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Best States to Retire 2021

Planning where to retire starts with knowing how different locations meet your needs and financial capability. This study compares affordability, safety, health care capacity and more.
By Richard Barrington | MoneyRates.com Senior Financial Analyst, CFA

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When you start to think about the best state in which to retire, several questions naturally come to mind. The latest MoneyRates.com study of the best states for retirement can help you sort things out and find some answers to those questions.

The typical kinds of questions you might have are these:

  • Where are the most affordable places to retire?
  • Which states are safest from crime?
  • Which states have the most to offer for nursing care?
  • Where would I find the warmest weather?
  • Which states are most popular with older Americans?

These are important questions because conditions vary widely from state to state. Here are some examples of the extremes:

  • The average temperature in Florida is a comfortable 70.7 degrees while, in Alaska, it's a frosty 26.6.
  • Hawaii is beautiful, but there are 21 states that offer a cost of living that is less than half as expensive.
  • If you want a safe retirement, be aware that Alaska has more than 7 times as much violent crime as Maine, and Louisiana has more than 2.5 times as much property crime as Massachusetts.
  • Wondering where to buy that retirement property? Check out how much property taxes can vary. As a percentage of property values, the average property tax burden in New Jersey is more than 7 times what it is in Hawaii.
  • In terms of which states attract the most older residents, the proportion of Maine's population aged 65 and over is almost twice as high as Utah's.

Most states have both good points and bad points when it comes to retirement conditions. That's why MoneyRates.com came up with a methodology that takes into account several different factors and then takes into account the trade-offs between those factors.To know more, use our "Retirement Calculator".

Best States for Retirement 2021: Methodology

To take a broad view of retirement conditions in each state, MoneyRates.com grouped ten different data series into four major categories:

  1. Economic factors,

    including cost of living data from the Council for Community and Economic Research (C2ER), property tax burdens from the Tax Foundation and unemployment rates from the Bureau of Labor Statistics.

  2. Crime/safety factors,

    based on violent and property crime rates from the Federal Bureau of Investigation.

  3. Lifestyle factors,

    including proportion of older residents calculated from U.S. Census Bureau data and average temperatures from the World Population Review.

  4. Healthcare conditions,

    using nursing facility capacity figures calculated from U.S. Census Bureau data, cost of health care figures from the C2ER and life expectancy at age 65 from the Centers for Disease Control.

Rankings in each of these four categories were averaged to determine the overall rankings.

10 Best States to Retire in 2021

The following were the 10 best retirement states according to the factors listed above:

1. (tie) Iowa

Iowa

Economy: 13
Crime/Safety: 13
Lifestyle: 30
Healthcare: 3

This Midwestern state may not be one of the first places that come to mind when you think of retirement destinations, but that's why it's important to look at the facts.

Iowa has consistently been at or near the top of this annual survey because of what it has to offer to retirees. Its nursing care capacity, measured by the per-capita number of people employed by those facilities in the state, is fifth nationally. It also helps that the economy is strong - it has the third-lowest unemployment rate in the country.

Why should the job market matter to a retiree?

For one thing, more and more people are choosing to work part time after retiring from their primary careers. Also, whether you are looking for a job or not, no one wants to live in an economically depressed area.

1. (tie) West Virginia

West Virginia

Economy: 8
Crime/Safety: 16
Lifestyle: 6
Healthcare: 29

Like Iowa, West Virginia is another state you might not think of as a retirement destination until you look at the numbers.

Affordability is a big factor for anyone on a tight retirement budget, and West Virginia has the fifth-lowest average property tax burden in the country. The overall cost of living is 9.1% below the national average, and healthcare costs are third-lowest nationally. Notably, West Virginia is popular with older residents, as the state has the third-largest proportion of people aged 65 or over.

3. (tie) Arkansas

Arkansas

Economy: 4
Crime/Safety: 46
Lifestyle: 8
Healthcare: 6

Given the uncertainty of the recession, affordability is a driving force in lifestyle decisions these days. Affordability is a big reason why the two states tied for third ranked so high in this survey. Arkansas has the second-lowest overall cost of living in the nation and the tenth-lowest average property tax burden.

Arkansas also did well in the healthcare category, ranking tenth in nursing care capacity and first in healthcare affordability. However, if you consider Arkansas, pick your neighborhood carefully because the state is the fifth-worst for crime.

3. (tie) Mississippi

Mississippi

Economy: 9
Crime/Safety: 24
Lifestyle: 10
Healthcare: 21

As with neighboring Arkansas, one of the primary attractions of Mississippi is that it is cheap. Mississippi has the lowest overall cost of living in the United States and the fifth-lowest healthcare cost.

Unlike Arkansas, crime is not a particular problem, as the state ranks around the middle of the pack. However, it may not be the healthiest environment for seniors, as life expectancy at age 65 is second lowest in the nation. Still, while many warm-weather destinations are very expensive, Mississippi might be a low-cost alternative if you want to avoid the cold.

5. (tie) Florida

Florida

Economy: 31
Crime/Safety: 27
Lifestyle: 1
Healthcare: 10

Perhaps no state is more associated with retirees than Florida, so it's no surprise it should make the top ten. The reason it isn't ranked even higher than fifth highlights the fact that all states have both strengths and weaknesses.

Florida has the country's warmest average temperature and the second highest proportion of residents aged 65 or older. However, nursing care capacity has not kept up with that elder population, as Florida ranked 40th on that measure.

