As they approach retirement𓂃, many U.S. residents co🔴nsider moving somewhere new.

According to U.S. Census data, 374,000 people ages 65 and older moved states in 2022. In search of cheaper health care, greater tax breaks, or more temperate weather, retirees in the United States are willing to move in order to be more comfortable 澳洲幸运5开奖号码历史查询:during retirement. But how much does it real﷽ly cost to retire in the U.S.? 

Compiling data from the Council for Community and Economic Research (C2ER), the U.S. Census Bureau, and the U.S. Bureau of Economic Analysis, Investopedia created the Investopedia Retirement Index. It evaluates the 澳洲幸运5开奖号码历史查询:cost of living, tax burde🌠ns, and proportions of people ages༒ 65 and older in each state.

Through this index, Investopedia uncovered the states that have the lowest taxes and costs of living, and the highest proportion of people ages 65 and older, helping you make an informed decision about 澳洲幸运5开奖号码历史查询:where you should really retire in the U.S.

Most Cost-Effective U.S. States for Retirement

The following states, in order, are the 澳洲幸运5开奖号码历史查询:best states for retirement within t🐠he U.S., ✱based on our money-focused index:

1. Tennessee
2. Florida
3. Wyoming
4. South Dakota and Missouri (same score on the Retirement Index)
5. Alabama

These locations in the U.S., in order,♐ rank lowest in the fe﷽atured factors:

1. Washington, D.C.
2. Hawaii
3. ​​California
   

U.S. Retirement Costs

In the U.S., the financial burden of retirement is growing. More older adults have carried mortgage debt into retirement and health care costs have risen, among other factors. As a result, the cost of living, tax burden, and age proportions of an area have become more and more important, especially for those looking to 澳洲幸运5开奖号码历史查询:move in their retirement years. Here, we break down these factors and how they imp🎐act where individuals choose to live in retirement.

When reviewing this data and information, note that the state-specific index scores range from 83.4 to 138.9, from most to least cost-effective—the lower the score, the better. St🎶ates with scores below 100 are considered more cost-effective than average, and all scores above 100 are considereꦐd less cost-effective than average.

Cost of Living

In the Investopedia Retirement Index, cost-of-living evaluℱations include:

• Food
• Housing
• Utilities
• Transportation
• Health care
• Miscellaneous goods and services (such as the cost of a haircut in the area)

Although the index does not include the quality or quantity of each component, these expected costs can help you project how much you will need to budget during retirement to ensure that you don’t outlive your retirement savings.

澳洲幸运5开奖号码历史查询:🌌Health care costs are an important element of the cost of living, especially for retirees. Individuals age 65 or older account for over 35% of health spending, despite only making up 17% of the total U.S. population. Moreover, in 2022, a recorded one in four adults age 65 or older had to cut back on another basic need, such as food, clothing, and utilities, to accommodate health care costs.

Overall, Mississippi has the l🔯owest average cost of living: 82% of the average cost of living across the whole of the U.S. Meanwhile, Washington, D.C.’s average cost of living was 149% of the national ave🅷rage and Hawaii’s was 139%. 

Tax Burden

When 澳洲幸运5开奖号码历史查询:planning for retirement and deciding where to live, taxes are another 澳洲幸运5开奖号码历史查询:state-variable factor that can take a major✤ toll o🌳n your retirement savings.

澳洲幸运5开奖号码历史查询:Income tax is especially relevant to retirement planning, as it can affect withdrawals and distributions from tax-deferred retirement plans, such as 澳洲幸运5开奖号码历史查询:traditional 401(k)s, 403(b)s, 澳洲幸运5开奖号码历史查询:traditional in🔴dividual retirement accounts (IRAs), and 澳洲幸运5开奖号码历史查询:pension plans.

In addition to income tax, Investopedia included property tax and 澳洲幸运5开奖号码历史查询:sales tax when determining the whole ♎impact of tax within the 🃏Retirement Index.

Alaska has the lowest tax burden of any U.S. state by far, with its taxes being 56% of the national average. New Hampshire has the second-lowest score, with only 64% of the national average tax burden. 澳洲幸运5开奖号码历史查询:The high♋est taxes can be found in Ne꧋w York and Hawaii, where they are 137% and 135% of the U.S. average, respectively.

Resident Age

Resident age is another important factor when deciding where to live, as one’s personal preference of who they surround themselves with in retඣirement can vary.

Many older adults in the U.S. have an increased risk for loneliness and social isolation due to high rates of living alone, loss of friends and family, and chronic illness. Where an individual lives can have an impact: Depression is shown to affect about 1% to 5% of older adults living in general communities, 13.5% of older adults who require home health care, and 11.5% of older adults who are hospitalized.

