Where You Should Retire in the USA: States Ranked From Worst To Best

When we attain retirement age, a lot of us plan to relocate to that dream state we always imagined ourselves growing old in. Some of us leave for better healthcare, lower costs of living, and friendlier tax laws, and others move for favorable weather and family.

We ranked the 50 states in the U.S. from the most expensive to the least expensive to live in, with data on tax breaks, yearly income, and healthcare costs. These were gotten from Kiplinger, National Association of Realtors, Bureau of Labor Statistics, Milken Institute and more.

50. HAWAII

Cost of living: 87% above the average in U.S

Population: 1.4 million

Best city: Maunawili

HIGHLIGHTS: The best town for retirees in this tropical state is Maunawili on the island of Oʻahu, says Niche.com. It is home to popular hiking spots and close to the state capital, Honolulu. Generally, Hawaii is full of nature and water sports.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: The cost of living is very high in Hawaii — 87% above average. That is even greater than the other sunshine state, California. The average earnings for 65 plus individuals is over $71K, according to Kiplinger. Few of its residents meet U.S. poverty guidelines.

49. CALIFORNIA

Cost of living: 52% above the average in U.S

Population: 39.56 million

Best city: Beverly Hills, per Yahoo!

HIGHLIGHTS: It is hard to argue against California's natural attraction. The state has forests, deserts, beaches, and more. It is home to big cities for those desiring fast-paced living.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Apart from Hawaii, this state has the second highest costs of living. If you are a fan of bright weather, you will have to pay up! Some are, and it is costing them — 19% of California's residents live in poverty, says the U.S. Census Bureau.

48. MASSACHUSETTS

Cost of living: 38% above the average in U.S

Population: 6.902 million

Best city: Northampton, says Forbes

HIGHLIGHTS: This is a state with great history — the landing place of the Mayflower, the Boston Tea Party, one of the 13 initial colonies, and more.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Massachusetts, also known as the Bay State, has lots of costs for retirees, says Kiplinger. There are high living costs at 38% above the U.S. average, high healthcare costs and it is not tax-friendly. If you hate cold, East Coast winters are not for you.

47. ALASKA

Cost of living: 32% above the average in U.S

Population: 737,438

Best city: Anchorage, says Yahoo! Finance

HIGHLIGHTS: Kiplinger says the Last Frontier is extremely tax-friendly to retirees, but apparently not many take advantage of this. Alaska has a small population of seniors.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Its costs of living are pretty high there — 32% above the U.S. national average, per Kiplinger. Health care costs are essential for seniors and those are over the national average as well in Alaska. Also if you are looking for big city living, Alaska is not your state!

46. NEW JERSEY

Cost of living: 27% above the average in U.S

Population: 8.909 million

Best city: Long Beach Township

HIGHLIGHTS: It is a state with so much to do and see during your Golden Years. Walk the boardwalk and appreciate the ocean scenes in Ocean City or take a fast train ride into New York City. The Garden State has a great history as well for those history buffs or the history-curious!

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Compared with places like South Dakota and Montana, New Jersey has a much higher cost of living. Medical care is expensive and so are property taxes, says Kiplinger. This is not a great option for low-income retirees or those looking to save some cash.

45. CONNECTICUT

Cost of living: 24% above the average in U.S

Population: 3.573 million

Best city: Darien, says AreaVibes.com

HIGHLIGHTS: Income for seniors is some of the highest in America, Kiplinger says. Even with the huge cost of living, retirees may be able to afford it if they get up a retirement job.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: It is not very tax-friendly to retirees with real estate taxes some of the worst in the country, says Kiplinger. Most retirement income is fully taxed and presumably, some residents may face taxes on their Social Security benefits. There are not many benefits to alleviate the burden either.

44. NEW YORK

Cost of living: 22% above the average in U.S

Population: 19.54 million

Best city: Great Neck, says Yahoo! Finance

HIGHLIGHTS: Living in New York City might be good for retirees — it is very walkable with many necessities close by and delivery services abound! Small houses mean living quarters are very manageable.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Although it is fun and walkable, New York City (and in fact, New York state) are best for well-to-do retirees. It is not very tax-friendly to retirees and according to Kiplinger, 65 plus individuals suffer high poverty rates.

