Cassandra Happe
Cassandra Happe is an analyst with WalletHub and one of the authors of WalletHub’s “2024 Best & Worst Places to Retire” report. WalletHub has compiled retirement destination rankings annually since 2016. WalletHub.com
Based on Taxes, Cost of Living and Quality of Life
Nearly two of every three Americans are more worried about outliving their retirement savings than they are about dying, according to a recent survey by life insurance company Allianz. Where you live can play a significant role in how long your savings lasts—it can cost twice as much to live in an expensive state versus a low-cost one.
The absolute lowest-cost states for retirees are Alabama and South Carolina, with West Virginia, Arkansas, Alabama, Oklahoma and Mississippi also among the best places to limit retirement spending. But those states are all below average when it comes to two other factors that mean a lot to retirees—quality of life and health care. So, which are the best states to retire in 2024 when you consider all three factors?
5 Best Retirement States
5 Worst Retirement States
Here are the five states that offer the most appealing balance of the three key retirement factors—cost of living, health care and quality of life…
Retiring to Florida might be a cliché, but it can also be a great choice, and not just because of the warm weather.
Florida has no state income tax and no state estate or inheritance tax, and it does not tax Social Security benefits or retirement plan distributions. Florida’s overall tax burden—a figure that includes income, property, sales and excise taxes—is fourth lowest in the US, trailing only the cold-weather states of Alaska, New Hampshire and Wyoming. Florida’s overall cost of living lands in the middle of the pack—but the cost of key late-life services that can break retirement budgets, such as adult day care and in-home help, are among the lowest in the country.
Florida’s rising costs of housing and homeowners insurance are legitimate concerns, but empty-nest retirees shopping for small condos or bungalows typically are not hit as hard by these costs as are young families who require larger homes. Still, it’s wise to avoid regions of Florida that are particularly prone to hurricanes or floods.
Quality of life is where the Sunshine State truly shines. The huge number of retirees in Florida means that there also are lots of social and recreational options available to this demographic—the risk for social isolation among retirees is very low. Florida’s extensive retirement social networks are probably part of the reason why Floridians’ life expectancy at age 65 is among the highest in the country. The quality of Florida’s health care is good, though not among the nation’s very best.
Retirees in search of a state that combines elite health care with solid affordability should consider Colorado. The state has some of the country’s top geriatric hospitals, and retirement-age Coloradans are significantly more likely than their peers elsewhere in the US to be physically active and healthy. Social isolation rates are low for Colorado seniors. Colorado’s overall tax burden is below the US average. The state does tax Social Security benefits, but residents ages 65 and up qualify for an annual retirement income deduction of up to $24,000. Colorado has no estate or inheritance tax, and its property taxes are well below the national average. Overall cost of living is near the national average.
Concerned about Colorado’s winter weather? Despite the state’s high elevation and significant snowfall, it enjoys more sunny days than virtually any other state outside the so-called “Sunbelt”—it’s a solid choice for those who like sunshine.
Of all 50 states, Virginia is the only one to rank in the top 15 for each of the big-three retirement factors—affordability, quality of life and health care. Virginia’s cost of living isn’t exceptionally low overall, but the state-wide figures are skewed by the extremely high cost of living in the Washington, DC, metro area of northeastern Virginia—much of the rest of the state is quite affordable. Virginia’s tax burden is roughly average by US standards. It does not tax Social Security benefits or have a state estate or inheritance tax. The state offers very good health care, including highly regarded geriatric hospitals. The weather is mild, and violent crime rates are low—in fact, it’s hard to find any criteria important to retirees where Virginia falls short.
