics to determine its overall score and used the resulting scores to rank-order the states.
Affordability – Total Points: 40
- Adjusted Cost of Living: Double Weight (~10.00 Points)
- General Tax-Friendliness: Full Weight (~5.00 Points)
Note: This metric is based on WalletHub’s States with the Highest & Lowest Tax Rates ranking.
- Retired Taxpayer-Friendliness: Full Weight (~5.00 Points)
Note: This metric measures taxation on retirement income, property and purchases, as well as special tax breaks for seniors.
- Tax-Friendliness on Estate or Inheritance Tax: Full Weight (~5.00 Points)
- Annual Cost of In-Home Services: Full Weight (~5.00 Points)
- Annual Cost of Adult Day Health Care: Full Weight (~5.00 Points)
- Share of Population Aged 65 and Older Who Could Not Afford a Doctor Visit: Full Weight (~5.00 Points)
Note: This metric measures the share of the population aged 65 and older who needed to see a doctor in the past 12 months but were restricted due to cost.
Quality of Life – Total Points: 30
- Share of Population Aged 65 and Older: Double Weight (~2.86 Points)
- Risk of Social Isolation: Full Weight (~1.43 Points)
Note: This metric considers the following six risk factors of social isolation in the population aged 65 and older: a) Divorced, separated or widowed; b) Never married; c) Poverty; d) Disability; e) Independent Living Difficulty and f) Living alone.
- Elderly-Friendly Labor Market: Full Weight (~1.43 Points)
Note: This metric takes into account both the share of the population aged 65 and older working and the number of part-time employees for every full time employee for the population aged 65 and older.
- Share of Population Aged 65 and Older in Poverty: Full Weight (~1.43 Points)
- Elderly Food Insecurity Rate: Full Weight (~1.43 Points)
Note: This metric refers to the share of the population aged 60 and older who faced the threat of hunger in the past 12 months.
- Expenditures Captured by the Administration on Aging per Population Aged 60 and Older: Full Weight (~1.43 Points)
Note: The Older Americans Act (OAA) is administered by the Administration on Aging. It funds “personal care, adult day care, homemaker assistance, case management, home-delivered-meals, congregate meals, transportation, physical fitness and nutrition-education programs for seniors.”
- Access to Public Transportation: Full Weight (~1.43 Points)
Note: This metric measures the share of commuters who use public transit as a proxy for the availability of public transportation.
- Mildness of Weather: Double Weight (~2.86 Points)
Note: This metric is based on WalletHub’s Cities with the Best & Worst Weather ranking.
- Access to Scenic Byways: Full Weight (~1.43 Points)
Note: This metric takes into account both the number of scenic byways and the length of scenic byways.
- Shoreline Mileage: Full Weight (~1.43 Points)
- Golf Courses per Capita*: Full Weight (~1.43 Points)
- Access to Adult Volunteer Activities: Full Weight (~1.43 Points)
Note: This metric measures the number of rated charity organizations per capita*.
- Elderly Volunteer Rate: Full Weight (~1.43 Points)
- Share of Residents Who Do Favors to Their Neighbors (proxy for Neighborhood Friendliness): Full Weight (~1.43 Points)
- Violent-Crime Rate: Full Weight (~1.43 Points)
- Property-Crime Rate: Full Weight (~1.43 Points)
- Quality of Elder-Abuse Protections: Full Weight (~1.43 Points)
Note: This metric is based on WalletHub’s States with the Best Elder-Abuse Protections ranking.
- Air Quality: Full Weight (~1.43 Points)
- Drinking-Water Quality: Full Weight (~1.43 Points)
Note: This metric measures the share of population served by Community Water Systems with a serious drinking water violation.
Health Care – Total Points: 30
- COVID-19 Positive Testing Rate in the Past Week: Triple Weight (~3.60 Points)
- COVID-19 Death Rate in the Past Week: Triple Weight (~3.60 Points)
- Family Medicine Physicians per Capita: Double Weight (~2.40 Points)
- Dentists per Capita: Full Weight (~1.20 Points)
- Nurses per Capita: Full Weight (~1.20 Points)
- Home Health Aides per Capita: Full Weight (~1.20 Points)
Note: Home health aides often help older adults who need assistance. In some states, home health aides may be able to give a client medication or check the client’s vital signs under the direction of a nurse or other healthcare practitioner.
- Share of Geriatricians Required to Meet Estimated Need (Geriatrician Shortfall): Double Weight (~2.40 Points)
- Top-Rated Geriatrics Hospitals: Double Weight (~2.40 Points)
- Health-Care Facilities per Capita: Full Weight (~1.20 Points)
- Quality of Public Hospitals: Full Weight (~1.20 Points)
Note: This metric is based on Centers for Medicare & Medicaid Services’ ranking of public hospitals.
- Well-Being Index for Population Aged 55 and Older: Full Weight (~1.20 Points)
- Share of Population Aged 65 and Older with Good or Better Health: Full Weight (~1.20 Points)
- Share of Population Aged 65 and Older with Poor Mental Health: Full Weight (~1.20 Points)
Note: This metric refers to the share of the population age 65 and older who reported their mental health was not good 14 or more days in the past 30 days.
- Share of Population Aged 65 and Older with a Disability: Full Weight (~1.20 Points)
- Share of Population Aged 65 and Older Who Are Physically Active: Half Weight (~0.60 Points)
- Share of Population Aged 65 and Older Who Are Obese: Half Weight (~0.60 Points)
- Share of Population Aged 65 and Older with Inadequate Sleep: Full Weight (~1.20 Points)
Note: This metric refers to the share of adults age 65 and older who reported sleeping fewer than seven hours in a 24-hour period on average.
- Life Expectancy: Full Weight (~1.20 Points)
- Death Rate for Population Aged 65 & Older: Full Weight (~1.20 Points)
Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Federal Bureau of Investigation, Council for Community and Economic Research, U.S. Bureau of Labor Statistics, Genworth Financial, United Health Foundation, Centers for Disease Control and Prevention, Corporation for National and Community Service, Centers for Medicare & Medicaid Services, Charity Navigator, Gallup Healthways, GolfLink, The Tax Foundation, America's Scenic Byways, NOAA Office for Coastal Management, U.S. News & World Report, The Kiplinger Washington Editors, County Health Rankings, The COVID Tracking Project, County Health Rankings and WalletHub research.