43. RHODE ISLAND

Cost of living: 22% above the average in U.S

Population: 1.057 million

Best city: Jamestown

HIGHLIGHTS: One of the original 13 colonies of the U.S., Rhode Island has so much history for history buffs and ocean panoramas for nature lovers. It is located near enormous touristy, metropolitan areas for those that love to sightsee.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: This small eastern state is not very tax-friendly, per Kiplinger. Also, the high cost of living might create a hole in the retiree's purse. If you have been saving for a long time, have a financially supportive family or perhaps have won the lottery, Rhode Island can be good for you.

42. WASHINGTON

Cost of living: 21% above U.S. average

Population: 7.1 million

Best city: Vancouver

HIGHLIGHTS: Generally speaking, Washington isn't the cheapest place to live, but those desiring the Pacific Northwest lifestyle at budget prices might opt for Vancouver. There, seniors will find more affordability and the lack of a state income tax.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Its cost of living is 21% above the national average, which is less than Hawaii and California, but still might be an impediment for some seniors. The average income for households 65 and older is over $55K, which might help balance your budget out.

41. NEW HAMPSHIRE

Cost of living: 18% above the U.S. average

Population: 1.3 million

Best city: Gilford

HIGHLIGHTS: It is quite tax-friendly in New Hampshire, says Kiplinger, as it does not tax any retirement income. For people with numerous healthcare needs, the state ranks 5th for senior health, per United Health Foundation. Another benefit: its picturesque New England landscapes.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: You got to pay up for those breathtaking views, though! New Hampshire's cost of living is high compared to the national average, but it might work itself out considering the tax situation. There is also cold winters and humid summers to consider.

40. OREGON

Cost of living: 18% above the U.S. average

Population: 4 million

Best city: Gold Beach

HIGHLIGHTS: Healthcare costs for a retired couple are usually 2.6% lower than the country's average. For the outdoorsy senior, there is lots of nature to enjoy. Just make sure you do not mind the rain! You will get plenty during the eight-month rainy season.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Oregon is not tax-friendly. Social Security is exempt, however, most retirement income is not and Oregon has one of the highest state income taxes in America at 9.9%. Also, income for seniors is low, with an average of just above $45K.

39. MARYLAND

Cost of living: 17% above the U.S. average

Population: 6.0 million

Best city: Chevy Chase Village

HIGHLIGHTS: Its average household income for 65 plus individuals is the second highest in America, on average about $70,874. This state is home to big city Baltimore and adjacent to the sights of Washington D.C.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: True, people make more money here than the rest of America, but this income gets taxed massively in Maryland. Social Security is not taxed, but distributions from individual retirement accounts are. There is also an estate and inheritance tax.

38. COLORADO

Cost of living: 17% above the U.S. average

Population: 5.4 million

Best city: Colorado Springs

HIGHLIGHTS: Colorado ranks 4th in the United Health Foundation's senior health rankings. Colorado also has low rates of physical inactivity and obesity in its senior residents. Maybe, those in the Centennial State will also live to be 100?

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: If you want to purchase a house in Colorado, be wary because the market is very competitive in areas like Denver. You might need to adjust to the state's high altitude, but then you will probably enjoy the pleasant weather.

37. VERMONT

Cost of living: 12% above the average in U.S

Population: 626,299

Best city: Hartford

HIGHLIGHTS: The Green Mountain State ranks high for its senior healthcare, says United Health Foundation's rankings. Nature lovers will enjoy its lush environment with numerous trees, wildlife, lakes, rivers, and scenic views.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES:  Senator Bernie Sanders’ state of residence is considered one of the "Least Tax-Friendly" per Kiplinger. There is also quite a pricey cost of living, making it a bit tougher for low-income seniors to survive.

36. DELAWARE

Cost of living: 11% above the U.S. average

Population: 967,171

Best city: Rehoboth Beach

HIGHLIGHTS: It was rated tax-friendly by Kiplinger — Delaware does not tax Social Security benefits! It also excuses certain amounts of investment and pension income for people 60 plus.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: The cost of living is pretty high — 11% above the U.S. average, according to Kiplinger. Seniors have below U.S. average earnings, probably making it difficult to afford necessary things in Delaware for some seniors.

