One of the most important factors when it comes to retirement is where you decide to live.
Cost of living is a big deal when it comes to retirement, since you are often on a fixed income, and you might not be able to afford to live someplace expensive.
When deciding where to retire, you need to take into considering such items as cost of living and tax burden.
These are two items that vary quite a bit from state to state. Additionally, you should also consider your desired lifestyle.
Sometimes it makes sense to live somewhere a little more expensive if there are activities and interests that fit with what you want your retirement lifestyle to look like.
Best 10 States for Retirement
If you are looking for some good ideas for retirement, Marc Diana, the CEO of MoneyTips.com, offers the following 10 suggestions:
If you want to avoid the cold, move somewhere to the south in this state. Taxes are low, and there are a number activities to participate in. You do have to watch out for the summer time in Arizona, though. Temperatures can be dangerously high, so you might want to move north during the summer months.
Colorado is known as one of the healthiest states around. If you like the outdoors lifestyle, this a great choice. Taxes aren’t bad, and the cost of living is pretty low. Many retirees like to shuttle between Colorado and Arizona, since they are weather opposites. Avoid the cold Colorado winters by heading to Arizona, and then return to Colorado when Arizona’s temperatures rise.
As long as you have your hurricane insurance paid up, Florida can be a good choice. There’s a reason that it’s a retirement mecca. There is a relatively low cost of living, and taxes aren’t very high, either.
This is one of the most up-and-coming states in a lot of areas. There are a number of activities in the major cities, and you can find almost anything you want. Cities like Austin have an updated, hip feel, while living in Houston can appeal to the more conservative. Plus, taxes are fairly low.
If you love the outdoors, Idaho is a great choice — if you can handle the winters. (Move to Boise to avoid the worst of the winter.) Diana points out that Idaho has low tax rates, a low cost of living, and a low crime rate. But you might have to give up more urban enjoyments.
For those who think cost is most important, Mississippi offers a very low cost of living, and very low taxes. Indeed, these costs might be low enough that you can make this state your “home base” and be able to afford visiting other places more frequently.
7. South Dakota
This is another place that requires you to give up some activities in exchange for a low cost of living. Like Idaho, this state is fairly tax-friendly, but you have to be able to handle the winters. South Dakota has a high life expectancy and very little crime.
It might be fun to live close to the nation’s capital, but you’ll pay for it. If you want to save a little bit of your retirement, move further away from Washington, D.C. Once you get away from D.C., there is a reasonable cost of living, temperate climate, and a relatively friendly tax policy. Plus, you aren’t very far from a number of activities.
There is no state income tax in Tennessee, which makes it attractive to many retirees. Additionally, the cost of living, even in cities like Knoxville and Nashville, is relatively low. However, there is a high sales tax. You’ll have to watch your spending if you live in Tennessee.
What? Diana points out that Hawaii does, in fact, have a high cost of living.
However, if you can afford to live there, there are a number of other benefits related to lifestyle. Living in Hawaii means that you’ll have good weather, lots of activities, and residents are happier.
While the income tax is high for the state, many retirees find that their income is excluded, since Social Security and most pension income are exempted.
Figure out what is most important to you when it comes to retirement, then choose a location that best fits your needs and your pocketbook.