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Choosing the best place to retire is a personal decision. No
amount of number-crunching can make it for you. Only you can decide how
close to your grandkids you want to live or whether you want to hit the road or even head abroad.
However, an examination of some of the objective factors that matter to
retirees--in particular those tied to safety and economic security--can
help you narrow the options. With this goal in mind, we rated all 50
states and the District of Columbia in terms of how well each suits the
unique needs of retirees.
Our rankings favored states that are affordable and
economically healthy, as well as those with lower crime rates. We also
took into account the presence of a robust retirement-age population.
Finally, we weighed the tax situation for retirees in each state. Note
that we did not account for weather because some retirees yearn for
year-round warmth while others might prefer the changing seasons.
SEE ALSO: Cheapest Places You'll Want to Retire
We found the worst places for retirees scattered throughout the country. And though they are geographically diverse, they have one thing in common: All have above-average living costs that can strain fixed incomes. The following states might be great places to work, raise a family or visit, but they hold the least appeal when judged strictly as retirement destinations.
10. Texas
Total population: 25.6 million
Share of population 65+: 10.7% (U.S.: 13.4%)
Cost of living: 1.5% above the U.S. average
Average income for 65+ households: $49,842 (U.S.: $48,665)
Retiree tax picture: FriendlyRetirees may feel lonely in the Lone Star State. Just two other states have a smaller percentage of residents age 65 and older. In fact, the median age in Texas is a strapping 33.8 years old, the third-youngest in the country (the U.S. median age is 37.3).
Another deterrent for retirees: The poverty rate for seniors is 11.3% in Texas, compared with 9.4% in the U.S., and the overall state poverty rate is 17.6%, versus 15.4% for the U.S. Texans of all ages must also cope with above-average crime rates.
Certain metro areas rise above the state's drawbacks: The city of Sherman actually made our list of Cheapest Places Where You'll Want to Retire, due to the metro area's low costs and the state's tax-friendliness for retirees. We also recommend Austin as a great place for golfers to retire, based on its 32 public courses and low greens fees.
9. Utah
Total population: 2.8 million
Share of population 65+: 9.3%
Cost of living: 3.4% above average
Average income for 65+ households: $48,925
Retiree tax picture: Not FriendlyThe Beehive State may be buzzing with life, but it's not necessarily the style retirees are seeking. Utah's population has the second-lowest share of people 65+ in the U.S., trailing only Alaska. Indeed, it's the youngest state in the country, with a median age of 29.6, nearly eight years younger than the national median. That small pool of older residents is also 63.8% married--the highest share in the U.S.--which may make Utah particularly unattractive for single retirees.
High costs are another detractor. The median home value for the 65-and-up population in Utah is $203,300, 23.7% higher than the U.S. median of $164,400. Unfriendly state tax laws for retirees add to their burden: Utah is one of the few states that taxes Social Security benefits.
SEE ALSO: Worst Social Security Mistakes You Can Make
St. George, however, offers a pocket of affordability in Utah. The metro area made our list of Cheapest Places Where You'll Want to Retire, due to extraordinarily low living costs reported by local retirees, not to mention the natural scenery and outdoor lifestyle.
8. Oregon
Total population: 3.9 million
Share of population 65+: 14.5%
Cost of living: 14.3% above average
Average income for 65+ households: $39,872
Retiree tax picture: Least Friendly
Taxes in the Beaver State gnaw away at fixed incomes. Among the 10 Least Tax-Friendly States for Retirees, Oregon levies one of the highest state income tax rates in the country, ranging from 5% to 9.9%. And although Social Security benefits are exempt, most other retirement income is taxable. Not that there's much to tax. Oregon seniors bring in below-average household incomes--18.1% less than the national average of $48,665, to be exact. There is no state sales tax.
Despite low incomes, expenses are high. In addition to the overall high cost of living, the median home value in Oregon for seniors is $227,400, versus $164,400 for the U.S. as a whole. At least you can defer paying property taxes if you are age 62 or older and meet income requirements. But when you sell, move or die, those taxes will come due.
Oregon's rate of property crime is above average, as is the state's overall poverty rate.
7. Nebraska
Total population: 1.8 million
Share of population 65+: 13.7%
Cost of living: 2.0% above average
Average income for 65+ households: $39,441
Retiree tax picture: Least Friendly
The smallest state on this list (not counting the District of Columbia) offers equally small incomes. Despite being home to billionaire Warren Buffett, Nebraska's typical household income is woefully below average. Aging Cornhuskers have the lowest average household income on this list, at 19.0% less than the national average.
