One of the most important decisions you will make when preparing for retirement is where you will live. And while a significant percentage of pre-retirees may choose to age in place, or simply downsize, many others see this as an opportunity to make a big change like moving to another state.

Maybe you’ve always dreamed of living in a different climate? Or buying a home where you’ve enjoyed vacations?

You may consider moving closer to family, especially grandchildren if they’re not close enough to spend quality time with? Or you would like to find a community of peers to build relationships and share common interests?

Whether your decision means staying in your current home or a change of scenery, you’ll want to at least familiarize yourself with the best states to retire in on the list below.

My list of the 10 best states to retire in were chosen in part for their affordability and in part for the tax benefits they offer. Having the necessary funds to really enjoy the retirement of your dreams may require just that—a lower tax and lower cost of living state.  

Maybe a move to one of these states, or if you’re lucky enough to already live in one, can help you do just that . . . really enjoy the retirement you’ve always dreamed of.

The 10 best states to retire in for taxes & lifestyle

There are significant advantages to living somewhere with tax benefits. No state income taxes and no inheritance/estate taxes could equal huge savings for the savvy retiree!

Living in a state with little or no sales tax and low to moderate property tax can also translate into a huge bump in your monthly budget. And if leaving a legacy is important to you, it will help you keep more of your hard-earned retirement funds for your beneficiaries.

Of course, taxes aren’t always the most important aspect to consider. So to make my list of the 10 best states to retire in for taxes I also looked into lifestyle factors such as:

  • the cost of living (basic affordability, housing)  
  • health (access to care, quality, and general overall health),  
  • the median home price
  • and the general quality of life (which of course is very subjective)

Without a doubt, some states could be moved up or down the list for a variety of reasons. One person’s ideal paradise could be another’s nightmare!

At the bottom, I included the states that consistently appear in the top 10 of almost every different list of the best states to retire in out there.

1. Florida—The best state to retire in

It’s really not a surprise that Florida ranks so high as a choice for retirement living. The climate of Florida with its warm weather and mild winters attracts 1,000 new residents every day. 

Florid is the #1 best state to retire in for taxes and lifestyle!
Florid is the #1 best state to retire in for taxes and lifestyle!

Persons 65 years and over make up 20.5% of the population; which is ranked 4th in the US for overall population, behind California, Texas and New York.

Florida caters to the outdoor enthusiast with boating, fishing, and more golf courses than any other state—over 1,250!

For the traveler, Florida is itself a popular vacation destination and also offers ample access to airports, cruise ship ports, and amusement parks.

Kiplinger magazine said of Florida, “Florida is among the tax-friendliest states in the country for retirees. There is no state income, estate or inheritance tax. 

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value- per Zillow
#28#29$235,900

Florida property tax averages 0.93-1.02%, which is below the national average of 1.19%.

So if you want one of the best states to retire in for taxes, definitely check out Florida because for most retirees the lifestyle is a huge plus also!

2. Georgia—The 2nd best state to retire in

Georgia also ranked high as an ideal choice for retirees.  Georgia is the 8th most populous state in the US, with nearly 14% of the population being 65 and older.

Georgia is the 2nd best state to retire in thanks to low taxes and four seasons
Atlanta, Georgia, USA downtown and midtown skyline at dusk.

Georgia’s climate has 4 temperate seasons with summer temperatures averaging 80 degrees, and winter temperatures usually in the ’40s.

In Georgia, you have your choice of living in the mountains, near a beach, or in the large metropolis of Atlanta. There’s something for everyone!

Sports enthusiasts will enjoy that Georgia is the home to the Masters Tournament, The Nascar Sprint Cup Series, The Falcons, and The Braves (Oh and them Dawgs, but I’m a Sooner so we don’t talk about that :).

And major transportation hubs make it easy to travel. Hartsfield-Jackson International Airport is known as the busiest airport in the world.

Georgia is ranked high for being tax-friendly to retirees. Social Security income is tax-exempt, and most types of retirement income if your 62 or older. Plus they have a favorable income tax rate.

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value- per Zillow
#11#39$189,500

3. Pennsylvania—3rd best state to retire in

Also, ranking high on our list is Pennsylvania. A state that offers a wide range of lifestyles for the 18% of its population that is over 65 years old.

Pennsylvania is the 3rd best state to retire in
One of the many beautiful waterfalls found at Ricketts Glen State Park in Pennsylvania.

In Pennsylvania, you will find the Pocono mountains for skiing, hiking, kayaking. You’ll also find a rich Amish heritage, plus Philadelphia and Gettysburg which offer rich historical presence with their roles in the revolutionary and civil wars.

The major cities draw in cultural events, sports, and entertainment.  And Washington DC and New York City are in very close proximity.