This tiny Mid-Atlantic state is a smart place for retirees who want to trim state tax bills down to size. Delaware isn’t a no-income-tax state like Florida, but its property and sales taxes are among the lowest in the nation…it doesn’t tax Social Security benefits…and there is no state estate or inheritance tax. Delaware’s overall cost of living is right around the US average—but that means it’s significantly more affordable than most states on the northern Atlantic coast. Homeowners insurance is particularly inexpensive in Delaware. Nearly 20% of the state’s population is 65 and older, so the risk of social isolation is low in retirement, and the poverty rate among retirement-age citizens is one of the lowest in the nation. Delaware isn’t known for excitement, and it’s a bit short on certain amenities popular with retirees, such as golf courses and country clubs…but it’s only a short trip from Delaware to a range of interesting northeastern US cities, and the weather is moderate. The state offers good-to-average health care for retirees at an affordable cost.
If you’re a fan of wide-open spaces but not taxes, the nation’s least-populated state is worth considering. Wyoming has no state income tax, no estate or inheritance taxes, low sales taxes, and does not tax Social Security benefits. But its property taxes are above average, and energy costs are steep in this cold-weather state. Wyoming’s crime rates are among the lowest in the country, and the state has impressively strong protections against elder abuse. While Wyoming’s population density is extremely low, its communities are tightly knit, with low rates of social isolation among seniors and very high rates of volunteerism. As in most rural states, Wyoming’s health-care quality isn’t elite, with average public hospitals and a low number of top-rated geriatric hospitals and geriatricians required to meet the estimated need of retirees. But the health-care quality is better than you might suspect for such a sparsely populated state—roughly on par with the Carolinas. Wyoming’s air quality is among the best in the country.
| Top 5 Retirement States | Cost of Living | Taxes | Health Care | Quality of Life |
| Florida | Average | No state income tax…no estate or inheritance tax…no tax on Social Security benefits | High quality/Low cost | Excellent |
| Colorado | Average | No estate or inheritance tax…Social Security benefits are taxed—but residents 65 and older qualify for a retirement income deduction of up to $24,000. | High/Affordable | Good |
| Virginia | Affordable | No estate or inheritance tax…no tax on Social Security benefits | High quality/Affordable | Good |
| Delaware | Average | No estate or inheritance tax…no tax on Social Security benefits | Good-to-average/Affordable | Average |
| Wyoming | Average | No state income tax…no estate or inheritance tax, no tax on Social Security benefits | Mediocre | Good |
It is possible to have a successful retirement in any state—even ones that have poor quality of life or health-care scores, such as the five below. But if you retire in one of the following low-ranking states, choose your hometown with great care. Pick one near the very best health-care facilities the state has to offer—even states with generally poor health care usually have at least one or two well-regarded hospitals. Make sure your town is engaging and close-knit and/or near your friends or family—retiring near people you love can go a long way to overcoming low quality-of-life scores.
Oklahoma fares very poorly on measures of retirement quality of life and health care. But the state is an affordable place to retire, with low taxes and relatively inexpensive services and real estate. Homeowners insurance is very expensive in Oklahoma, however, and other housing costs have been rising recently as well.
Rhode Island is an expensive place to live, like many other northeastern states. But unlike some other states in that region, Rhode Island doesn’t make up for its high costs with good quality of life or elite health care. On the bright side, better health care is available in neighboring Massachusetts and Connecticut.
Mississippi might seem like an appealing retirement state at first glance—it’s affordable, and the weather is warm. Unfortunately, it scores at or near the bottom of the rankings for both quality of life and health care. If affordability and warmth are the only factors that matter to you, Alabama and South Carolina are as warm but even more affordable.
New Jersey is among the least affordable states in the country, with steep taxes, expensive real estate and high prices for the services that retirees often require. While the quality of health care is very good in New Jersey, there are plenty of other states where retirees can find high-quality care without such high prices. New York and Vermont are roughly as expensive for retirees as New Jersey, but both those states earn higher quality-of-life scores.
Kentucky scores poorly for retiree quality of life and health care, much like Tennessee, just to its south, and West Virginia, just to its east. But unlike those neighboring states, Kentucky doesn’t make up for these shortcomings with elite affordability. It lands toward the middle of the pack in terms of taxes and other important cost-of-living factors. It’s the only state that landed outside of the top 30 for all three key retirement factors in WalletHub’s recent rankings.
