The Best States and Towns for Retirement 2021: Tennessee and Texas Advance
Category: Best Retirement Towns and States
August 10, 2021 – It is a question a lot of people nearing retirement age have – what is the best state and town for retirement? While it is a great question, the answer is not that simple – it depends on what you are looking for. Do you mean the best retirement state for taxes, the state with the best climate, the one that offers the lifestyle you want to live, or the place with the lowest cost of living, etc. Until you know what you are looking for, it is a hard to get at the right answer. (Note: This is an update to our 2018 article on “The Best 10 States for Retirement“, which generated almost 100 interesting comments).
One good way to determine the best state for retirement is is to look at which states retirees are moving to. SmartAsset.com analyzed US Census Bureau data to explore which states have the highest retirement age net migration – the number of people age 60 and over moving into a state minus the number moving out. In effect, it is a measure of how people voted with their moving vans. Here is what SmartAsset came up with when examining data from 2019: (T indicates a state with no income tax)
- Florida (T). There are a lot of good reasons to retire in Florida: no income tax, no inheritance tax, Homestead Law, warm winters, and plenty of places to live. Interestingly enough, only one Florida city made SmartAssets’ top 10 city list – Fort Myers (#7) .
- Arizona. Ditto on warm winters, beautiful scenery, and many affordable places to live including active adult communities. AZ had 3 of the top 10 net immigration cities in 2019. AZ is relatively tax-friendly – it doesn’t tax Social Security, has relatively low property taxes, and has the 36th highest Tax Burden from the Tax Foundation. Mesa, home to many active adult communities, won the distinction of being the American town with the most over 60 net immigration. Scottsdale (#2) and Tucson (#10) also made the top 10 list.
- North Carolina. The Tar Heel state has a reputation as a relatively tax friendly place to retire. There are some exemptions for retirement income. The State has two cities that made the top 10 net migration list, Cary and Charlotte.
- South Carolina. Sometimes it seems like the two Carolinas are in a competition for which state can be the more tax-friendly. People over 65 get a $15,000 exemption on qualified retirement income in SC. The State has slightly warmer winters and plenty of nice places to retire like Beaufort.
- Texas (T). New to this list this year, the Lone Star State came in in 5th place, a very big move. The State has no shortage of interesting places to retire, from the Hill County to exciting Austin to its long coastline on the Gulf of Mexico. Although it has no state income taxes, it does tend to have relatively high property taxes.
- Tennessee (T). New to the net migration list, Tennessee recently ceased have any type of state income taxes (it previously taxed dividends and interest). There are many towns in the hills and mountains popular with retirees.
- Idaho. This state has a lot more to offer retirees than its famous potatoes. For one, its outdoor recreation is hard to beat. Cost of living is relatively low, at least compared to the coasts, and so are property taxes (people over 65 get a significant break on their primary residence).
- Oregon. One of the non-Sun Belt states with the most retiree net migration, Oregon has a fairly mild climate. Its other attractions include no state sales tax, interesting cities like Portland, and amazing outdoor experiences in places like Bend. Eugene, home to the University of Oregon, made the top 10 net migration list for cities.
- Nevada (T). It was not much of a surprise that the Silver State benefitted from net over 60 migration. It has warm winters and plenty of active adult communities with all kinds of amenities. There is no state income tax. Two cities, Henderson and Paradise, made the top 10 cities list for net migration.
- Alabama. We were surprised again by Alabama making this list, since it is not among the most popular states on Topretirements. Its very low taxes and cost of living must be very important reasons for that. The Gulf Coastal areas are well set up for retirement, while Huntsville in the north offers a diverse small city environment.
Two new states made this list in 2021, while two dropped off from the 2019 list. Tennessee and Texas made it this year, while Delaware and Georgia dropped off the list. Note that home prices tend to be reflected in these states’ desirability. In the 2nd quarter 2021 home price report from just released by the NAR, three of these states had the hottest markets in the country, with price gains of more than 40% year over year: Austin (TX), Boise (ID), and Naples/Marco (FL).
