By Lori Thomas
Retirement is a massive goal for many seniors and a big milestone in every retiree's life. The average person spends decades saving for retirement and planning for this major financial decision; however, while most seniors envision retirement being completely stress-free, there are many financial hurdles to clear, and multiple factors that can impact retirement finances, as well.
Did you know that among all of these factors, where you live can actually have the biggest impact on your retirement finances? There are certain states that are amazing for retirement finances, while other states have obstacles that make them less than ideal for retirees.
So, how do you tell which states accommodate the comfort and needs of retired seniors the most? Fortunately, SeniorAdvice.com has a data-driven algorithm called the SeniorScore tool, which they've used to rank both the best and worst states for retirement. Want to see where your state ranks? Or are you simply looking for some ideas for a great new state to consider for your upcoming retirement? Here's a breakdown of the best and the worst retirement states:
The Best States for Retirement Finances
- Wyoming. If you're looking for a calm, peaceful place to spend your retirement, consider Wyoming. The state boasts plenty of lush nature, which retirees often enjoy, and plenty of adult daycare and nursing home services. Plus, in Wyoming, these service costs are lower than the national average. You'll also enjoy significantly lower property, state income and sales taxes; however, that doesn't mean that income is lower in Wyoming. In fact, the average household income is higher than the national average.
- Virginia. Virginia residents can also enjoy low property and sales taxes, while the average household income is significantly above the national average. Virginia residents enjoy affordable assisted living, nursing home and home healthcare costs, as well. What really makes this state special is that it isn't just a great place to retire financially, but it also ranks high when it comes to quality of life for seniors. This may be why there's such a large senior population there.
- South Dakota. If finances are the key to you enjoying your retirement, then South Dakota is for you. This state has low income and sales taxes, paired with a low unemployment rate and an average cost of living. Another great perk for seniors? Nursing home and adult daycare costs in South Dakota are much lower than they are in other states.
The Worst States for Retirement Finances
- California. Although many retirees would love for California to be on the list of best states to retire in financially, the state is unfortunately on our list of "worst" states. Despite the great climate, California isn't a great place for seniors to retire. Property and sales taxes are higher, while the state income tax is much higher than the average for the rest of the country. Cost of living is extremely high, as are assisted living and adult daycare costs. All of these things can really add up and make California a difficult state to retire in.
- Rhode Island. This small state has some big financial hurdles for seniors, making it a difficult place for seniors to retire in. Property and sales taxes are higher than the national average, while Rhode Island struggles with a very high overall cost of living. As for assisted living and nursing home costs? They're both significantly higher than the national average. Perhaps this is why there's an extremely low percentage of seniors who currently live in Rhode Island.
- New York. There are many hurdles that can make retiring in New York difficult. This state not only ranked low on the SeniorScore scale due to health and safety, but low marks for finance and recreation make it a less than desirable state to retire in. Also, New York has high state income taxes, and don't forget about property taxes, which are more than double the national average. For seniors looking for assisted living, a nursing home or adult daycare, these services are very expensive, as well.
Remember, your retirement journey is a very personal one, and where you choose to retire is completely up to you and your vision for your perfect retirement; however, the more you know about the financial climate in the state you currently reside or are looking to retire in, the better prepared you'll be for this major life change.
Lori Thomas has over a decade of writing experience in the health, legal and consulting industries. Her writing for SeniorAdvice.com is informed by years of research, as well as hands-on family expertise. Thomas has experience as a caregiver with her now late mother, who had chronic health issues for most of her life. She lives in Austin, Texas, and enjoys traveling, yoga and spiritual exploration.