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Wallethub selects Florida as the best state in which to retire for 2018 Main Photo

Wallethub selects Florida as the best state in which to retire for 2018


Posted: January 16, 2018 by Stephen I. Mizner

See the original article at https://wallethub.com/edu/best-and-worst-states-to-retire/18592/
2018’s Best & Worst States to Retire

Jan 16, 2018  |  Richie Bernardo, Senior Writer

Retirement might be the end of your career, but it doesn’t have to be the end of financial security or life satisfaction. Timing is often a primary concern with retirement, as it generally coincides with the age at which we may receive Social Security or pension benefits. Not everyone can retire when they want to, though. Almost 30 percent of non-retired adults haven’t saved any money for retirement, though not necessarily through any fault of their own.

But in addition to when you want to retire, a good question to ask is where. That can be difficult to decide without doing lots of research. Even in the most affordable areas of the U.S., most retirees cannot rely on Social Security or pension checks alone to cover all of their living expenses. Social Security benefits increase with local inflation, but they replace only about 40 percent of the average worker’s earnings.

If retirement is still a big question mark for you because of finances, consider relocating to a state that lets you keep more money in your pocket without requiring a drastic lifestyle change. To help you find that permanent, affordable place to call home, WalletHub compared the 50 states across 41 key indicators of retirement-friendliness. Our analysis examines affordability, health-related factors and overall quality of life. Read on for our findings, insight from a panel of experts and a full description of our methodology.

Main Findings

150

Best States to Retire

Overall Rank
(1=Best)
StateTotal Score‘Affordability’ Rank‘Quality of Life’ Rank‘Health Care’ Rank
1 Florida 66.79 1 5 20
2 Colorado 66.17 23 8 2
3 South Dakota 65.89 2 32 6
4 Iowa 62.46 26 11 9
5 Virginia 62.02 18 9 21
6 Wyoming 61.66 4 30 29
7 New Hampshire 61.51 29 14 4
8 Idaho 61.39 11 20 25
9 Utah 61.14 22 24 12
10 Arizona 60.67 21 21 17
11 Minnesota 60.66 42 1 1
12 Wisconsin 60.46 32 7 11
13 Montana 60.32 14 33 19
14 Pennsylvania 59.54 28 4 30
15 California 58.92 37 3 16
16 Nevada 58.63 8 26 39
17 Kansas 58.53 27 22 27
18 Missouri 58.41 12 34 34
19 Massachusetts 58.40 43 2 5
20 Ohio 58.35 13 18 37
21 Washington 58.32 34 12 18
22 Texas 58.04 9 29 38
23 Maine 58.02 36 10 15
24 North Dakota 57.96 35 31 8
25 Delaware 57.60 15 40 24
26 Oregon 57.52 31 25 23
27 South Carolina 56.81 6 38 40
28 North Carolina 56.71 25 19 36
29 Michigan 56.50 33 15 31
30 Alaska 54.80 30 39 26
31 Illinois 54.45 40 13 32
32 Indiana 54.13 19 35 41
33 Nebraska 54.00 41 27 10
34 Connecticut 52.76 45 23 7
35 Tennessee 52.63 5 45 44
36 Oklahoma 52.44 7 44 43
37 Georgia 52.15 24 37 42
38 Maryland 51.94 44 17 14
39 Vermont 51.50 47 16 13
40 New York 51.16 46 6 28
41 Alabama 50.55 3 48 48
42 Hawaii 50.31 49 36 3
43 New Mexico 49.76 39 42 35
44 Louisiana 49.15 17 41 46
45 West Virginia 48.29 16 43 49
46 Arkansas 46.89 20 50 45
47 Mississippi 46.28 10 49 50
48 Rhode Island 45.14 48 46 22
49 New Jersey 44.94 50 28 33
50 Kentucky 43.06 38 47 47

 

Artwork-2018-Best-States-to-Retire-report-v1

Retirement might be the end of your career, but it doesn’t have to be the end of financial security or life satisfaction. Timing is often a primary concern with retirement, as it generally coincides with the age at which we may receive Social Security or pension benefits. Not everyone can retire when they want to, though. Almost 30 percent of non-retired adults haven’t saved any money for retirement, though not necessarily through any fault of their own.