It is fairly easy to see why these 10 states are at the top for retiree net migration. When it comes to climate, all 10 of these states are in the Sunbelt, the Rockies, or the Pacific Northwest – desirable areas for reasons of climate or terrain. Florida, the Carolinas, Texas, Alabama, and Oregon have extensive coastlines. Taxation wise, 4 of the top 10 have no state income tax, while Oregon has no sales tax. Most of the winning states have a lower than average cost of living: Tennessee and Alabama are in the lowest 10 cost of living states; Nevada and Oregon are the only 2 with a higher than average cost of living.
Another measure of retirement state popularity is to look at which states generate the most interest at Topretirements.com. To do that we compared how many visitors looked at our various state mini-retirement guides. The result showed some interesting differences from the net migration top 10 list. For example, Montana, Wyoming, Kentucky, Delaware, New Mexico, South Dakota, Virginia, Mississippi, and Utah generated as much interest as many of the states on the net migration top 10. Perhaps that reflects curiosity about potential retirement states they don’t know much about, or it might mean that people about to retire think they already know enough about the more famous retirement states.
Best states for taxation
Determining the best state for retirement taxes isn’t quite as simple as it might seem. For sure, the 8 states with no state income taxes make that cut. But four of the states with no income tax, Alaska, South Dakota, Washington, and Wyoming, did not make it onto the top net migration list. State sales taxes are not usually that big a factor, although Oregon merits a plus for not having one. But what makes comparing states with state income taxes difficult is that each one seems to have its own schedule of deductions, exemptions, marginal rates, etc. Finding out, for example, if your military or out of state pension is exempt can be a challenge. As just one example of the complexity, consider Connecticut, widely regarded as a high tax state. CT has a $24,000 exemption for couples filing jointly, so for a couple with an AGI of $45,000, their tax would only be $650 – hardly enough reason to move for that reason alone. Note that since the couple’s AGI is below $100,000, Social Security income would have been tax exempt and not counted in the AGI of $45,000. Pension income will be phased out completely by 2025 (thanks to Clyde for this great information).
CT is one of thirteen states that tax Social Security, another consideration when determining state taxes. Although few states have them anymore, inheritance and estate taxes are another consideration.
Property taxes can be a very important thing to think about when choosing a new retirement state. Most states in the Northeast and Mid Atlantic states have high property taxes, while most in the Sunbelt have low ones. That issue, along with climate, are among the reasons why no states from those areas made this list.
Climate and the terrain
The Sunbelt is a big magnet for retirees looking for a warm place to spend their winters, and that preference can be seen in this list. Mountain states are attractive for their climate, beauty, and outdoor recreation possibilities. That is surely one reason why Oregon made the list, and why Topretirements Members have so much interest in Wyoming, Colorado, and Montana.
Cost of living
It is no accident that eight of the states on this list have lower than average cost of living, with Alabama and Tennessee in the lowest 10. Retirees are looking to stretch their available dollars to make the most of their retirement. Moving from a high cost area to one where housing and taxes are lower is a good way to leverage those differences for a better lifestyle.
Vaccination rates
With the resurgence of Covid and its refusal to go away, vaccination rates and Covid protection measures might be a new consideration for some retirees. Even though 91% of people over 65 in the U.S. have had at least one shot, the chances of getting a breakthrough case are higher in some states. Of the states with the highest net migration, Florida is the only one with at least average vaccination rates, while Idaho, Tennessee, Alabama, and South Carolina have very low rates of vaccination. Texas and Florida have refused to allow local governments to impose Covid health protections even though their hospitals are almost at full capacity with Covid cases.
Bottom line
Before you know what your best retirement state is, you have to know what you are looking for. In our book it is lifestyle. But which state or town will give you to live the retirement lifestyle you want? You can use our mini-retirement guides to find out more about the states you are considering.