Pennsylvania has hot summers, temperatures averaging 85 degrees, and cold winters with temps averaging 25 degrees.

In Pennsylvania, Social security benefits and retirement plans and pension withdrawals are exempt from taxes. Sales tax is low at 6% with food and clothing exempt from sales tax.

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value- per Zillow
#30#21$173,800

Property taxes in the Keystone state range from 0.9-2%. 

4. New Hampshire—4th best state to retire in

New Hampshire offers year-round outdoor fun and four distinct seasons.  Think skiing and hockey in the winter, apple picking and colorful foliage tours in the fall, farmers markets and antiquing, and beautiful coastlines to enjoy in the spring and summer.

New Hampshire is the 4th best state to retire in
Sunset from Kancamagus Pass, on the Kancamagus Highway in White Mountain National Forest, New Hampshire.

That is a lot of charm to offer for someone looking to relax and get out of the rat race. No wonder over 18% of the population in New Hampshire is 65 years and over. 

Plus, Social Security benefits, pensions or retirement distributions are not taxed and there is no sales tax.

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value- per Zillow
#36#16$278,400

Property tax here averages 2.19%. New Hampshire is a good example of a state that has a lot to offer in terms of quality of life which is why it ranks higher on my list even though it has a higher cost of living. However, it is not as expensive as some other attractive east coast retirement options. 

5. Washington—5th best state to retire in

The natural beauty of Washington, which boasts over 3,000 miles of coastline and two major mountain ranges, makes moving to Washington an easy choice for nature lovers and active retirees.

Washington is the 5th best state to retire in
Seattle, Washington, USA downtown skyline at night with Mt. Rainier.

The Pacific Northwest region is a tough place to beat when it comes to the quality of life and superb beauty—from Oregon up to British Columbia, Canada. 

Over 15% of the population is 65 or over and they enjoy access to the major metropolitans of Seattle and Spokane, both of which offer the benefits of large city living, such as sports teams, cultural activities and thriving food scenes.

Washington is known for its temperate climate and wet winters. Temperatures range from high 70’s to low 20’s throughout the year. 

Washington is known as being tax-friendly to retirees. There is no social security tax and income tax is favorable. No state income tax means that income from pensions, social security and retirement account withdrawals are tax-free.

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value- per Zillow
#37#4$388,400

Living in the western part of the state, especially close to Seattle, will absolutely make for a high cost of living situation.

However, it just may be worth the additional costs or you could look to nearby areas such as Tacoma (if you desire a city) or Snoqualmie (for a more rural atmosphere) for lower cost of living without making other major sacrifices. 

Property taxes hover around 1% for the state.

6.South Dakota—6th best state to retire in

South Dakota boasts a variety of National and State Parks, fishing lakes, wineries and historical sites. These can be enjoyed year-round, as South Dakota’s climate is host to all four seasons.

South Dakota is the 6th best state to retire in
Vintage toned panoramic picture of a scenic road at sunset, USA.

The temperatures range from the ’90s in the summer to 10 degrees in the winter (not what most retirees are looking for!). 17% of the population is home to residents 65 years and older.

South Dakota has no state income tax, no inheritance/sales tax, and low sales tax 

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value- per Zillow
#29#32$191,400

Actually, many publications put South Dakota as the #1 state to retire. Its winter weather ranking is probably in the lower 5 of the 50 states, however. 

Average property tax for the state is 1.2%

7. Nevada—7th best state to retire in and my favorite!

Home to beautiful Lake Tahoe, Lake Mead, Tule Springs Fossil Beds National Monument.

Nevada is the 7th best state to retire in
Unique boulders and colorful blue and turquoise water near Chimney Beach, Lake Tahoe, Carson City, Nevada

Home to beautiful Lake Tahoe, Lake Mead, Tule Springs Fossil Beds National Monument.  

Las Vegas and Reno. What many people don’t know about Nevada is that it is actually a giant outdoors playground for adults. Outdoor activities in Las Vegas area are quickly dismissed by many due to the reputation of The Strip.

However, within a short drive of Las Vegas area the Red Rock mountains (a 10 min. drive), Valley of Fire (~60 min drive), the Colorado River (30 min drive), Mount Charleston (around 60 min.) and beautiful southern Utah (about 2 hours away). 

The summers are hot, but many people love that and the winters are hard to beat! Many new retirees choose Henderson (minutes from Las Vegas proper) to retire as well.

The 65 and over demographic makes up 16% of the population. 

No state income tax, no estate or inheritance tax

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value- per Zillow
#38#31$292,600

The state’s property tax averages below 1% as well.

8. Wyoming—8th best state to retire in

Yellowstone National Park, The Grand Tetons, rodeos and Old Mining Towns are the heart of Wyoming. 