But in addition to when you want to retire, a good question to ask is where. That can be difficult to decide without doing lots of research. Even in the most affordable areas of the U.S., most retirees cannot rely on Social Security or pension checks alone to cover all of their living expenses. Social Security benefits increase with local inflation, but they replace only about 40 percent of the average worker’s earnings.

If retirement is still a big question mark for you because of finances, consider relocating to a state that lets you keep more money in your pocket without requiring a drastic lifestyle change. To help you find that permanent, affordable place to call home, WalletHub compared the 50 states across 41 key indicators of retirement-friendliness. Our analysis examines affordability, health-related factors and overall quality of life. Read on for our findings, insight from a panel of experts and a full description of our methodology.

Main Findings

150

Best States to Retire

Overall Rank
(1=Best)
StateTotal Score‘Affordability’ Rank‘Quality of Life’ Rank‘Health Care’ Rank
1 Florida 66.79 1 5 20
2 Colorado 66.17 23 8 2
3 South Dakota 65.89 2 32 6
4 Iowa 62.46 26 11 9
5 Virginia 62.02 18 9 21
6 Wyoming 61.66 4 30 29
7 New Hampshire 61.51 29 14 4
8 Idaho 61.39 11 20 25
9 Utah 61.14 22 24 12
10 Arizona 60.67 21 21 17
11 Minnesota 60.66 42 1 1
12 Wisconsin 60.46 32 7 11
13 Montana 60.32 14 33 19
14 Pennsylvania 59.54 28 4 30
15 California 58.92 37 3 16
16 Nevada 58.63 8 26 39
17 Kansas 58.53 27 22 27
18 Missouri 58.41 12 34 34
19 Massachusetts 58.40 43 2 5
20 Ohio 58.35 13 18 37
21 Washington 58.32 34 12 18
22 Texas 58.04 9 29 38
23 Maine 58.02 36 10 15
24 North Dakota 57.96 35 31 8
25 Delaware 57.60 15 40 24
26 Oregon 57.52 31 25 23
27 South Carolina 56.81 6 38 40
28 North Carolina 56.71 25 19 36
29 Michigan 56.50 33 15 31
30 Alaska 54.80 30 39 26
31 Illinois 54.45 40 13 32
32 Indiana 54.13 19 35 41
33 Nebraska 54.00 41 27 10
34 Connecticut 52.76 45 23 7
35 Tennessee 52.63 5 45 44
36 Oklahoma 52.44 7 44 43
37 Georgia 52.15 24 37 42
38 Maryland 51.94 44 17 14
39 Vermont 51.50 47 16 13
40 New York 51.16 46 6 28
41 Alabama 50.55 3 48 48
42 Hawaii 50.31 49 36 3
43 New Mexico 49.76 39 42 35
44 Louisiana 49.15 17 41 46
45 West Virginia 48.29 16 43 49
46 Arkansas 46.89 20 50 45
47 Mississippi 46.28 10 49 50
48 Rhode Island 45.14 48 46 22
49 New Jersey 44.94 50 28 33
50 Kentucky 43.06 38 47 47

 

Artwork-2018-Best-States-to-Retire-report-v1

Ask the Experts

In order to choose a place to settle for retirement, you must carefully consider various factors such as your finances, health and how you plan to spend your time. For advice on these choices, we turned to a panel of experts in fields such as aging and taxes. Click on the experts’ profiles to read their bios and responses to the following key questions:

  1. What is the most common mistake that retirees make when choosing where to live?
  2. What are some tips for living on a fixed income in retirement?
  3. What are the top factors retirees should consider when choosing a state for retirement?
  4. Should states work to attract retirees? What are the pros and cons to having a large retiree population?
  5. Should retirees be exempt from certain state and local taxes?
  6. How might changes to the tax code influence retirement security?

Aimee Drolet Rossi

Professor and Marketing Area Chair in the Anderson School of Management at the University of California-Los Angeles
Aimee Drolet Rossi

What are the top factors retirees should consider in choosing which state to retire in?