For further reading:
Best States for Retirement 2014 – MultiFactor Analysis
Worst States for Retirement 2018
Best States for Retirement 2012
Most Tax Friendly States for Retirement
Best States for Retirement – Most Popular
Comments? What do you think is the best state for your retirement? Please share your thoughts as to why in the Comments section below.
Comments on "The Best States and Towns for Retirement 2021: Tennessee and Texas Advance"
LS says:
Moving across state lines is one way to measure the popularity of retirement destinations. However, when we downsized and loaded the moving van, it was to the next county over where the taxes were lower, the population density was more rural and the air was cleaner. Staying in Texas was not my first choice nor that of my wife. I wanted northern Arizona and she wanted the mountains in Colorado. But ultimately, it came down to being near family, friends and keeping our support network in place.
Clyde says:
This article states that Connecticut “is one of 13 states that tax Social Security.” That is only partially correct. For individuals with an adjusted gross income (AGI) of up to $75,000, Social Security income is not taxed by CT. For married individuals filing jointly, the AGI amount is up to $100,000 for no taxation on SS. In addition, CT state income tax on pension and annuity income is being phased out for seniors whose AGI is up to $75,000 for single filers and $100,000 for married filing jointly. For 2021, 42% of pension and annuity income is exempt from state income tax for those filers. In 2025, the exemption becomes fully phased in and 100% of pension and annuity income will from then on be exempt from state income tax for CT filers within those AGI levels.
Admin says:
Wow, Clyde, that is great information! Thank you. We have updated our CT mini-retirement guide based on this information as well. Much appreciated - this info was not easy to find. Incidentally, it makes the point that you really have to dig into each tax situation deeply even stronger - chances are most retired couples won't have enough AGI to pay taxes in CT, since most of their income will likely be from pensions and Social Security.
Ron says:
TEXAS REALLY!! Have you been to TEXAS?? Scorching hot in summer. Freezing cold in winter
Jon says:
Recently took a 6 week road trip to Florida in search of our retirement home. We had 3 requirements:
Gated, Near golf, Near the water (ocean or gulf). Not looking for anything over the top, 2 bed/2 bath, 2,000 sq ft max. Amelia Island, Port St Lucie, Bradenton/Sarasota.
A $400,000 model home will easily run $600,000 when the design is complete. On top of that, you also have to add the cost of the lot, which will be an additional $30-$100 thousand. Property taxes are a flat 2% in Port St Lucie, 1.5% in Sarasota. A $500,000 house could be taxed at $10,000, minus a small homestead exemption.
John says:
Do you really think people are going to choose where to retire and consider vaccination rates as a factor? You can't help yourself and get political by signaling out Texas and Florida.
JoeC says:
Florida? Really? Did this at all factor in the whole, you know, pandemic? For the southwest, like AZ, does this factor in drought and access to life-essential water? For Oregon, does this factor in wildfires destroying their cities? Do you at all factor in the effects of climate change now and in the future? Who cares about a state being cheaper if your shorelines disappear, you get smacked by hurricanes, you get burnt out or can't breathe from wildfires and the smoke. My daughter is in NV and multiple times has had to leave this summer due to unhealthy air.
I think results don't paint a true picture of desireable places to live. I think there's going to be a migration north, away from excessive heat and towards reliable water, IMHO.
Hjack says:
South Carolina! Yea! Moved here from Virginia. Also a wonderful state for retirement. Why, SC? Children and grandchildren. History and weather. Charleston/Summerville. Lower taxes. Really and truly excellent medical services, doctors and facilities. And I have been in medicine my whole life so I know from good medicine.
The Upstate ( Greenville, Spartanburg) the same. Great weather, beautiful mountains, top notch universities (Clemson, Furman), beautiful lakes. You can’t beat it.
Please do NOT come to South Carolina.
