Finding the Best State for Retirement Is Personal

October 11, 2021 — Moving to a new state when you retire is not a decision to be made lightly. Only a tiny percentage of retirees make a move that significant, but when they do they usually do it for important reasons.  Often they trade in a valuable home in a high-priced market for a less expensive but nicer one in the Sunbelt somewhere, getting warmer winters and a friendlier tax environment in the bargain. They might move to a more age-appropriate home in a state where they can live the lifestyle they dreamed about. Or they might change states to be near family or friends.

If you choose to move or not, this is a very personal decision. Consulting lists of the “best states for retirement” might give you some ideas, but ultimately you need to choose based on the lifestyle, cost of living, taxes, politics, and culture, that will lead you to a happy retirement.

The most popular states for retirement

Look at where other retirees are moving is one way to approach the problem. Their choices at least suggest what is working for a lot of people.  Using Census data from 2019, smartasset.com listed these states as the ones experiencing the most net migration of retirement age people:

Florida. The  Sunshine State has no income or estate tax, a tax-friendly Homestead Law to protect against big increases in property taxes, warm winters, and many great places to live. Its long coast on both the Atlantic and the Gulf of Mexico, plus countless lakes and rivers, makes living on the water easy. Bustling cities like Miami, Jacksonville, and Sarasota. Charming small towns like Dunedin or Fernandina Beach provide interesting alternatives as well.

Arizona. People living in the western half of the country often choose the Grand Canyon State for their retirement. Most of its regions have warm winters and beautiful scenery. There are many great places to live – down south in the mountains around Tucson, out west in more affordable towns like Apache Junction, in an active community in the huge Phoenix Metro, or up north in beautiful Sedona or scenic Flagstaff. AZ is relatively tax-friendly – it doesn’t tax Social Security and has relatively low property taxes. 

North Carolina. With a mild year round climate, the Tar Heel State features variety in terrain – from the ocean to the  piedmont to the mountains. Chapel Hill is a great college town for retirement, New Bern is a popular city near the coast, and Asheville is just one of the many towns in the mountains that offer great places to retire.

South Carolina. South Carolina offers geographic variety like its northern neighbor, but it isn’t as populated and has fewer places to retire. The Myrtle Beach and Hilton Head areas provide a great beach retirement, and Greenville has a fantastic and walkable downtown area. Both of the Carolinas are considered very tax friendly, if that is one of your considerations.

Texas. The Lone Star State has many affordable places to retire. Austin is a college town with a different vibe and political environment compared to the rest of the state. Dallas and San Antonio have large numbers of active adult communities that attract retirees, many of whom come from the midwest. New Braunfels and Fredericksburg offer a different and low key kind of retirement atmosphere in the Hill Country. There is no income tax.

There are plenty of other great retirement states too.

Just because it isn’t the most popular doesn’t mean you should shut out other states from your retirement consideration. Any state can make a great place to retire if it meets your criteria. But just what is it you are looking for? Is it a certain kind of climate, lifestyle, cost of living, political or tax environment, availability of medical care, or nearness of friends and family? Are you thinking that if you sell your valuable home in California or the Northeast it would allow you to live a great lifestyle on a downsized budget in another area? Are you and your spouse or partner, if you have one, on the same page when it comes to what you are looking for? Agreeing upon and prioritizing these factors is essential to narrowing down your search.  Websites like topretirements.com have state retirement guides and reviews of best places that will help you find out more, as well as spark your interest.

Time on the ground

Once you have selected some states that look like a good fit, it’s time to spend some time there.  Let’s say that living in the mountains is very important to you. In that case you might want to take long vacations or extended rentals in states like Colorado or Vermont to experience what it is actually like to live there. Or, if not having a state income tax is super important to you, explore one of the 8 states that have no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. If a certain lifestyle like being able to play golf all year or being on a lake is critical to your retirement happiness, spend time in a state that allows you to pursue that lifestyle.

Bottom line

Choosing a new state for your retirement can have a huge payoff for your lifestyle and budget. Planning and experiencing different places will lead to a smarter decision. Enjoy the process and it should work out well for you.

Comments? How are you going about finding your best state for retirement, or did you already? Or, are you thinking you might just stay where you live now? Please share your thoughts in the Comments section below.