35. VIRGINIA

Cost of living: 7% above the average in U.S

Population: 8.3 million

Best city: Roanoke

HIGHLIGHTS: Cost of living is greater than the national average but it should balance out as incomes are high in Virginia. Healthcare, a big issue for most retirees, is generally cheap. In addition, Social Security is not taxed and residents 65 plus can deduct $12K of their income.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Seniors in poverty might struggle with the above average costs of living. There are many cool cities to check out in Virginia like Roanoke, Lexington, and Richmond, but they are not big cities like New York City or Los Angeles. Head elsewhere for big city living.

34. UTAH

Cost of living: 4% above the average in U.S

Population: 2.9 million

Best city: Salt Lake City

HIGHLIGHTS: Utah's healthcare ranks 2nd for seniors in the U.S. according to the United Health Foundation. There are also various outdoor activities to take advantage of with 5 national parks, 5 national forests, and 43 state parks.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: The Beehive State is not that tax-friendly to retirees. It taxes Social Security, which might worry seniors already in poverty. Utah has the third-lowest poverty rate in America for seniors. Its income levels are at the country's average, which will not help struggling retirees.

33. NEVADA

Cost of living: 4% above the average in U.S

Population: 2.8 million

Best city: Winchester

HIGHLIGHTS: Nevada has some sweet deals on taxes, for instance, no state income tax! Poverty rates for seniors are also quite low (8.4 % compared with the U.S. average of 9.4%). It is also home to Vegas!

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: The cost of living is a bit over the country's average and temperatures can be high, ranging between 50 and 120 degrees Fahrenheit. The state's year-round semi-arid desert climate might make it the driest state in America.

32. MINNESOTA

Cost of living: 4% above the average in U.S

Population: 5.5 million

Best city: Osseo

HIGHLIGHTS: Minnesota is a good place for health-focused seniors. It is ranked as the "healthiest state in America for seniors", according to the United Health Foundation. It is also home to the popular Mayo Clinic in Rochester, Minnesota. If you have complicated health problems, this might be an excellent choice for you.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: It has got the not so great combination of more than average cost of living and below average yearly income. The state also taxes Social Security as much as the Feds do. Other retirement incomes are not free from taxation either.

31. SOUTH DAKOTA

Cost of living: 4% above the average in U.S

Population: 882,235

Best city: Hot Springs, says Niche.com

HIGHLIGHTS: South Dakota earned itself a "Most Tax-Friendly" tag from Kiplinger. Apart from affordability, nature lovers might like its mountains and prairies.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Ensure you like blizzards and freezing weather before moving here. As with most rural states: This state is not for city lovers! No big cities to speak of and it is one of the least populated states.

30. MONTANA

Cost of living: 3% above U.S. average

Population: 1.062 million

Best city: Glasgow

HIGHLIGHTS: Although cold out, it is beautiful — Montana boasts natural wonders like Glacier and Yellowstone national parks. Kiplinger reports that it has one of the highest populations of people 65 and above.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Living in this state might give retirees a hard time — Kiplinger rates it as "Not Tax-Friendly." Its income levels are below the country's average and most retirement incomes are taxed with Social Security inclusive.

29. ARIZONA

Cost of living: 3% above U.S. average

Population: 6.7 million

Best city: Green Valley

HIGHLIGHTS: Arizona has lots of sunshine and beautiful desert scenery, making it a favorite retirement destination for those sick of icy winters. It is easier to retire in than states like New York, California with its 3% above the country's national average cost of living.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: The Grand Canyon State's dry heat makes it almost unbearable in summer, with temperatures in some localities ranging from 104 to 107 degrees Fahrenheit. It is not the cheapest to live in with average household income for seniors 10.8% below the country-wide average.

28. NORTH DAKOTA

Cost of living: 1% above the U.S. average

Population: 760,077

Best city: Rugby, says Niche.com

HIGHLIGHTS: Kiplinger rates North Dakota tax-friendly to retirees (income taxes are low — 1.1 to 2.9%) and says it has a low cost of living. Its natural panoramas are absolutely breathtaking to boot!

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: North Dakota taxes retirement income but that should not have too big of an impact on retirees since the cost of living is very low. Again, it is not the best place for city folk — its population is just 760,077.