Those low incomes may now get retirees a break on taxes, at least. Though it's currently one of the 10 Least Tax-Friendly States for Retirees, starting in 2015 Nebraska has introduced new rules exempting some residents from paying taxes on Social Security benefits, depending on income. Otherwise, benefits are taxed to the same extent as the federal rate. There are no breaks for most other retirement income. Also, there's an inheritance tax of 1% to 18%, depending on the beneficiary's relationship to the deceased.
SEE ALSO: 9 Reasons Women Will Never Retire
On the plus side, rates of both violent crimes and property crimes come in below the national average, as do Nebraska's poverty rates for both seniors and the general population.
6. North Carolina
Total population: 9.7 million
Share of population 65+: 13.4%
Cost of living: 2.1% above average
Average income for 65+ households: $39,769
Retiree tax picture: Mixed
The mild winters and pretty scenery may not be enough to lure you into Tar Heel country. Typical household incomes in North Carolina don't track with the state's above-average living costs. The average for all households is $64,490, the second-lowest among the 10 states we examine here and 14.0% less than the U.S. average. Older residents fare even worse, with income for 65+ households falling 18.3% below average.
Poverty is a concern. Ten percent of seniors live below the line, versus 9.4% nationwide. More troubling, the poverty rate for the whole state is 17.5%, compared with 15.4% for the U.S. Property crime in North Carolina is above average.
As for taxes, besides Social Security benefits, which are exempt, most other retirement income is subject to tax. Effective in 2015, North Carolina switched to a flat income tax rate of 5.75%. There is no inheritance tax or estate tax, and older homeowners may qualify for a property-tax exemption.
5. Minnesota
Total population: 5.3 million
Share of population 65+: 13.3%
Cost of living: 3.6% above average
Average income for 65+ households: $41,991
Retiree tax picture: Least Friendly
The Land of 10,000 Lakes may drown retirees in taxes. Yet another of the 10 Least Tax-Friendly States for Retirees, Minnesota taxes Social Security benefits the same as the feds. Most other retirement income, including from military, government and private pensions, is also taxable. And the sales tax and income tax rates are high, at 6.875% and 5.35% to 9.85%, respectively.
Most older residents won't have to worry about those top tax rates. The average household income for Minnesotans 65 and older falls 13.7% below the U.S. average--and far beneath the thresholds for the highest tax bracket.
SEE ALSO: 11 Common Medicare Mistakes
Yet the state's cost of living is above average. According to health care research firm HealthView Services, lifetime health care costs for a healthy 65-year-old couple retiring this year and covered by Medicare parts B and D and a supplemental insurance policy total $403,562 in Minnesota. The U.S. average is $394,954. And the median home value for 65+ homeowners is $173,600, compared with $164,400 for the U.S.
4. New York
Total population: 19.5 million
Share of population 65+: 13.8%
Cost of living: 52.7% above average
Average income for 65+ households: $61,754
Retiree tax picture: Least Friendly
One pricey Big Apple spoils the entire Empire State. In 2014, the city reigned as the most expensive place to live in the U.S., with costs soaring 120.4% above the national average. New York also sports the highest living costs of any state in the country. No wonder, despite the above-average incomes of residents age 65 and older, the same age group suffers a poverty rate of 11.3%, worse than the national 9.4% rate.
Health care and housing are notably expensive in New York. A healthy 65-year-old couple retiring this year will face lifetime health care costs totaling $413,597, the most expensive on this list and 4.7% higher than average. New York has the second-highest median monthly rental costs for seniors after California on this list, according to the Census Bureau. And the median value of a home owned by someone 65+ is $270,600 in the state, compared with $164,400 in the U.S. Homeowners also face some of the highest property taxes in the country.
3. New Mexico
Total population: 2.1 million
Share of population 65+: 13.8%
Cost of living: 3.6% above average
Average income for 65+ households: $42,160
Retiree tax picture: Mixed
When it comes to taxes, the Land of Enchantment presents a lackluster reality to its retired residents. Social Security benefits are subject to tax, though at least some of the income can be included in an exemption allowed for people age 65 and older. There's also a statewide gross receipts tax (similar to a sales tax) of 5.125%. County and city taxes can add another 3.56%.
Other notable negatives: Safety may be an issue. For every 100,000 residents in New Mexico, there were 3,705 property crimes, including burglary and car theft, and 613 violent crimes, such as rape and murder, in 2013. (Comparatively, across the U.S., 2,731 property crimes and 368 violent crimes occurred per 100,000 people.) The poverty rate for older residents is also high at 12.1%, versus 9.4% for the U.S.
