10 Best States to Retire to in the U.S.

By Adrienne McIlvaine and Ethan BrightbillLast Updated Jul 11, 2020 9:59:54 PM ET
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The best place to retire depends upon many factors. How much Social Security will you receive? Do you want to be close to family? What hobbies and interests will you want to pursue? While the high cost of living in coastal states like California and New York can make it difficult to live on a fixed income, there are plenty of fantastic places to retire in the West, Midwest, South and more. 

These 10 states offer retirees everything from special tax deductions to quality affordable health care. If you’re planning for retirement, you could find that these states have everything you need.    

Arizona

If you’ve spent your entire life enduring freezing cold winters, Arizona can be a welcome respite. While there are a few places in the state that receive a fair amount of snow, such as Flagstaff and Williams, much of the state averages only a couple inches per year — or none at all. Temperatures in summer often range between 90 and 120 degrees, however, so be sure to invest in air conditioning.

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The country’s very first planned retirement community, Sun City, is located just outside Phoenix. Scottsdale also has one of the highest percentages of people over 65 in the country, and the state’s desert climate allows retirees to golf and enjoy other outdoor activities year-round. The state also has plenty of national parks and monuments to explore, like the Grand Canyon, Red Rocks and more. 

Arizona does collect income tax. However, at 2.59 to 4.50 percent, the rate is still low compared to much of the country, as are property and gas taxes. However, sales tax varies between 5.60 and 11.20 percent, making Arizona the 11th highest state for sales tax.

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Florida

It’s no surprise that Florida made this list. The state boasts beautiful weather year-round and incredible beaches to sip mojitos on. Florida has no income or estate taxes, and only Maine has a higher percentage of citizens over 65. Eight of the top 10 cities in the United States with the largest percentage of people over 65 are also in the state, including the top six. Needless to say, senior citizens have a lot of say in Florida as a result.

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There are some drawbacks to retiring in Florida. Although the gorgeous weather is a huge draw, the state also experiences short yet frequent thunderstorms, and it’s no stranger to hurricanes. Flooding is becoming more and more of an issue due to rising sea levels caused by climate change, and your insurance rates may go up as a result.  Florida is no stranger to devastating hurricanes and is at the center of the climate change conversation with cities like Miami facing rising sea levels. It also has a wildlife problem, with everything from native alligators to invasive boa constrictors occasionally causing problems for residents.

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Nonetheless, with Disneyworld, the Florida Keys, golfing, bustling cities like Miami and more, there’s plenty to do in Florida. Combined with the state’s senior benefits, it’s no wonder that Florida remains such a popular retirement destination.

Colorado

Colorado is yet another alpine wonderland that’s ideal for retirement. For those who love living close to nature, Colorado’s proximity to mountain ranges and extensive national parks can’t be beat. The state also ranks highly in life expectancy, providing its residents with preventative care and a healthy living environment.

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While Colorado can have a fairly high cost of living, it’s similar to Virginia in that many of its towns are much cheaper than more famous cities like Boulder. On top of that, Colorado offers some distinct tax benefits. Rather than taxing retirement income, qualifying pensions and annuities are excluded up to $20,000 for adults ages 55 to 64 and $24,000 for anyone 65 or older. There’s a also a 50 percent homestead exemption on primary residences once a person had live in the state for at least ten years.

Virginia

Virginia isn’t exactly as common a retirement choice as Florida, but the state is nevertheless a solid choice with plenty of cultural and recreational opportunities. From historical cities to beaches and the Blue Ridge Mountains, Virginia has something for everyone.

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Granted, it can be quite pricey to live directly in some of Virginia’s most popular destinations. However, for every expensive Williamsburg, there’s a cheaper Virginia Beach or Norfolk, so this downside can be avoided. On top of that, Virginia has some of the lowest overall tax rates in the country. While crime rates are high in nearby Washington D.C., Virginia itself has the fifth-lowest crime rate and third lowest violent crime rate in the country.

South Dakota

Warm weather is great, but it’s by no means the only thing to look for in a place to retire. South Dakota may lack warm beaches, but the lack of income tax, affordable cost of living and booming economy means that it’s easy to live well in the state and even keep working if you wish. At 17.2 percent, a fair portion of the population is also over 65. The state attracts retirees with its friendly residents and sense of community.

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It’s true that the weather in South Dakota can be intense, with hot summers and cold winters. The southeast portion of the state is also at the upper end of Tornado Alley, with strong winds being the norm due to the lack of mountains or trees in the area. Travel can also be an issue. While an advanced telehealth system means healthcare isn’t an issue, you’ll still have a long drive to the airport in most parts of the state, and flights aren’t cheap.

