Best and Worst States for Retirement – Not What You Might Think

Traditionally, retirees flocked to the Sun Belt. Sunshine, warm-weather, and golf were the main attractors. However, Bankrate recently found that if you dig a little deeper and ask a few more questions, seniors actually prefer some areas of the country that don’t necessarily fit the traditional retirement mould.

Top Five

Here are the top five (and, later, for the sake of fairness, bottom five) states for retirement living, along with reasons for the selections made. Areas of concentration included access to medical care, cost of living, crime rates, climate, and taxes.

# 5 - Mississippi

The main factors in the Magnolia State’s favor include low state and local taxes and a lower-than-average cost of living. It is also a relatively “warm weather” state.

CNN Money, however, cautions retirees to choose location within the state carefully. Depending on the area, Mississippi has a high crime rate and only 178 doctors per 100,000 people, compared with 278 per 100,000 population on a national basis.

#4 - Kentucky

Another contender for “low cost of living” honors, according to the Council for Community and Economic Research. Kentucky retirees pay less for groceries, housing, utilities, transportation, and health care than seniors in other parts of the country.

Also in Kentucky’s favor – warmer than average temperatures for much of the year and a low crime rate in most areas of the state.

#3 - South Dakota

While it’s true that South Dakota winters are harsh – and cold, the Mount Rushmore State has some real positive attributes. First, it has the lowest crime rate in the nation. In addition, the tax burden of 7.6 percent is better than any other state except Alaska.

Smart Money also points out that South Dakota has an annual cost of living a full 11 percent lower than the national average. The median home price in the state is $116, 900.

#2 - Louisiana

Louisiana features low taxes (the Tax Foundation says the state is the fourth lowest in the country). It has moderate weather with a 30-year average temperature of 66.7 degrees. Only Hawaii and Florida are higher.

Access to medical care in Louisiana is well above average and the cost of living is low. Crime is one negative. According to the FBI, there are 4,244 property and violent crimes per 100,000 people in Louisiana annually. Another potential negative, especially on the coast, is the state’s susceptibility to storms – Hurricane Katrina comes to mind.

#1 - Tennessee

The top retirement state, according to Bankrate is Tennessee. With a cost of living that ranks second lowest in the country (Oklahoma is lower) and a tax burden, according to the Tax Foundation that ranks third lowest, living in Tennessee is, well, cheap.

Tennessee is one of the top states for access to medical care, and its weather is warmer than the national average. The state is also a cultural cornucopia with all manner of music, art, museums, and other attractions.

Bottom Five

When judging potential retirement locations, especially on the criteria mentioned above, somebody has to be less desirable. In this case, “less desirable” often means cold, expensive, and crime-ridden.

#5 - Wisconsin

Exception – fishing. Wisconsin is a fisherman’s paradise. However, living in Wisconsin means putting up with an average annual temperature of 43.7 degrees. Not bad if you’re a fish. For humans – not so great. Once you warm up, you will find yourself paying up. The Badger State has both high local and state taxes and an above-average annual cost of living.

Wisconsin does have a low crime rate and if you love sports (in addition to fishing), beer, dairy farms, and the outdoors in general, there are worse places to live.

#4 - California

One wouldn’t necessarily think that one of those “worse places” would be the Golden State, but at #4 on the list, technically California is below Wisconsin. Perhaps, not so surprisingly, the main problem with California is the cost. Everything in California costs more. Everything.

The state has one of the highest costs of living in the nation. It requires residents to pay more in state and local taxes than all except Connecticut, New Jersey, and New York. If you live in California, expect to pay a whopping 11.2 percent of your income in taxes.

#3 - Washington

Washington is a beautiful state, but all that beauty comes at a price. The cost of living and crime in Washington State are well above the national average. The 30-year average annual temperature is 48.7 degrees, also making the state one of the coldest in the country.

There is no personal income tax in Washington but the Tax Foundation still says state and local taxes take 9.3 percent of income – which is unusually high – especially for a state with no income tax.

#2 - Alaska

The total tax burden on Alaska residents is only 7 percent – one of the lowest in the country. Alaska also has no state income tax and it does not charge a sales tax. So much for the good news.

Not surprisingly, Alaska is the coldest state in the nation with an average annual temperature of 35.9 degrees. The cost of living in Alaska is the second highest in the U.S. Only Hawaii is more expensive.

#1 - Oregon

Sorry, Oregon. Turns out the barrel has a bottom – and you are it. The crime rate in Oregon is higher than the national average. So are taxes and the cost of living. For “lower” one has to turn to 30-year average temperature – which is 48.8 degrees, 4 degrees lower than the national average.

The Beaver state does have spectacular views of the Pacific Ocean, miles of beautiful hiking trails, and white-water rapids a plenty. One would have to be a hardy retiree to enjoy all that outdoors, but it is there for the taking.

Putting it in Perspective

When choosing a place to spend retirement, it’s not just about cost of living, taxes, temperature, crime rates, and access to medical care. If it was, the choice would be much easier. It’s also about family – activities – neighbors – transportation – and much more.

As a result, any best and worst list is no more than a starting point. Use the information to guide you to additional research and, when appropriate, an on-site visit to a few places you find interesting and notable.