While many people do not consider relocating for retirement, some plan to find a cheaper place to live or one that has certain tax advantages to make their retirement dollars stretch further. Some even think about retiring internationally, but most consider the United States most conducive to retirement.
Each year, several different organizations rank the various states based on how amenable they are to retirees. Often, however, these lists do not agree, which can make it difficult for people to make a decision. Ultimately, the choice of which state is best for retirement depends on what you want out of retirement and your personal financial situation. Some of the states to consider include:
The Sunshine State is certainly known for being a prime retirement destination. The appeal of Florida lies in the many beaches and the chance to live close to, if not on, the waterfront. Plus, the state has a rich culture and lots of delicious cuisines, including incredibly fresh seafood.
On top of all this, Florida remains one of the cheapest options for retirees. There are several affordable spots along the Atlantic Coast and the Gulf Coast, not to mention some of the landlocked cities. Retirees especially like Florida because of its beneficial tax policies. The state has no income tax, estate tax, or inheritance tax. Even more importantly, Florida does not tax Social Security or other forms of retirement income.
2. New Hampshire
The Granite State may not be the first on the list for many people considering retirement destinations, but it has a number of key draws, from great health care to low taxes. Plus, the state has incredible mountain ranges and other natural attractions.
People can enjoy easy access to lots of New England destinations while paying much less than in nearby states. New Hampshire has no sales tax and no state income tax. Also, retirement income isn’t taxed. However, retirees with investment income will need to pay a 5 percent tax on dividends and interest payments.
3. South Dakota
Bankrate and Kiplinger both rank South Dakota the top destination for retirees, while WalletHub has it ranked number two. One of the drawbacks of South Dakota is the extreme cold, but for people who enjoy hiking, fishing, camping, and hunting, no other state can beat it. The state offers a charming, small-town life that provides enough activity to keep people from getting bored while also giving plenty of time for relaxation.
South Dakota has extremely affordable real estate, even in larger cities like Sioux Falls. Plus, the state does not tax Social Security benefits or pensions, nor does it have an inheritance or income tax. While there is a state sales tax, is it only 4.5 percent.
People who enjoy experiencing all four seasons should check out Virginia, which also offers everything from mountains to beaches. One of the biggest appeals of Virginia is the large number of festivals that are held throughout the state. Plus, the state is known for both horse and car racing. Virginia residents also have easy access to more than 200 vineyards.
Best of all, the tax benefits of living in Virginia are quite extensive. Retirees who are 65 or older can deduct up to $12,000 of income per person, and Social Security benefits are not taxed.
Utah is a prime retirement destination for people who want to be close to mountain ranges. Also, the state produces an overwhelming amount of local produce, so it is a great option for people who love to cook. The state has nearly 20 national parks, monuments, and forests, so there is almost always some exploring to do.
Utah is often ranked as one of the best states in the union in terms of health care. The University of Utah Hospital in Salt Lake City is among the best in the nation. Salt Lake City also has great public transportation, a walkable downtown area, and a low cost of living. Unfortunately, Social Security benefits and other retirement income is taxed in Utah, but seniors get a tax credit worth up to $450 per person, and both property and sales taxes are low.
While one of the big draws of Delaware for retirees remains its award-winning beaches, the state also has no sales tax. Delaware does not tax Social Security income and exempts certain investment and pension income. Plus, the state offers easy access to New York, Philadelphia, Washington, DC, and more.
However, the cost of living in Delaware is actually quite significant: more than 10 percent higher than the national average. The cost of housing can be a bit shocking for some, as well. The reason to take the plunge is that healthcare costs are actually below the national average, and Delaware ranks sixth overall in terms of healthcare quality, making it a great choice for retirees concerned about their health-related needs.