Best States to Retire for Seniors

One of the most crucial decisions you may have to make as you age is choosing where to retire. You should analyze several factors before deciding on where to retire — from cost of living and tax friendliness to the climate, accessibility, senior population, and healthcare options. Your ideal retirement spot should also be able to accommodate your changing needs.

Where you retire can affect your quality of life in your golden years, so be sure to visit these places before settling in. Try your best to experience how the locals live so that you can get a better grasp on what it feels like to reside in that chosen state.  

Since retirement planning can get overwhelming, here is a guide on some of the best state for elderly benefits in the US. 

The Top States to Retire for Seniors in 2021

Each senior has his or her unique needs, so we have compiled as diverse of a list as possible to ensure that one of these states is a place you can see yourself retiring in. Take your time assessing these options, and you are bound to find a state that suits your preferences best.

*The composite cost of living per state is based on data from Statista, where the national benchmark is at 100. This was also calculated based on housing, utilities, grocery items, transportation, health care, and miscellaneous goods and services.

Best for Urban-Beach Life Balance: Florida

  • Average Cost of Living: 99.8
  • Tax Environment: No state income tax; Social Security benefits and retirement income is not taxed
  • Climate: Mild winters and over 200 days of sunshine a year

Florida is a great place to retire as it is the perfect balance between urban and beach life. Many surveys show how Florida has the highest rate of people aged 65 and above as residents — with one reason being its tax-friendliness. Florida also has several beaches, ranging from quiet refuges to active and exciting beach towns.

Since Florida has become somewhat a melting pot of seniors from all over the place, there are many opportunities for social interaction with people who are on the same page as you. If you choose to live in a retirement community, there is also a whole range of them to choose from in Florida.

Best for Continued Learning: North Carolina

  • Average Cost of Living: 96.1
  • Tax Environment: Flat rate for income taxes; Social Security benefits are not taxed; no state estate tax
  • Climate: Moderate climate and four seasons

North Carolina is another state with a great mix of city and urban life. Many of the state's landmarks and buildings still carry a historical, old-town charm, but there are also 300+ miles of beaches for those who want a refreshing break. The cost of living in North Carolina is lower than the nationwide average, especially for transportation, housing, and utilities.

There are tons of historical sites and parkways for seniors who want to continue learning and exploring. Upon availability, residents aged 65 and above can audit classes for free in some community colleges as well as the University of North Carolina. In some cases, you may even be able to earn college credits.

Best for Retirement Communities: Arizona

  • Average Cost of Living: 101.3
  • Tax Environment: Social Security benefits are not taxed; tax rates are relatively low; no inheritance or estate tax
  • Climate: Mostly clear and dry year-round

Arizona is known for being the first location in the US where the first adult retirement community was founded. Now, there are over 160 different retirement communities in the state. The city of Mesa is known to be one of the best places to retire, because of its renowned healthcare facilities and low cost of living. There are also other great hospitals across the state.

There is no shortage of activities you can do with Arizona, which is good news for seniors who are on the more active side. You can explore the Grand Canyon and its national parks, and even get a senior pass for this.  

Best for History and Culture: Tennessee

  • Average Cost of Living: 189.7
  • Tax Environment: No inheritance or estate taxes; no income tax; low tax burden; no capital gains tax on retirement income
  • Climate: Hot summers and mild winters

Tennessee is very attractive to retirees as it has both small towns and big cities, with retirement communities located all over the place. The cost of living in Tennessee is also quite affordable, and new properties are being developed in different cities as well. The state is picturesque, with lakes, mountains, and other natural landscapes for your enjoyment.

Tennessee is also rich in history and culture, and music and art lovers will get to soak up all of this if they choose to retire here. One of the top hospitals in the country, Vanderbilt University Medical Center, is also located in the state.

Best for Aspiring Homeowners: Georgia

  • Average Cost of Living: 89.7
  • Tax Environment: Social Security benefits and pension payments are not taxed
  • Climate: Mild climate

Many seniors actually choose to relocate to Georgia from Florida to retire, and are referred to as “halfbacks.” Seniors flock to Georgia for their retirement, and one reason is that its median home prices are much lower than the national average. Those who are 65 and above can deduct a maximum of $65,000 in their retirement income as well.

Lots of the housing projects these days in Georgia are actually catered towards those who are over 60. Retirees in Georgia are also very racially diverse, allowing you to find a community where you feel like you belong. 

Best for Small Town Feel: Michigan

  • Average Cost of Living: Average cost of living: 90.6
  • Tax Environment: Social Security is not taxed; tax-friendly for retirees
  • Climate: Has all four seasons but long winters

Many locations in Michigan, from Ann Arbor to Grand Rapids, are wonderful places to retire. The city is vibrant and exciting, with many opportunities for culture and learning. In fact, many employees of the University of Michigan choose to retire here. The state’s healthcare system is also renowned, which can be a big draw for seniors concerned about their health.

Michigan has that small town feel and Midwest vibe, which can be great for seniors looking for something different. Ann Arbor, in particular, is also known to have a favorable score on the happiness metric. 

Best for Veterans: Missouri

  • Average Cost of Living: Average cost of living: 89.1
  • Tax Environment: Fully exempt Social Security retirement income; 
  • Climate: Extreme temperatures

Missouri is one of the most underrated places to retire, but it is also one of the most affordable — especially if you want to rent an apartment. The cost of living in this state is roughly 16% below the nationwide average. It is also very taxpayer-friendly. Missouri is a great place for veterans to retire as they can claim several benefits and find housing specific to their needs.

In addition to this, there are a few highly ranked hospitals in the state, with St. Luke’s Hospital and Barnes-Jewish Hospital specializing in adult and geriatric care. 

Best for Various Types of Living Options: Texas

  • Average Cost of Living: Average cost of living: 92.0
  • Tax Environment: Social Security benefits and retirement income are not taxed; no state income tax
  • Climate: Generally warm weather and mild climate

Since Texas is the second-largest state in the US, there are a variety of different living options. You can choose to retire by the mountains, coastal areas, bustling towns, calm suburban areas, and retirement communities. You can retire in Texas on a budget, and its tax climate is friendly for seniors. 

If you want to become a homeowner, properties here are also more affordable. Texas also has many jobs for seniors who want to explore new careers, and some of the best hospitals to ensure that you are able to monitor your health accordingly.

Frequently Asked Questions

Which states do not tax pensions and Social Security? 

There are a total of 14 states that do not tax pension income: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming New Hampshire, Alabama, Illinois, Hawaii, Mississippi, and Pennsylvania.

Which state is the most tax-friendly for retirees? 

Delaware is the most tax-friendly state for retirees. This state has no sales tax and death tax, and property taxes are low. 

What state has no property tax for seniors? 

South Dakota has no property tax for seniors, and retired homeowners may be eligible for the state’s property tax relief programs. 

Do pensions count as earned income? 

Pensions are not included as part of earned income. Other amounts such as welfare benefits, unemployment compensation, worker's compensation benefits, or social security benefits are also not included. 

What state has the best climate? 

California has the best climate out of all 50 states. This state doesn’t experience any harsh winters or snowstorms, and there’s plenty of sunshine that goes around. 

Choosing among the best states to retire for seniors can make a huge difference in your quality of life and overall satisfaction. Check out some of our other retirement planning guides for extra help in ensuring that you spend your golden years the way you deserve to.

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