SEE ALSO: 6 Savvy Moves to Stretch Your Retirement Savings
If you're eyeing the Southwest for its sunny climate and multicultural vibe, check out Arizona, one of our 10 most tax-friendly states for retirees, instead. The Grand Canyon State does not tax Social Security benefits, prescription drugs or groceries, and its top income tax rate of 4.54% is lower than New Mexico's 4.9%.
2. California
Total population: 37.7 million
Share of population 65+: 11.8%
Cost of living: 34.7% above average
Average income for 65+ households: $60,440
Retiree tax picture: Least Friendly
Another one of the least tax-friendly states for retirees, the Golden State could be a foolish retirement choice. Except for Social Security benefits, retirement income is fully taxed, and California imposes the highest state income tax rates in the nation (the top rate is 13.3%). The current state sales tax of 7.5% is also daunting. The sales tax can reach as high as 10% in certain cities and counties that collect additional local levies.
If that doesn't burden your budget enough, living costs will likely add to the stress. The biggest state in the country bears the third-highest cost of living, behind New York and the District of Columbia. The median home value for those 65+ in California is $368,600, more than double the national median. Retirees who rent will fare no better: Monthly rental costs for renters 65 and older are the steepest in the nation.
1. District of Columbia
Total population: 619,371
Share of population 65+: 11.4%
Cost of living: 39.9% above average
Average income for 65+ households: $90,755
Retiree tax picture: Not Friendly
America's seat of power is no place to retire. Spanning just 68.3 square miles, the District's population is tiny, and only a small share of those residents are 65+--a total of 70,363 people. The median age in D.C. is a green 33.8 years old, compared with 37.3 for the U.S., which makes the metro area a better choice for new grads than for retirees.
The nation's capital has the second-highest cost of living in the U.S. after New York, and the greater metro area is among the most expensive in the country. Specifically for folks 65 and older, the median home value is $424,400, the highest on this list and second only to Hawaii. And though it boasts the highest average income for 65+ households in the country--the D.C. area is home to a great many millionaires--it also suffers a painfully high 14.0% poverty rate among seniors (tied with Mississippi for most impoverished). Violent crimes occur at 3.5 times the national rate, and the property crime rate is also higher than average.
High taxation (without representation, no less) is another deterrent. D.C.'s top income tax rate is 8.95%, among the highest in the country, according to the Tax Foundation. The sales tax is 5.75%. One bright spot on taxes: Social Security benefits, as well as up to $3,000 of military, federal and D.C. pensions, are tax-exempt.
Culled from kiplinger in yahoo finance
SEE ALSO: Cheapest Places You'll Want to Retire
We found the worst places for retirees scattered throughout the country. And though they are geographically diverse, they have one thing in common: All have above-average living costs that can strain fixed incomes. The following states might be great places to work, raise a family or visit, but they hold the least appeal when judged strictly as retirement destinations.
10. Texas
Total population: 25.6 million
Share of population 65+: 10.7% (U.S.: 13.4%)
Cost of living: 1.5% above the U.S. average
Average income for 65+ households: $49,842 (U.S.: $48,665)
Retiree tax picture: FriendlyRetirees may feel lonely in the Lone Star State. Just two other states have a smaller percentage of residents age 65 and older. In fact, the median age in Texas is a strapping 33.8 years old, the third-youngest in the country (the U.S. median age is 37.3).
Another deterrent for retirees: The poverty rate for seniors is 11.3% in Texas, compared with 9.4% in the U.S., and the overall state poverty rate is 17.6%, versus 15.4% for the U.S. Texans of all ages must also cope with above-average crime rates.
Certain metro areas rise above the state's drawbacks: The city of Sherman actually made our list of Cheapest Places Where You'll Want to Retire, due to the metro area's low costs and the state's tax-friendliness for retirees. We also recommend Austin as a great place for golfers to retire, based on its 32 public courses and low greens fees.
9. Utah
Total population: 2.8 million
Share of population 65+: 9.3%
Cost of living: 3.4% above average
Average income for 65+ households: $48,925
Retiree tax picture: Not FriendlyThe Beehive State may be buzzing with life, but it's not necessarily the style retirees are seeking. Utah's population has the second-lowest share of people 65+ in the U.S., trailing only Alaska. Indeed, it's the youngest state in the country, with a median age of 29.6, nearly eight years younger than the national median. That small pool of older residents is also 63.8% married--the highest share in the U.S.--which may make Utah particularly unattractive for single retirees.