27. FLORIDA

Cost of living: 1% above the average in U.S

Population: 19.9 million

Best city: Jacksonville

HIGHLIGHTS: Florida is probably one of the most tax-friendly states in America. Perhaps this, along with its continuous sunshine, is why Florida has the highest share of retirees in the U.S.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Weather in Florida can be nasty. Heat and humidity can be a problem, and even unsafe to seniors with poor health. There is also the danger of hurricanes and severe thunder and lightning storms. Other than hurricane weather, it is pleasant and warm mostly…

26. WYOMING

Cost of living: U.S. average

Population: 577,737

Best city: Cody

HIGHLIGHTS: The Mercatus Center rated the Equality State 5th in its fiscal health — out of 50 states, that is pretty good! There is no state income tax either which makes things easy on a retiree's wallet.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: If you are not a nature lover and more of a city-dweller, residing in Wyoming is not for you. The state has one of the least populations in America at 577,737 and nary a giant cosmopolitan area in sight.

25. MAINE

Cost of living: 2% below the U.S. average

Population: 1.3 million

Best city: Portland

HIGHLIGHTS: If you love lobsters, you don't have to look far to get the good stuff. Both living and healthcare costs are below the country's average, which is good for seniors living off retirement income and savings.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: The tax situation here is just OK — most retirement income is taxable. But, Social Security is not taxed and estate tax only pertains to estates worth $11.8 million plus. Income levels are not high, per Kipling. Senior households make 25.2% below the national average.

24. PENNSYLVANIA

Cost of living: 3% below the average in U.S

Population: 12.8 million

Best city: Pittsburgh

HIGHLIGHTS: Forbes tagged Pittsburgh as the best city in America to retire in. The city has a high number of doctors per capita and is quite walkable and bikeable. Generally, Pennsylvania is good to retirees with inexpensive healthcare and tax breaks.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Pennsylvania is not strong in its own budget, making its future uncertain. Financially unstable states (like Kansas) might raise taxes, which could affect retirees. George Mason University rates Pennsylvania's financial health at 45 out of all 50 states.

23. WISCONSIN

Cost of living: 4% below the average in U.S

Population: 5.8 million

Best city: Madison

HIGHLIGHTS: Cost of living is cheap and there are some tax breaks for low-income inhabitants' retirement income. Cheese lovers will love being close to some of the best cheese in the country, as well as cheese curds. Yum!

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Wisconsin is not very tax-friendly and has the lowest household income for those 65 and above in America. Although Social Security is exempt, other retirement earnings are subject to taxation. The icing on the cake: Healthcare expenses are higher than the country's average.

22. ILLINOIS

Cost of living: 4% below the average in U.S

Population: 12.9 million

Best city: Leland Grove

HIGHLIGHTS: Illinois' financial standing has been dipping for a while. On the up hand, that implies its cost of living is below the national average perhaps making it much affordable for some retirees.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: However, its financial standing has put Illinois in the second-lowest ranking for fiscal soundness. Tax breaks on various retirement incomes are not assured and there are high sales taxes.

21. IDAHO

Cost of living: 5% below the average in U.S

Population: 1.6 million

Best city: Sandpoint

HIGHLIGHTS: Nature lovers will enjoy the different environments in Idaho — the rugged landscape, lakes, snow-capped mountains, and canyons. Its cost of living allows seniors to really stretch their dollar and live thrifty Golden Years.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Those who want a big city life will not have a great time in Idaho. You will need to go to a more cosmopolitan area for that kind of lifestyle! Its tax-friendliness is a mixed bag for retirees: state tax is 6% and state income tax is over 7%. However, Social Security is not taxed and there is no inheritance or estate tax.

20. NEW MEXICO

Cost of living: 5% below the average in U.S

Population: 2.095 million

Best city: Taos

HIGHLIGHTS: The drama on "Better Call Saul" and "Breaking Bad" shouldn't fool you — New Mexico is a beautiful and mostly a peaceful place to live.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: New Mexico's deserts and golden sunsets are lovely but not its tax situation. Kiplinger says the state is the "Least Tax-Friendly" as retirement income is taxed here. Low-income retirees might be able to get benefits, however.

19. NORTH CAROLINA

Cost of living: 5% below the average in U.S

Population: 9.9 million

Best city: Asheville

HIGHLIGHTS: This state usually has fairly mild weather throughout the year compared with most of the country. It is very lush and green, excellent for nature lovers. Most costs of living are quite low, save for the Kill Devil Hills area, and Social Security is not taxed.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Although the costs of living aren't high, income levels are also low at an average of $43,616 for people 65 years and above. Social Security is not taxed but other retirement income is taxable at a flat rate of 5.9%.