It is not that clear now, especially with the GOP tax bill, which punishes certain states that have traditionally been attractive to retirees. California, for example, may now be too expensive for many people (not just the elderly) because of the SALT provision. However, unlike other states, California provides additional health care coverage for poorer residents (who already enjoy lower tax rates in California, compared to wealthier residents). California was likely more attractive to folks sending kids to college, since state tuition is much lower here than in states, like Illinois. Note that many states, such as Oregon, have deals so that people earning income in California cannot avoid California state taxes by moving. Apart from that angle, seniors are attracted to milder climates, culture, and good health care.

Should states work to attract retirees? What are the pros and cons to having a large retiree population?

Yes. Research indicates that older workers are more accurate and perform better (so long as they have more time) compared to young adults. That experience is remarkably valuable, and businesses are wise to tap that resource. The only con I'd see to a large retiree population would be if younger workers were supporting them (for example, through payments to pensions). For example, in Japan, there are nine elderly adults for each young adult. It's a major burden on the economy. Since older adults (Baby Boomers) have more money than any other segment, I don't see what the drawback would be (economically speaking).

Should retirees be exempt from certain state and local taxes?

No. In a state with a progressive income tax, that is meant to help take care of poorer residents, there is absolutely no compelling reason for them to not pay taxes. Also, in many states, they already enjoy lower property taxes because assessments don't catch up with market values (California is an excellent example of this).

How might changes to the tax code influence retirement security?

SALT and the inability to deduct more than 10k are the biggest shocks to the system right now. However, the removal of the individual mandate will affect seniors' premiums (going way up), and that kills any positives coming out of the tax bill. Seniors don't use the child deduction. Not being able to deduct full costs of medical care -- another killer.

Kirk Kinder

Founder & President of Picket Fence Financial
Kirk Kinder

What is the most common mistake that retirees make when choosing where to settle?

I would say moving to an area after having limited exposure to that region. People often take a trip or two to an area, then decide to move there. Short vacations or visits don't really give you a true understanding of the region. I recommend spending a couple months as a renter, to really get a feel for the area.

What are some tips for living on a fixed income in retirement?

Make sure you have an emergency fund of some type. Fixed-income retirees can manage quite well, until an unexpected expense shows up. That throws their entire budget into jeopardy.

What are the top factors retirees should consider in choosing which state to retire in?

I think the qualitative factors should outweigh the quantitative. Does the area treat retirees well? Is there an opportunity to find friends or pursuits that fit your interests? Are the health care services strong?

Should states work to attract retirees? What are the pros and cons to having a large retiree population?

If I were a governor, I would work to attract retirees. These folks tend to have discretionary income which can help the service industries of a state. Beyond that, retirees tend to improve communities through charitable activities and giving time/treasure to the community.

Should retirees be exempt from certain state and local taxes?

Many states already do this. So, a retiree interested in finding a tax-friendly state has many options. Should it be mandatory -- no. I think each state should be able to decide how they want to run their state. Also, I don't think it is right to always give retirees breaks, when young families are struggling financially.

Methodology

In order to identify the most retirement-friendly states, WalletHub compared the 50 states across three key dimensions: 1) Affordability, 2) Quality of Life and 3) Health Care.

We evaluated those dimensions using 41 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for retirement. For metrics marked with an asterisk (*), we used the square root of the population to calculate the population size in order to avoid overcompensating for minor differences across states.

We then calculated each state’s weighted average across all metrics to determine its overall score and used the resulting scores to rank-order our sample.

Affordability – Total Points: 40

  • Adjusted Cost of Living: Double Weight (~11.43 Points)
  • General Tax-Friendliness: Full Weight (~5.71 Points)
    Note: This metric is based on WalletHub’s States with the Highest & Lowest Tax Rates ranking.
  • Tax-Friendliness on Pensions & Social Security Income: Full Weight (~5.71 Points)
  • Tax-Friendliness on Estate or Inheritance Tax: Full Weight (~5.71 Points)
  • Annual Cost of In-Home Services: Half Weight (~2.86 Points)
  • Annual Cost of Adult Day Health Care: Half Weight (~2.86 Points)
  • Share of Adults Aged 65 and Older Who Could Not Afford a Doctor Visit: Full Weight (~5.71 Points)
    Note: This metric measures the share of the population aged 65 and older who needed to see a doctor in the past 12 months but were restricted due to cost.