Wyoming is the 7th best state to retire in
Ein Ausschnitt der Grand Prismatic Spring aufgenommen vom “Overlook” im Yellowstone Nationalpark zeigt die Quelle mit ihrer unwirklich bunten Palette an Farben.

Living in Wyoming will allow you to enjoy four seasons of the Cowboy State.

If you are an outdoors enthusiast and love open spaces, Wyoming could be a great place to retire. It isn’t all rural though as the state also has plenty of retirement communities if you would enjoy that set-up more. 

Other benefits include very low crime rates (5th lowest in the nation) and low effective tax rates. The 65 and over age group accounts for 16.5% of the state population. 

No state income tax, no estate or inheritance tax, and low sales and property taxes

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value-per Zillow
#10#42$226,200

The average property tax in Wyoming is around 0.6% which is incredibly low!

9. Texas—9th best state to retire in

There’s a lot to explore in Texas! Big Cities, the Plains, the Gulf Coast . . .  on and on!

Texas is the 9th best state to retire in
Panoramic view of pasture filled with bluebonnets and Indian Paintbrush with Yucca plant

The 65 and over group is the fastest-growing population in Texas and accounts for up to 15% of the overall population.

There never seems to be a dull season in Texas either. The state has plenty of sporting events, county fairs, concerts, and city celebrations. Its location is why some of its airports are national hubs, so traveling to anywhere in the world would be no problem at all. 

Most of Texas offers a warm climate, and you would have access to the Gulf of Mexico beaches that extend through the states eastern side.

Texas tax treatment is rather favorable with no social security tax and no income tax however sales tax is around 6.25%.

Cost of Living Rank- per US NewsHealthcare Rank- per Us NewsMedian Home Value- per Zillow
#12#37$196,900

Property taxes in Texas are on the higher side in the nation, at around 1.86%.

10. Mississippi—last on my list of the best states to retire in

Mississippi is arguably the cheapest state to live in, ranking #1 for the cost of living.  That may be a big draw for the nearly 16% of the 65 and over population that calls Mississippi home.

Mississippi is the 10th best state to retire in
Vintage paddlwheel steamboat painted in old-fashioned American

Many people may hold misconceptions about the state such as there is widespread poverty with very little attractions. However, Mississippi has some absolutely stunning scenery and very popular beaches. Likewise, there are many outdoor activities to be involved in such as at the beach, hiking, or fishing on one of its many rivers.

If you want to learn more about retiring in Mississippi, you can read this official page for more information. 

Plus, in the state of Mississippi, there is no estate tax/inheritance tax and income tax is low. Retirement income from typical retirement accounts such as IRAs or 401(k) is also not taxed.

Cost of Living Rank- per US NewsHealthcare Rank-per Us NewsMedian Home Value- per Zillow
#1#50$127,600

These states consistently appear in the top 10 best places to retire on most lists

As I mentioned above, there may be states that could be higher or lower on the list or not included in all. If you search for other lists on the best places to retire, you will undoubtedly find different results.

However, I think that you will agree that on almost all the lists, these states always rank high:

  • New Hampshire
  • Florida
  • Georgia
  • The Dakotas
  • Pennsylvania

So if you looking for a great state to retire in, it might be worth starting your research with these states, which consistently rank very high in almost all of the lists. 

Happiness is the priority

Taking care of your money and keeping the majority of it for you and your family is certainly a priority. But don’t underestimate the need to establish a living situation that creates a positive mental health state. Happiness and healthiness can be much more important than tax considerations!

No matter where you live, you should be able to make a plan for a successful retirement in all realms (taxes, income, weather, low crime, and a variety of activities). If you don’t have a plan, you owe it to yourself to come up with one.

Talk with your family and find a fee-only fiduciary financial advisor so that you can make your goals known and start on a path toward fulfilling those goals.  

Additionally, if you do find a great financial advisor have them run the retirement plan scenarios for each of the finalist states you’re looking at. I’ve done that in the past with clients and was easily able to point them to the absolute best state to retire in for taxes and specifically for their personal retirement plan.

Sources:

Kiplinger’s August 2019 edition-  10 Smart Places to Retire article

https://smartasset.com/retirement/retirement-taxes?year=2019#us/retirement-income-tax

https://www.retirementliving.com/top-10-most-tax-friendly-states

https://www.zillow.com

https://www.census.gov/quickfacts/fact/table/TX/PST045218

https://www.stateofflorida.com/florida-information.aspx

https://www.georgia.org/

http://www.rssweather.com

https://www.visitnh.gov/

https://access.wa.gov

https://www.usnews.com/news/best-states/rankings/

https://www.elderoptionsoftexas.com/texas-aging-population.htm

https://www.travelsouthdakota.com/

https://travelnevada.com

https://www.travelwyoming.com

https://www.greatretirementspots.com/short-profiles-henderson-nevada.htm