18. SOUTH CAROLINA

Cost of living: 7% below U.S. average

Population: 4.8 million

Best city: Bluffton

HIGHLIGHTS: South Carolina enjoys mild weather almost throughout the year, making it an attractive retirement destination. Another draw? It's affordable, with the cost of living 7% below the national average. With taxes being friendly to retirement earnings, you should be riding easy.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: It gets pretty hot in summer and humid in this Southern state, although most times the weather is pretty mild. Health is not the best here with high obesity levels, many smokers, and low consumption of veggies.

17. GEORGIA

Cost of living: 7% below U.S. average

Population: 10.1 million

Best city: Athens

HIGHLIGHTS: Georgia has 2 things most people like: low living costs and warm weather. Healthcare is also cheap for retirees (6th lowest costs for couples in America). Its low state taxes are also really appealing for budget-conscious retirees.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: If you are keen on Southern living, ensure you are ready for Georgia's long, hot and humid summers. Many people avoid the outdoors around noon because it is way too sticky. An added nuisance: All the mosquitos!

16. MISSOURI

Cost of living: 10% below the average in U.S

Population: 6.1 million

Best city: Columbia

HIGHLIGHTS: Missouri's low costs of living are very appealing for retirees — 10% below the country's average. Bookworms will also nerd-out about all the popular writers from the "Show Me State" like Mark Twain, Maya Angelou, T.S. Eliot, and more.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: It is cheap to live in Missouri but that does not help too much as household income levels are also rather low (for 65 plus persons, it is a little over $43K). Its tax position is mixed and it has poor healthcare for retirees.

15. TEXAS

Cost of living: 10% below the average in U.S

Population: 27.0 million

Best city: San Marcos

HIGHLIGHTS: Living costs are lower than the nation's average and the average income for people 65 years of age and older is not bad. Incomes are not taxed so much in Texas, so your dollar can stretch even further. There are cool cities, as well, like Dallas and Austin.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Overall, Texas is affordable except for its healthcare, a strong concern for most seniors. Texas is high in poverty, regrettably, with the 6th highest senior poverty rate in the U.S. at 10.8%.

14. LOUISIANA

Cost of living: 10% below the average in U.S

Population: 4.6 million

Best city: Baton Rouge

HIGHLIGHTS: This state has low costs of living and lots of sights and activities to keep active retirees busy. There are the tourist and music attractions of New Orleans and Baton Rouge, renowned cuisine, and natural wonders like the swamps.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Costs of living might be low, but so are incomes. The average for folks 65 years and above is $50,744. That might make it difficult to afford things like healthcare, which are 2.1% over the average costs in America.

13. NEBRASKA

Cost of living: 12% below the average in U.S

Population: 1.9 million

Best city: O'Neill

HIGHLIGHTS: Seniors will enjoy a very cheap cost of living in addition to a state with good financial health. (Nebraska is ranked 6th in that category by the Mercatus Center at George Mason University). O'Neill got an "A" for retiree living per Niche.com.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Cost of living is inexpensive, but it is not very tax-friendly to retirees. Sadly, most retirement income is taxable. Social Security is only exempt if you earn $43,000 or less for single filers, $58,000 for joint filers

12. TENNESSEE

Cost of living: 12% below the average in U.S

Population: 6.5 million

Best city: Lookout Mountain

HIGHLIGHTS: Tennessee is tax-friendly to seniors. It does not levy state income taxes so your retirement income can grow further. All metro areas are very cheap in all senses, even healthcare which is usually a big worry for seniors.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Summertime can be unbearable, at times reaching 92 degrees Fahrenheit in July. With the addition of some humidity, and the summer months might even be hotter. Traffic is not great in Tennessee, particularly around bigger cities Memphis and Nashville. Going out of town will entail planning and patience.

11. OHIO

Cost of living: 12% below the average in U.S

Population: 11.6 million

Best city: Bellbrook

HIGHLIGHTS: Geographically, Ohio being centrally location makes it easy to travel to either coast to see family and friends or go on vacation. Cost of living is very low at 12% below the nation's average and Social Security isn't taxed.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Low costs of living and exempt Social Security is attractive, but its average household income for senior residents is not that high. Ohio might work out for you if you've got a lot of savings, otherwise, you will have to deal with the average earnings at $42,667.