Quality of Life – Total Points: 30

  • Share of Population Aged 65 & Older: Full Weight (~1.67 Points)
  • Elderly-Friendly Labor Market: Full Weight (~1.67 Points)
    Note: This metric takes into account both the percentage of people aged 65 and older working and the number of part time employees for every full time employee for people aged 65 and older.
  • Share of Population Aged 65 & Older Below Poverty Level: Full Weight (~1.67 Points)
  • Elderly Food Insecurity Rate: Full Weight (~1.67 Points)
    Note: This metric refers to the percentage of adults aged 60 years and older who faced the threat of hunger in the past 12 months.
  • Access to Public Transportation: Full Weight (~1.67 Points)
    Note: This metric measures the percentage of commuters who use public transit as a proxy for the availability of public transportation.
  • Mildness of Weather: Double Weight (~3.33 Points)
    Note: This metric is based on WalletHub’s Cities with the Best & Worst Weather ranking.
  • Access to Scenic Byways: Full Weight (~1.67 Points)
    Note: This metric takes into account both the number of scenic byways and the length of scenic byways.
  • Shoreline Mileage: Full Weight (~1.67 Points)
  • Museums per Capita*: Full Weight (~1.67 Points)
  • Theaters per Capita*: Full Weight (~1.67 Points)
  • Golf Courses per Capita*: Full Weight (~1.67 Points)
  • Access to Adult Volunteer Activities: Full Weight (~1.67 Points)
  • Elderly Volunteer Rate: Full Weight (~1.67 Points)
  • Violent-Crime Rate: Full Weight (~1.67 Points)
  • Property-Crime Rate: Full Weight (~1.67 Points)
  • Quality of Elder-Abuse Protections: Full Weight (~1.67 Points)
    Note: This metric is based on WalletHub’s States with the Best Elder-Abuse Protectionsranking.
  • Air Quality: Half Weight (~0.83 Points)
  • Drinking-Water Quality: Half Weight (~0.83 Points)
    Note: This metric measures the percentage of the population potentially exposed to water exceeding a violation limit.

Health Care – Total Points: 30

  • Family & General Physicians per Capita: Full Weight (~1.76 Points)
  • Dentists per Capita: Full Weight (~1.76 Points)
  • Nurses per Capita: Full Weight (~1.76 Points)
  • Share of Geriatricians Required to Meet Estimated Need (Geriatrician Shortfall): Full Weight (~1.76 Points)
  • Top-Rated Geriatrics Hospitals: Full Weight (~1.76 Points)
  • Health-Care Facilities per Capita: Full Weight (~1.76 Points)
  • Quality of Public Hospitals: Full Weight (~1.76 Points)
    Note: This metric is based on Centers for Medicare & Medicaid Services’ ranking of public hospitals.
  • Well-Being Index for Americans Aged 55 and Older: Full Weight (~1.76 Points)
  • Share of Adults Aged 65 & Older with Good or Better Health: Full Weight (~1.76 Points)
  • Share of Adults Aged 65 Years and Older with Poor Mental Health: Full Weight (~1.76 Points)
    Note: This metric refers to the share of adults 65 and older who reported their mental health was not good 14 or more days in the past 30 days.
  • Share of Adults Aged 65 & Older with a Disability: Full Weight (~1.76 Points)
  • Share of Adults Aged 65 & Older Who Are Physically Active: Full Weight (~1.76 Points)
  • Share of Adults Aged 65 and Older Who Are Obese: Full Weight (~1.76 Points)
  • Share of Adults 65 Years and Older with Inadequate Sleep: Full Weight (~1.76 Points)
    Note: This metric refers to the share of adults 65 and older who reported sleeping less than seven hours in a 24 hour period on average.
  • Life Expectancy: Double Weight (~3.53 Points)
  • Death Rate for Adults Aged 65 & Older: Full Weight (~1.76 Points)

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Federal Bureau of Investigation, Council for Community and Economic Research, U.S. Bureau of Labor Statistics, Retirement Living Information Center, Genworth Financial, United Health Foundation, County Health Rankings, Centers for Disease Control and Prevention, Centers for Medicare & Medicaid Services, Charity Navigator, Gallup Healthways, GolfLink, The Tax Foundation, America's Scenic Byways, NOAA Office for Coastal Management, U.S. News & World Report, Institute for Health Metrics and Evaluation, and WalletHub research.

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