A study published at the end of January by WalletHub revealed the best and worst states for retirement.
“Retirement is supposed to be relaxing, but it can also be incredibly stressful given that it typically puts people on a fixed income, which may not be enough for them to live comfortably. As a result, the best states for retirees are those that have low taxes and a low cost of living to help retirees’ budgets stretch as far as possible,” says WalletHub’s Chip Lupo. But where are the best states to spend your golden years?
To determine how each state ranks against each other, WalletHub compared all 50 across three key dimensions: affordability, quality of life, and healthcare. These were then broken down into 46 relevant metrics and weighted.
Best States
Unsurprisingly to many, Florida ranked as the best place to spend your retirement years. Florida won the top spot thanks to “relatively low taxes for retired people, including no estate, inheritance or income taxes.” The state also “receives more funding per senior from the Older Americans Act than all but two other states,” which funds things like transportation, homemaker assistance and nutritional programs for seniors.
Minnesota ranked #2 for retirement, largely for health reasons. The state has the most health care facilities, the second-most nursing homes and top-ranking geriatric hospitals. “When it comes to overall quality of life in Minnesota, the state has the 10th-best elder abuse protections in the country, which guard elderly residents against physical and financial harm. The state also has the 15th-lowest violent crime rate, and the fifth-highest percentage of people who do favors for their neighbors,” WalletHub wrote in its analysis.
Worst States
The worst states for retirement included: New Jersey (#45), New Mexico (#46), Washington (#47), Mississippi (#48), Louisiana (#49) and Kentucky (#50). Hawaii ranked dead-last for worst states when looking at adjusted cost of living. Montana had the highest rate of annual cost of in-home services.
Experts Speak Out On Retirement
“One common mistake that leads to high rates of poverty among retirees is assuming that Social Security retirement benefits will provide sufficient income for retirement, and not saving money on top of that. The maximum monthly benefit for those who retire at the full benefits age is $3,822 (this is age 67 for those born in 1960 or later),” says Tulane University professor Patrick Button.
“A related mistake to this is claiming Social Security benefits too early. Claiming at age 62, the earliest possible age, leads to less of a monthly benefit – a maximum of $2,710 -compared to delaying claiming to age 70 – a maximum of $4,873 (Source). For those who can work longer, perhaps by taking jobs to ease into retirement, they can allow their Social Security benefits to go much further by delaying claiming,” added Button.
Addressing high inflation is another key goal noted by Andrews University’s economics and finance associate professor Lucile Sabas. “As the Federal Reserve, responsible for monetary policy, aims to balance a 2% inflation rate and a 5% unemployment rate, State and local governments must assess fiscal policies to ensure they support economic stability. Responsible fiscal measures, including targeted stimulus and infrastructure spending, should be implemented to foster economic growth without exacerbating inflation.” Supply chain management and encouraging sensible long-term actions like investments in tech, research, and development to promote innovation can also help reduce production costs over time, Sabas added.
