Are you planning to relocate when you retire? Maybe it is to be closer to family or may it is to enjoy perfect weather and scenery, or perhaps you are selecting your retirement location based on cost of living, taxes and health care options. These are significant expenses which impact your retirement plan, your retirement spending budget and when you will move into a retirement lifestyle.
Kiplinger recently posted the 20 worst states for retirement. They looked at several factors which are relevant to retirees. These factors included:
- Cost Of Living
- Cost of Healthcare
- Average income
- Rate of poverty
- Well-being of the state
It seems the states included in the 20 worst states for retirement either had a high cost of living or high taxes or both. While most people don’t make a relocation for retirement decision based solely on the financial impact, this list is interesting to review and take into consideration if you are planning to relocate when you retire.
While Alaska is beautiful and a great place to vacation, it ranks #20 in their list. The cost of living is reported to be over 30% above the national average. It is also rated tax-friendly for retirees. Alaska isn’t a favorite place for senior citizens. However, the ones who are embracing retirement there do not pay state income, or sales tax and some eligible senior citizens receive an annual dividend check from the state’s oil wealth savings account merely because they live in Alaska. Surprisingly, the poverty level among retirees in Alaska is the lowest in the nation.
Beautiful Minnesota is #18 on their list and is one of the ten worst states for taxes on retired citizens. It seems social security and all other retirement income is taxable. They also have above average cost of living and below average incomes which can make it financially challenging. However, with all of that, somehow the retirees that are reported to be the healthiest in the nation.
Shockingly, the bluegrass state – Kentucky boasting a below average cost of living and being tax friendly, it reportedly ranks as the second worst state in the nation regarding senior health.
You’ll find the beautiful state of Montana at #15 even though it is a popular destination for retirees. The cost of living expenses are a little above average, and it is not a tax friendly state. Montana taxes social security and a lot of retirement income.
West Virginia is on the list with a below average cost of living. It is not tax friendly and does tax social security. Unfortunately, the state also ranks poorly for the health of those 65 and older.
New Mexico is #12 on the list of worst states to retire and has the third highest poverty rate for people 65 and older in the nation. New Mexico is not tax friendly and does tax social security. They do have a little bit lower cost of living and health care expenses.
You’ll also see Wisconsin on the list, the state with lots of snow and beautiful lakes. Their cost of living is a little bit below average. Wisconsin is not tax-friendly with some retirement being subject to taxes. Senior citizens in living in Wisconsin have the lowest national average household income. Health care cost for retirees is also higher.
At #6 on the list of worst states for retirement, California has the second-highest cost of living in the nation, an above average health care expense, and retirement income other than social security is taxed. It is also reported that one out of ten retirees in California is living in poverty.
New Jersey is on the list of worst states to retire in, and one reason is that the cost of living is the fifth highest in the nation and senior citizen health care costs rank third. Property taxes also rank highest in the country. The average income for residents 65 and over is the third highest in the country, and their poverty rate is low.
Holding the #1 spot is New York. The cost of living is above average. The healthcare cost for retirees is also above average. New York is not tax friendly.
Manhattan NY is at the top of expensive places to live in the nation with cost more than 125% above the national average. However, some cities are “more reasonably” above average and even some cities that have a below average cost of living. There’s an above average income for residents 65 and older yet one of the worst poverty rates in the country for this age group.
Look at the entire list and see what state is in the 20 worst states for retirement. While the most common reason to relocate for retirement is to be close to loved ones, reviewing this list and making financial preparations to thrive in the state’s situation can set you up to win and enjoy your retirement even more.