“Retirement should be relaxing, but it can also be very stressful given that it often places people on a fixed income, which may not be enough to live comfortably,” said WalletHub analyst Chip Lupo. “Because of this, the best states for retirees are those with low taxes and a low cost of living to help retirees’ budgets stretch as much as possible.
“Access to quality health care and home care services is also important, especially for people who are not planning to retire close to their families.”
Countries with a high cost of living may still perform well if they score high on access to health care or quality of life measures, the report explains.
Wyoming is setting the pace for the rest of the country
Wyoming scored highly for affordability and tax friendliness.
Geared toward the needs of retirees, its cost of living falls among the states’ most affordable segment. Wyoming also has no estate or inheritance tax, and ranks among the lowest in the nation for annual service costs for home aides, helping seniors maintain independence.
Aside from funding, Wyoming scored well on safety and social measures. The state ranked 10th in elder abuse prevention, had the fifth lowest rate of violent crime and ranked 14th in the share of citizens helping neighbors.
The financial security of Wyoming residents is also stronger than average, according to the report, with one of the lowest poverty rates for residents age 65 and older and the highest levels of government aged care.
Florida’s common complaint
Florida ranked second, cementing its longstanding reputation as a retirement destination.
The state levies no estate, inheritance or income tax, and receives one of the highest per capita funds under the Older Americans Act – support services such as transportation, food programs and home assistance.
Lifestyle factors also boosted Florida’s ranking.
The state has extensive coastlines, an abundance of volunteer opportunities and a large number of golf courses, theater companies and resorts.
These resources are consistent with Florida’s low death rate among residents 65 and older, even though its overall cost of living remains higher than many competing states, the study showed.
High quality health care in South Dakota
South Dakota ranked third, driven by tax benefits and strong health outcomes.
The state has no estate or inheritance taxes, a low poverty rate for seniors and one small share of older adults reporting poverty.
Access to health care stands out as a key strength. South Dakota has some of the nation’s top health care hospitals, the highest number of family medicine doctors per capita, and the lowest rates of social isolation or general depression among seniors, the data showed.
“While climate and geography are important factors to consider, retirees should prioritize evaluating the cost of living and tax burdens of that state,” tax attorney Lauren Haddad Washburn said in the report. “Ignoring these factors can cause retirees to incur higher costs than expected.” Retirees should also consider access to quality health care, as health care needs generally increase with age, access to social services and public transportation.
“Family closeness and the presence of caregivers are also important factors when considering long-term care needs.”
Environmental quality also plays a role, with strong air quality and fewer drinking water violations. WalletHub’s data reveals a stark contrast across the country.
Oklahoma ranked lowest in cost of living, while Hawaii ranked highest – representing a two-fold difference in costs. There are similar gaps in the cost of home services, with Louisiana being the least expensive and South Dakota being the most expensive.
Kentucky finished last overall, highlighting how limited affordability, poor health care access and poor quality of life metrics can combine to challenge the financial security of retirees.