5. (tie) Kentucky

Kentucky

Economy: 28
Crime/Safety: 10
Lifestyle: 14
Healthcare: 17

The Bluegrass State offers retirees safety, with the seventh-lowest rate of violent crime in the nation. It also ranks as the seventh-cheapest for healthcare costs. One area of weakness is life expectancy at age 65, where it was one of the worst states in the nation.

7. Connecticut

Connecticut

Economy: 45
Crime/Safety: 4
Lifestyle: 19
Healthcare: 3

The story on Connecticut seems to be that it's a great place to retire if you can afford it. The state ranked fourth overall for safety from crime, and it was third overall in the healthcare category. However, it was among the ten most-expensive states in every cost category - overall cost of living, healthcare costs and average property tax burden.

8. Missouri

Missouri

Economy: 6
Crime/Safety: 42
Lifestyle: 12
Healthcare: 15

While low costs are often associated with economically depressed states, Missouri had the fifth-lowest overall cost of living; yet its job market has been resilient in the year of COVID, with the ninth-lowest unemployment rate as of October.

Another strength is that it ranked eighth-best for nursing care capacity. As seems always to be the case, though, there is a trade-off: Missouri was one of the ten worst states for crime.

9. (tie) Alabama

Alabama

Economy: 1
Crime/Safety: 44
Lifestyle: 7
Healthcare: 24

A cluster of Southeastern states did well in this study and, besides warm weather, a common denominator for most of them is low cost.

Alabama has the second-lowest average property tax burden and ninth-lowest overall cost of living. However, it has the same negative trade-off of some of the other Southeastern states - it is one of the ten worst states for crime.

9. (tie) Rhode Island

Rhode Island

Economy: 48
Crime/Safety: 7
Lifestyle: 14
Healthcare: 7

This state rated as the second best for nursing care capacity, and is the seventh-safest overall from crime. As is often the case, quality comes at a price, so you have to consider whether the nation's tenth-highest cost of living fits your budget.

"Where Should I Retire?" Things to Check Before You Move

A lot of personal preferences go into the decision of where to retire. Family and friends are often the primary consideration, and there are a number of subjective factors such as the availability of cultural, sporting or recreational activities.

This study is designed to remind you of the practical considerations to think about before you move. A recurring theme in the study is that all states have their trade-offs between strengths and weaknesses. That's why it's helpful to look closely at specific factors to see what matters most to you.

Beyond state-level conditions, each city and neighborhood has its own characteristics that you need to consider too.

The specific questions you'll want to consider may depend on your own circumstances and needs, but here are a few examples to get you started:

  • Does the area you're considering have ample capacity of well-run facilities for elder care, should you need to transition to that type of living arrangement in the future?
  • What is the state tax structure? States without income tax are attractive to a lot of people; but in retirement when your income is lower, you may find that property tax is more of a burden.
  • Are the services you need conveniently located or is there good public transportation? Many retirees eventually give up driving out of safety concerns, so you should know if there are other options available.
  • Are local banks competitive and senior-friendly? If you've made the transition to online banking, you have a leg up because these accounts typically offer the best terms for both savings and checking accounts. Plus, location generally isn't an issue - they're available wherever you can get internet access.
    If you still prefer to bank at a local branch, check out what's available before you relocate. Branch-based accounts may not be as competitive as online banks in general, but you may be able to find special deals like free checking for seniors.

Face it: relocating in retirement is a costly and difficult process. It's not a move you want to make more than once, so look before you leap.

How Much Should I Save for Retirement? Consult a Calculator

You shouldn't wait until the end of your career to think about where to live in retirement. This should be something you consider as you plan and save for retirement.

A retirement calculator can help you set retirement-savings targets based on how much you'll need to support your retirement lifestyle, but how do you know what that retirement lifestyle will cost?

Common rules of thumb about basing retirement savings on a certain percentage of income or your current expenses may fall short if you plan a lifestyle change in retirement. Thinking ahead about what kind of future lifestyle you want can help you calculate how much to save for retirement. Where you plan to live is a big part of that future lifestyle.

The nice thing is that envisioning the specifics of where you want to live in retirement doesn't just help you plan for retirement more accurately. The vision of where you hope to spend your retirement years should help motivate you to do the tough job of saving year in and year out to support your future lifestyle.

Best and Worst States to Retire in 2021: Full Listing

Here's how all 50 states ranked in this study:

Best States for Retirement 2021
Overall RankStateEconomyCrime/SafetyLifestyleHealthcare
9Alabama144724
50Alaska39495050
24Arizona3041523
3Arkansas44686
47California44383235
46Colorado24374831
7Connecticut454193
21Delaware1836436
5Florida3127110
33Georgia5292744
39Hawaii4032242
21Idaho1264432
43Illinois41253521
11Indiana722408
1Iowa1313303
18Kansas13352318
5Kentucky28101417
42Louisiana24481633
29Maine3522243
37Maryland4629381
32Massachusetts46103513
29Michigan22253124
27Minnesota27174611
3Mississippi9241021
8Missouri6421215
35Montana20292533
15Nebraska1521429
49Nevada38403849
29New Hampshire3512541
20New Jersey5032713
37New Mexico1749939
36New York4915405
39North Carolina24321248
14North Dakota1817492
16Ohio29201920
24Oklahoma10422324
45Oregon42281646
13Pennsylvania42131015
9Rhode Island487147
19South Carolina246340
23South Dakota22223419
27Tennessee16451624
44Texas37382724
12Utah3174712
16Vermont3342130
26Virginia2093338
48Washington32324546
1West Virginia816629
41Wisconsin34123737
33Wyoming1074345
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