High costs are another detractor. The median home value for the 65-and-up population in Utah is $203,300, 23.7% higher than the U.S. median of $164,400. Unfriendly state tax laws for retirees add to their burden: Utah is one of the few states that taxes Social Security benefits.
SEE ALSO: Worst Social Security Mistakes You Can Make
St. George, however, offers a pocket of affordability in Utah. The metro area made our list of Cheapest Places Where You'll Want to Retire, due to extraordinarily low living costs reported by local retirees, not to mention the natural scenery and outdoor lifestyle.
8. Oregon
Total population: 3.9 million
Share of population 65+: 14.5%
Cost of living: 14.3% above average
Average income for 65+ households: $39,872
Retiree tax picture: Least Friendly
Taxes in the Beaver State gnaw away at fixed incomes. Among the 10 Least Tax-Friendly States for Retirees, Oregon levies one of the highest state income tax rates in the country, ranging from 5% to 9.9%. And although Social Security benefits are exempt, most other retirement income is taxable. Not that there's much to tax. Oregon seniors bring in below-average household incomes--18.1% less than the national average of $48,665, to be exact. There is no state sales tax.
Despite low incomes, expenses are high. In addition to the overall high cost of living, the median home value in Oregon for seniors is $227,400, versus $164,400 for the U.S. as a whole. At least you can defer paying property taxes if you are age 62 or older and meet income requirements. But when you sell, move or die, those taxes will come due.
Oregon's rate of property crime is above average, as is the state's overall poverty rate.
7. Nebraska
Total population: 1.8 million
Share of population 65+: 13.7%
Cost of living: 2.0% above average
Average income for 65+ households: $39,441
Retiree tax picture: Least Friendly
The smallest state on this list (not counting the District of Columbia) offers equally small incomes. Despite being home to billionaire Warren Buffett, Nebraska's typical household income is woefully below average. Aging Cornhuskers have the lowest average household income on this list, at 19.0% less than the national average.
Those low incomes may now get retirees a break on taxes, at least. Though it's currently one of the 10 Least Tax-Friendly States for Retirees, starting in 2015 Nebraska has introduced new rules exempting some residents from paying taxes on Social Security benefits, depending on income. Otherwise, benefits are taxed to the same extent as the federal rate. There are no breaks for most other retirement income. Also, there's an inheritance tax of 1% to 18%, depending on the beneficiary's relationship to the deceased.
SEE ALSO: 9 Reasons Women Will Never Retire
On the plus side, rates of both violent crimes and property crimes come in below the national average, as do Nebraska's poverty rates for both seniors and the general population.
6. North Carolina
Total population: 9.7 million
Share of population 65+: 13.4%
Cost of living: 2.1% above average
Average income for 65+ households: $39,769
Retiree tax picture: Mixed
The mild winters and pretty scenery may not be enough to lure you into Tar Heel country. Typical household incomes in North Carolina don't track with the state's above-average living costs. The average for all households is $64,490, the second-lowest among the 10 states we examine here and 14.0% less than the U.S. average. Older residents fare even worse, with income for 65+ households falling 18.3% below average.
Poverty is a concern. Ten percent of seniors live below the line, versus 9.4% nationwide. More troubling, the poverty rate for the whole state is 17.5%, compared with 15.4% for the U.S. Property crime in North Carolina is above average.
As for taxes, besides Social Security benefits, which are exempt, most other retirement income is subject to tax. Effective in 2015, North Carolina switched to a flat income tax rate of 5.75%. There is no inheritance tax or estate tax, and older homeowners may qualify for a property-tax exemption.
5. Minnesota
Total population: 5.3 million
Share of population 65+: 13.3%
Cost of living: 3.6% above average
Average income for 65+ households: $41,991
Retiree tax picture: Least Friendly
The Land of 10,000 Lakes may drown retirees in taxes. Yet another of the 10 Least Tax-Friendly States for Retirees, Minnesota taxes Social Security benefits the same as the feds. Most other retirement income, including from military, government and private pensions, is also taxable. And the sales tax and income tax rates are high, at 6.875% and 5.35% to 9.85%, respectively.
Most older residents won't have to worry about those top tax rates. The average household income for Minnesotans 65 and older falls 13.7% below the U.S. average--and far beneath the thresholds for the highest tax bracket.
SEE ALSO: 11 Common Medicare Mistakes
Yet the state's cost of living is above average. According to health care research firm HealthView Services, lifetime health care costs for a healthy 65-year-old couple retiring this year and covered by Medicare parts B and D and a supplemental insurance policy total $403,562 in Minnesota. The U.S. average is $394,954. And the median home value for 65+ homeowners is $173,600, compared with $164,400 for the U.S.