Maine, Florida, and Vermont have the highes⛄t proportions of residents age 65 and over as of 2022.

• 22.5% of people in Maine are age 65 and over.
• 21.6% of people in Florida are age 65 and over.
• 21.6% of people in Vermont age 65 and over.

Meanwhile, Utah is the state with the smallest proportion of residents age 65 and over: only 12.0%.

More About the Top States

Tennessee

Considering tax burden, resident age, and cost of living, Tennessee is the top state to retire, with a score of 83.4 on the Investopedia Retirement Index. Tennessee’s taxes are 69% of the national average, while the cost of living is 86% of the national average. Plus, the state has more people ages 65 and older than the national average.

Florida

Florida is the second-best state to retire in, with an index score of 83.6, largely thanks to below-average tax burdens. The 澳洲幸运5开奖号码历史查询:cost of living in Florida is on par with♛ the national average, and it has 22% more people age 65 and older than the national avera🍌ge.

One of Florida’s biggest retirement perks is its 澳洲幸运5开奖号码历史查询:homestead exemption. If you buy a residence in Florida, up to $50,000 of your home’s value may be 澳洲幸运5开奖号码历史查询:tax-exempt.

The state also receives the most retirees of any state, with an annual increase of 53,150 residents age 65 and over flocking there from 2015 to 2019, according to the U.S. Census Bureau.

Wyoming

Wyoming is the third-best state to retire in, based on our index, with a score of 87.7. While Wyoming’s cost of living is only 2% less than the national average and the state has only 4% more residents ages 65 and older than the national average, when it comes to taxes, it wins: The state does not have any income tax, and it has only 65% of the national average tax burden.

South Dakota and Missouri

South Dakota and Missouri are two of the best U.S. 澳洲幸运5开奖号码历史查询:states to retire in, and both have an Investopedi♏a Retirement Index score of 87.8.

While famous for Mount Rushmore, South Dakota also features a co🧸st of living that is 7% below the national average, a tax burden of 26% below the national average, and a proportion of residents ages 65 and older that is 4% above the national a🍷verage.

According to the Investopedia Retirement Index, Missouri’s cost of living is 16% lower than the national average, its tax burden is 11% lo෴wer tওhan the national average, and the proportion of people ages 65 and older is 5% greater than the national average.

Alabama

Alabama is one of the best places to retire in the U.S., with an Investopedia Retirement Index score of 88. Alabama’s cost of living is 13% below the national average, its tax burden is 14% less than the national average, and the proportion o𝕴f people ages 65 and older is 5% greater than the national average.

Alabama notably has the lowest property tax of any contiguous U.S. state at 0.40%, making it a target retirement destination for people wanting to move for retirement.

Retiring in the U.S. vs. Retiring Abroad

While many may find it more convenient to live in the U.S. during retirement, 澳洲幸运5ღ开奖号码历史查询:some retirees have started living abroad. Living abroa𓄧d can provide cheaper housing, more convenient health care, and a change of pace in lifestyle from living ✤in the U.S.

When deciding whether or not to live abroad, many retirees consider visa requirements, residency establishment, taxes and 澳洲幸运5开奖号码历史查询:Social Security, personal 澳洲幸运5开奖号码历史查询:health care needs, and proximity to family and friends, among other factors. Regardless of whether you decide to live abroad, move states, or stay put in your retirement, make sure to evaluate your personal needs and preferences, in order to determine what place makes꧋ the most sense for you.

The Bottom Line

More and more U.S. residents are 澳洲幸运5开奖号码历史查询:moving🌊 states to settle for retirement, driven by many crucial factors, including the✱ cost of living, tax burden, and resident age. All have significant impacts on your financial, social, and phಌysical well-being.

While the results of the Investopedia Retirement Index can be a helpful guide, it’s important to do your own research when♎ deciding where to retire. Regardless of where you decide to live in retirement, make sure to evaluate your personal needs, wants, and financial situation, as well as do some prelimin꧅ary research when making the decision.

Methodology

Note: Our index is driven by statewide averages, and the precision of the averages will vary when compared to specific areas in the state. For example, urban areas often have higher costs of living and taxes than state averages, while rural areas often have lower financial burdens.

For the Investopedia Retirement Index, cost of living accounts for 50% of the index, tax burden accounts for 30%, and resident age accounts for 20%. A score of 100 on the Investopedia Retirement Index represents the national average across these three factors in the rat꧅ios we selected, and the index scores of all 50 states range from 83.4 to 138.༺9, from best to worst.

𒁏Cost-of-living data was sourced from the . Property, income, and sales tax data were calculated as the proportion of property, sales, and gross receipts, and individual income taxes of each state’s personal income. Tax data were sourced from the . Personal income data was sourced from the from 2021.

Reඣsident age data were sourced from the from 2021.✅