Even so, with beautiful scenery and national parks, great hunting and fishing and local culture, there’s a lot to keep retirees active and invigorated. While most of the state is fairly empty, Sioux Falls also boasts a modest population of more than 150,000 for those who are less enthusiastic about small-town living.

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Utah

Utah might not be on many people’s radar as a place to retire, but it should. With a diverse climate that includes deserts in the south and mountain forests in the north, Utah has climates for sun and snow lovers in equal measure. With more national parks than any state except Alaska and California, other natural sites like Monument Valley and the Great Salt Lake and no shortage of ski resorts, Utah is a great place for an active retirement.

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State income tax is 5 percent, and most other taxes are fairly middle of the road. However, Utah is one of 14 states that taxes Social Security Income, and the average cost of living is slightly higher than average. Even so, the strong economy and low unemployment rate mean that working in retirement isn’t difficult. 

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Southern cities like Moab and St. George are best for retirees who are done with snow and winter, while winter sports enthusiasts can hit the mountains around Ogden and Logan before retreating down into the valleys for less harsh weather. Meanwhile, Salt Lake City city offers a (fairly) big city experience and easy and affordable air travel wherever you might need to go.

Idaho

Like South Dakota and Utah, Idaho boasts a wealth of natural wonders and good conditions for seniors looking to retire. Out-of-staters have been flocking to Idaho in recent years for a number of reasons, so you won’t be alone in being a newcomer to the area. Fortunately, Idaho has a culture of friendliness that makes it easy to get to know your neighbors.

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Although Idaho does get its share of snow, it also has low sales and property taxes, and Social Security isn’t taxed at all. However, if you plan on relying on money from savings accounts, such as a 401(k), the tax rules aren’t quite as favorable. Even so, the state’s economy continues to expand, and that means it’s likely to continue attracting people from elsewhere in the country — and their wealth — for years to come.

New Hampshire

If you imagine spending your retirement with a mix of cool summer nights, beautiful fall colors and cozy winters spent with hot chocolate by the fire, New Hampshire might be just what you’re looking for. The small size and location of the state mean you’re never far from mountains, lakes, beaches, hospitals, colleges,  local cities like Manchester and Concord and big metropolises like Boston. 

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Of course, there are a few other things to consider when looking at New Hampshire as a possible forever home. The winters can be cold … very cold. In January, the temperature can get down to around 10 degrees Fahrenheit. Even in March, temperatures often fall below freezing.

One to two feet of snow is common. That’s great for skiing and other winter sports, but not if you’re looking for a warmer climate. In general, the northern part of the state is where winters can be the most brutal. And on the financial side: Property taxes and the general cost of living are higher than average.

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New Hampshire’s state motto is “Live Free or Die.” If you’re a free-thinking retiree who values independence, individuality and the great outdoors, the Granite State might be a great place to consider for retirement. Another plus is that New Hampshire has no personal income tax, so you can enjoy your Social Security benefits tax-free. Even better: The state does not levy a sales tax. Many New Hampshire residents also enjoy a strong sense of community in places like Keene, Concord and other retiree-friendly cities.

Wyoming

Similar to South Dakota, Wyoming offers a mix of majestic mountains and wide plains as well as easy living. With famed national parks and monuments like Grand Teton and Yellowstone not far away, you’ll be able to share some truly amazing pictures with friends and family. Of course, if you’re trying to get away from friends, family and everyone else, Wyoming can help with that, too — it’s the least populous state in the entire country.

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The weather in Wyoming can be intense. While snow isn’t as bad as you might expect on the plains, cold winters and hot summers are a regular part of life here. That said, Wyoming offers some serious financial benefits, even by the standards of neighboring states. Wyoming combines an affordable cost of living with an unusually low property tax, cheap real estate prices and no income tax.

Iowa

Iowa might not be the first state that comes to mind when thinking about retirement options, but it’s a good one for folks who wish to enjoy a comfortable quality of life and easy access to recreational and cultural activities.

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In general, Iowa has a low cost of living. There’s also a $6,000 tax deduction available to those 55 and older. Iowa doesn’t count Social Security as income, but it does have a personal income tax, which can run as high as almost 9 percent. Moreover, the state’s sales tax tops out at 6 percent. 

Folks accustomed to a more cosmopolitan environment may find life in Iowa a bit sleepy. Even so, the state offers plenty of opportunities for fishing, hiking and golfing along with volunteer organizations for those who enjoy being active in their community. The state is also great if you enjoy fine food and fresh produce. While Iowa has hot, humid summers and icy winters, it only receives a modest amount of snow.

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