Larry says:
Two of the last three posts here are about my two states of residence: Connecticut (primary) and Soutn Carolina (vacation). As a taxpayer and real estate agent, I know well the arguments that I should be living full time in SC, with a cost of living much lower than in CT. But the pandemic, and the state by state responses to it, are a reminder that sometimes you get what you pay for. Take, for example, property taxes which, in CT, are generally about three to four times higher than in SC. But property taxes in CT largely fund schools. Depending on what ranking you look at, CT is top 5 among states in aid to education. It is also top 5 in vaccination rates and other measures of success against the pandemic. (Vermont, another expensive state, has been the most successful of the 50 states.) SC and some of its fellow southeast states (here’s to the state of Mississippi) are at the bottom in aid to education and at the top of infection rates, hospitalizations and deaths due to Covid (and now the more deadly Delta variant). Yes, we Yankees pay a lot more in taxes, but I am comforted, at a time like this, that our children understand science and relate to facts, and that the money we have spent might mean the difference between sickness and health, and life and death.
Billy says:
Well said, Larry.
Jes says:
Thank you, Larry. I live in SC. It's beautiful and less expensive than the northeast, but I'm finding other things to be much more important, such as some of the things you mentioned.
Debra says:
Our school board or our county commission here in Western North Carolina doesn’t understand/believe science.
Sally says:
Debra, same goes for Tennessee. Science is really just a detail here, hardly worth considering, by our elected state officials. The State fired the one official who was telling the truth and trying to get kids vaccinated. Yet those same elected officials are insisting on kids in classes while our hospitals are filling up with KIDS who are sick. I would never put Tennessee at the top of any list for retirement if you care for the environment, health, diversity, good schools with independent thinking and civics. However if you are looking for narrow minds, you have hit the sweet spot in Tennessee.
Maimi says:
I would have thought that this pandemic would have put states like Texas, Tennessee, and Florida at the very bottom on anyone’s list. There is just no way anybody I know could live in places like that with so many science deniers.
Maimi says:
Larry, yes, I agree with you. I am not happy with the taxes in New England, but watching what is going on in some southern states, makes me not even want to visit there anymore. Some things are worth paying for.
Sue says:
Yes. Regulations per science matters. Cheaper living in the south equals no regulations equals bad water and crappy services. The Northeast is expensive but at least we have some regulations/rules/laws that assist with public health.
Ron says:
Great comments!
Sally says:
What I love about this blog is that we get advise and comments about places that we might be interested in for retirement from people who actually live in those areas.
We have been fortunate to live all over these United States with my husband's work, and for us generally speaking, the taxes you pay in forward thinking states are well worth it. There are services provided to people by those taxes. Tennessee is by far the worst state we have ever had the misfortune to occupy. It has a BILLION dollars, no exaggeration here, in a rainy day fund. All the while the education system struggles to teach it's children with limited resources and, because the state will not join the Medicaid federal system, the state health care is just abysmal for the disadvantaged. Also, the state taxes food and gas at an exorbitant rate so the tax burden is put on the least able to afford it.
We will move as soon as it is practical, and feel fortunate to have some resources to do so.
Many thanks to all you folks who continue to contribute actual living experiences in our country.
HEF says:
Wow! I read a few of these comments to my husband and proudly pointed out that, this time, I didn't write them! We too have moved around the country and yes, Tennessee was the least favorite. When we first moved there, for work (2008), after our sons were out of high school in Rhode Island, we were told by several people that "education ain't a priority in Tennessee!. That has an effect on everything. It was nothing to wait up to TWO HOURS for your reg; Dr's appointment. We had to pay $$ to "join" the public library! Restaurants were all fast food chains. As soon as we could, we made a bee-line back to New England - our favorite region.
That said, I will sing the praises of Maine. Yes, house prices are crazy, even here but the people are considerate and kind and the town offers many services. Education is important and the whole town encourages the kids! I've seen a lot of road work this summer, even ours, so they are maintaining the infrastructure. Medical has been superb! Since 2018, we have only waited past our appointment time, to see a Dr. - ONE TIME! ...and they appologized profusely. Sally, you're right - sometimes you get what you pay for!!