4. New York
Total population: 19.5 million
Share of population 65+: 13.8%
Cost of living: 52.7% above average
Average income for 65+ households: $61,754
Retiree tax picture: Least Friendly
One pricey Big Apple spoils the entire Empire State. In 2014, the city reigned as the most expensive place to live in the U.S., with costs soaring 120.4% above the national average. New York also sports the highest living costs of any state in the country. No wonder, despite the above-average incomes of residents age 65 and older, the same age group suffers a poverty rate of 11.3%, worse than the national 9.4% rate.
Health care and housing are notably expensive in New York. A healthy 65-year-old couple retiring this year will face lifetime health care costs totaling $413,597, the most expensive on this list and 4.7% higher than average. New York has the second-highest median monthly rental costs for seniors after California on this list, according to the Census Bureau. And the median value of a home owned by someone 65+ is $270,600 in the state, compared with $164,400 in the U.S. Homeowners also face some of the highest property taxes in the country.
3. New Mexico
Total population: 2.1 million
Share of population 65+: 13.8%
Cost of living: 3.6% above average
Average income for 65+ households: $42,160
Retiree tax picture: Mixed
When it comes to taxes, the Land of Enchantment presents a lackluster reality to its retired residents. Social Security benefits are subject to tax, though at least some of the income can be included in an exemption allowed for people age 65 and older. There's also a statewide gross receipts tax (similar to a sales tax) of 5.125%. County and city taxes can add another 3.56%.
Other notable negatives: Safety may be an issue. For every 100,000 residents in New Mexico, there were 3,705 property crimes, including burglary and car theft, and 613 violent crimes, such as rape and murder, in 2013. (Comparatively, across the U.S., 2,731 property crimes and 368 violent crimes occurred per 100,000 people.) The poverty rate for older residents is also high at 12.1%, versus 9.4% for the U.S.
SEE ALSO: 6 Savvy Moves to Stretch Your Retirement Savings
If you're eyeing the Southwest for its sunny climate and multicultural vibe, check out Arizona, one of our 10 most tax-friendly states for retirees, instead. The Grand Canyon State does not tax Social Security benefits, prescription drugs or groceries, and its top income tax rate of 4.54% is lower than New Mexico's 4.9%.
2. California
Total population: 37.7 million
Share of population 65+: 11.8%
Cost of living: 34.7% above average
Average income for 65+ households: $60,440
Retiree tax picture: Least Friendly
Another one of the least tax-friendly states for retirees, the Golden State could be a foolish retirement choice. Except for Social Security benefits, retirement income is fully taxed, and California imposes the highest state income tax rates in the nation (the top rate is 13.3%). The current state sales tax of 7.5% is also daunting. The sales tax can reach as high as 10% in certain cities and counties that collect additional local levies.
If that doesn't burden your budget enough, living costs will likely add to the stress. The biggest state in the country bears the third-highest cost of living, behind New York and the District of Columbia. The median home value for those 65+ in California is $368,600, more than double the national median. Retirees who rent will fare no better: Monthly rental costs for renters 65 and older are the steepest in the nation.
1. District of Columbia
Total population: 619,371
Share of population 65+: 11.4%
Cost of living: 39.9% above average
Average income for 65+ households: $90,755
Retiree tax picture: Not Friendly
America's seat of power is no place to retire. Spanning just 68.3 square miles, the District's population is tiny, and only a small share of those residents are 65+--a total of 70,363 people. The median age in D.C. is a green 33.8 years old, compared with 37.3 for the U.S., which makes the metro area a better choice for new grads than for retirees.
The nation's capital has the second-highest cost of living in the U.S. after New York, and the greater metro area is among the most expensive in the country. Specifically for folks 65 and older, the median home value is $424,400, the highest on this list and second only to Hawaii. And though it boasts the highest average income for 65+ households in the country--the D.C. area is home to a great many millionaires--it also suffers a painfully high 14.0% poverty rate among seniors (tied with Mississippi for most impoverished). Violent crimes occur at 3.5 times the national rate, and the property crime rate is also higher than average.
High taxation (without representation, no less) is another deterrent. D.C.'s top income tax rate is 8.95%, among the highest in the country, according to the Tax Foundation. The sales tax is 5.75%. One bright spot on taxes: Social Security benefits, as well as up to $3,000 of military, federal and D.C. pensions, are tax-exempt.
Culled from kiplinger in yahoo finance
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