Choosing the Right State for Retirement: A Guide

For many Americans, retirement planning involves more than just saving money and enjoying the golden years. It’s also about finding the right place to live where your money, health needs, and lifestyle goals can work together.

The average retired household spends more than $61,000 a year, with housing, healthcare, and transportation being their biggest expenses. With these costs in mind, a new study from Polaris Home Care has ranked all 50 states based on their retirement-friendliness, using factors such as healthcare costs, housing expenses, property taxes, utilities, food costs, crime rates, and average earnings.

The study found that even popular retirement destinations can fall short when everyday costs are factored in. Idaho took the top spot with a perfect Retirement Index Score of 100, thanks to its combination of affordability, safety, and relatively low healthcare costs. The state reported annual medical expenses of $8,148 per person, above-average earnings of $63,894, and a crime rate about 41% lower than the national average.

Azizona ranked second with a score of 90.67, helped by its warm climate, lower property taxes, and above-average earnings of $63,692. The state’s property tax rate of just 0.41% was among the lowest in the country, while average monthly utility costs came in at about $524.

The remaining states that make up the study’s top 10 are Virginia, Alabama, Wyoming, North Dakota, Mississippi, Minnesota, and Michigan. One of America’s most famous retirement destinations, Florida, didn’t even crack the top five, coming in seventh with a score of 83.77. The warm weather and lack of state income tax keep it attractive for retirees, but the study suggests taxes alone don’t determine retirement affordability.

Alaska was named the least retirement-friendly state, scoring just 41.44. Although Alaska residents earn some of the highest average wages in the country at about $70,196 annually, those earnings are offset by high living costs. The state recorded some of the highest expenses for utilities, healthcare, and food, including average monthly utility costs of $658 and annual medical spending of more than $13,600 per person.

Before making a move, here are six things to consider:

• Total cost of living: A state with no income tax may still have higher housing, insurance, or healthcare costs that can drain your retirement savings faster.
• Healthcare access and affordability: Affordable medical care is only useful if quality providers and hospitals are accessible when you need them.
• Housing costs and insurance: Property taxes, homeowners insurance, and climate-related costs such as flood or hurricane coverage can make a difference to your retirement budget.
• Safety and community amenities: Crime rates, access to recreation, transportation, and having a sense of community and social activities can all play a role in your quality of life during retirement.
• Being close to family and support networks: A lower-cost state may not be the best choice if relocating means you lose access to your network of family, friends, or caregiving support.
• Long-term affordability: Remember to consider whether a location will remain affordable as expenses rise over time.

Retirement planning isn’t necessarily about just finding the cheapest place to live. It’s about careful planning so that you can find a place where your money, health needs, and lifestyle goals can work together.