Barb says:
Larry-
Touche’! I am your neighbor in Rhode Island and am so grateful to live where I do for all of the same reasons. Your comments are brilliant! You get exactly what you pay for!
Ron says:
IfAmerica is to survive it must quench this right wing philosophy of anti science and allowing takin an like religious BS to exists
Norman says:
These responses are really getting political. If you don't like Florida, Texas or Tennessee stay where you are. Those states may thank you.
Maimi says:
Hef and Barb, never have I been happier to be in New England than during this pandemic. Rhode Island and Maine are absolutely beautiful states and the population we live with matters. I love RI for its coastline and for the proximity to Boston for the hospitals. I am a very easy 60 miles south of some of the best hospitals in the world. Saving on tax dollars is no way to pick a place to live.
Barb says:
Maimi-
Completely agree with you! It really is a gorgeous place to live! All the best to you!
Janet says:
Why must people think we care about their political opinions? Unfortunately it is one of the reasons to no longer subscribe to this newsletter.
I am glad for all who can continue to live in the Northeast. As someone who has lived in NYC for 60+ years, my husband and I can't continue and do not want to. We pay over $13,000 in RE taxes, $3,000 in water and whatever nonsensical taxes the great deBlasio can think of. Add to that normal house maintenance......We have made smart investments, sorry I am not spending my hard earned money and retirement on NYC, NYS taxes, There are other states to live in.
Daryl says:
Is it really political, or just the shock of finding that a state you always dreamed of moving to does not value its citizen’s health, their own children’s health, clean air, clean water, or nature in general. I’ve watched my own state of PA regress, and realize I don’t belong here anymore where I was born and raised. Before the pandemic I wanted to migrate to a place with more sunshine and warmer winters, now I want to be with like-minded people who value health, science, education, and preserving the environment for our children’s future.
DLJ says:
I seldom comment, but know TR is in a difficult position here, with a history of closely moderating discussions, especially those that become political. As long as it doesn't become nasty, the pandemic has heightened growing fissures in our society to the point where I believe it's vital to be aware of these issues, particularly before making any potential relocation. Arguments on either side can be made, including TR making it clear that theirs won't be a site for these conversations. Tricky business, but I appreciate it, thanks.
Daryl says:
Yes, I agree, and am saddened that so many things which are not in the least political have become political, and am reading the same opinions worldwide.
Admin says:
Thanks to everyone for your comments on this topic and all the others at Topretirements. The discussion veered into the political when we included the section on vaccination and other Covid protection aspects, as we were afraid it would. But most everyone has been restrained and polite, only a few had to be edited (although we did our best to keep the sense of it). Thank you.
Now that we all got that off our chests, let's get back to focusing on the other aspects of what makes a place attractive (or not attractive) for retirement. That is what everyone really wants to hear about.
Kate says:
Surveying articles for different perspectives is always a good idea. Although some states like NY and CA usually end up on the bottom of where-to-retire lists due to cost of living, the authors of these articles sometimes have very different views.
This recent article, for example, evaluates states like TX and TN as being much less desirable for retirement: https://moneywise.com/a/ch-c/the-worst-states-for-retirement-in-2021/p-27
There are a lot of things that are important to seniors, besides the usual cost of living and crime rates. Retirees can need to research a laundry list of items, including good availability of medical care and specialists, future access to nursing homes/assisted living, entertainment or education options, probate law, and more. For many people, the security of familiar surroundings or being near family & friends shouldn't be discounted too. These "where to retire" lists are therefore just starting points in the research.
Daryl says:
Just read an article in Apple News saying as far as climate change predictions go, the latest census data shows “Americans are moving in the wrong direction:”
“The Census Bureau’s new map of the last decade’s population trends shows big growth in the west and on the coasts – and declines in the inland east coast and Great Lakes region…overall the census data shows America’s population growth is shifting out of areas that may be the best refuges from the most extreme effects of climate change, and into many areas that are most at risk.”
https://www.theguardian.com/commentisfree/2021/aug/16/us-climate-change-americans-census-data
After the hottest most humid summer we can remember in our own hometown, spouse and I were joking that we should be moving further north, not south as previously planned! ;)
Daryl says:
Ok, I see where my last comment might take us…and say instead after seeing the increasing droughts, coastal flooding, wildfires around the country this year, and living through hottest most humid summer I can remember where we reside currently, moving north and snowbirding south sounds like the solution for us. (At least until we’re ready for a nursing home having tropical wallpaper.)
Daryl says:
John, do you have an article about the most popular communities in the Northeast, especially those near the coast? Maimi’s description of the merits of Rhode Island sounds appealing. I was thinking of Virginia, but a friend suggested Delaware. I’d appreciate the link if you’ve already covered this.
Admin says:
Here are a couple of links you might find interesting Daryl.
https://www.topretirements.com/blog/great-towns/14-great-places-to-retire-in-the-mid-atlantic-states.html/
https://www.topretirements.com/blog/great-towns/resort-areas-make-big-splash-on-2018s-most-popular-northeastern-retirement-towns.html/
Rhode Island and Delaware are both pretty interesting.
Daryl says:
Quite a few to explore, thanks!
Maimi says:
Daryl, there are a lot of towns on or near the coast in Rhode Island. It is quite beautiful. The pandemic has driven prices of real estate up as people from NYC have left the city and discovered the relative value. https://theculturetrip.com/north-america/usa/rhode-island/articles/the-10-most-beautiful-towns-in-rhode-island/
Daryl says:
Thank you, Maimi, would love to see these in person!
Admin says:
The NY Times has a new article about New Braunfels, TX, ""Texas Town's Explosive Growth...". This city is the 3rd fastest growing Metro in the U.S. It has a lot of great insight into what this fast growing town, very popular with retirees, is like.
Louise says:
This article might be of interest to those of you desiring to retire out west. Water shortages are going to have a snowball effect on different industries. Farming is beginning to suffer from reduced water supplies. Hydroelectric power may come to a screeching halt.
Long article but very interesting!
https://www.cnn.com/interactive/2021/08/us/colorado-river-water-shortage/
Sandra says:
JoeC--
He summed it up nicely, but let me add to that since I live in the Southeast, Atlanta. Crime is out of control, heat, humidity, mosquitoes, even the snakes seem to be increasing. Traffic is unbearable. It seems many of the politicians are now having charges brought against them for various issues.
I retired recently and considered the Northwest, but if taxes, politics, and Covid doesn't get you, then it seems Mother Nature also has it in for us.
Purchase anything in Dekalb County, one of the 5-metro counties, and you pay 8% at checkout, drive across the county line to Gwinnett and you pay 6%.
And nobody mentions all the sinkholes in Florida. Folks may enjoy the beach, but I don't understand why soooo many retirees want to go to Florida. It's hotter than GA and that's damn hot.
Go outside Atlanta and it seems most aren't getting the vaccine. It a whole different demographic outside the metropolitan area in politics, religion, etc.
For now, I think I'll stay put and hope to one day get to the Northwest.
Would really love to travel, but for my health's sake, I think I'll sit tight for a while, at least until more get vaccinated.
Scary world out there.
Richpb says:
Sandra, I can suggest you look closer to home. There is perfection nowhere, but compared to Atlanta, metro areas in NC, VA and even in SC have most of what you desire. Don't judge the entire state by the "average".
Marilyn says:
This is really helpful information. But I am wondering, since it is so good, you must be related to Tom Brady!
Editor comment: Thanks Marilyn for the comparison. My family often claims "cousin Tom", but no actual relation in fact. He does appear superhuman!
John Brady