10. MICHIGAN

Cost of living: 12% below the average in U.S

Population: 9.9 million

Best city: Farmington

HIGHLIGHTS: The low cost of living and low poverty rate in Michigan makes it very attractive to retirees. Also, Social Security is not taxed in Michigan. For people who love water sports, the Great Lakes will be a fun destination during Michigan's spring and summer months.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Michigan is going to have a complex tax situation in a couple of years. Come 2020, individuals 67 and above must pick between deducting Social Security income or $20K of every income sources for singles, $40K for couples.

9. IOWA

Cost of living: 12% below the average in U.S

Population: 3.1 million

Best city: Iowa City

HIGHLIGHTS: No state income tax on Social Security earnings and a state income tax break for pension income! Iowa City is named a "City of Literature" by UNESCO and is home to a vigorous cultural scene and prestigious university.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Taxes are not easy on retirees' wallets in Iowa, despite Social Security earnings being untaxed. Retirement benefits might be hit by up to 8.98%. However, people 55 and above can exclude up to $6,000 of taxable retirement income.

8. ALABAMA

Cost of living: 13% below U.S. average

Population: 4.8 million

Best city: Orange Beach

HIGHLIGHTS: Head down to the Heart of Dixie where it's budget-friendly. Most spend 4.4% less than the average retired couple on healthcare, income taxes are from 2 to 5%, and Social Security benefits are exempt.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Storms can get intense in spring and November, with a lot of rain and thunderstorms. Like most Southern states, Alabama will be very hot during the summer. When choosing a place to live, consider how southern Alabama is warmer than the North.

7. KANSAS

Cost of living: 14% below average

Population: 2.9 million

Best city: Eureka

HIGHLIGHTS: Cost of living is quite low in the Sunflower State, which might persuade you that there is no place like home in Kansas. Its scenic plains and prairies are also interesting to any nature lovers out there.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Kansas is not in the best financial shape so it is raising taxes to correct its budget deficit. Most retirement earnings, including Social Security, will be subject to state taxes with rates from 3.1 to 5.7%.

6. KENTUCKY

Cost of living: 14% below average

Population: 4.4 million

Best city: Lexington

HIGHLIGHTS: Welcome to the Bluegrass State, where seniors can enjoy low costs of living and a high number of tax exempts. Social Security and $41,110 of other earnings are excluded from taxes. However, it is not the healthiest place for senior folks.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Senior health cost is not cheaper than other states — it is about at the average of the country. It also ranks poorly in senior health, with high rates of physical inactivity, smoking, and poverty. There is also a low number of good nursing homes to care for retirees.

5. MISSISSIPPI

Cost of living: 15% below the average in U.S

Population: 3.0 million

Best city: Hide-A-Way Lake

HIGHLIGHTS: Senior folks might like Mississippi's sweet tax breaks and low costs on daily items. All Social Security, distributions from IRAs and 401Ks, and other retirement earnings won't be subject to taxes. Also, those property taxes are the least in the country.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: While Mississippi taxes and costs of living are easy on the wallet, the state ranks last for senior health as per the United Health Foundation. Mississippi also has the worst poverty rate in the country for seniors — 13.4%.

4. INDIANA

Cost of living: 15% below the average in U.S

Population: 6.6 million

Best city: Meridian Hills

HIGHLIGHTS: Indiana's cost of living is 15% below the national average, implying that everyday expenses like food, gas, housing, etc, are cheaper. These things are sure to take a hit on your purse in places like Hawaii and California.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: The state of Indiana is best for retirees with lots of savings as its yearly income is below the country's average (21.4% below to be precise) and retirement earnings, other than Social Security, is taxable at regular rates.

3. OKLAHOMA

Cost of living: 16% below the average in U.S

Population: 3.9 million

Best city: Nichols Hills

HIGHLIGHTS: Low costs of living will most benefit those that have good retirement savings. The state is also one that doesn't tax Social Security and up to $10K can be excluded from retirement income. This helps considering average incomes are low.

Image Credit: Pixabay

Image Credit: Pixabay

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CHALLENGES: Oklahoma ranks third-worst for retiree health. Not just are there high levels of smoking and physical inactivity, but there is also a lack of geriatric care and high-grade nursing homes available to treat all the health issues.

2. WEST VIRGINIA

Cost of living: 17% below U.S. average

Population: 1.806 million

Best city: Lewisburg, says Niche.com

HIGHLIGHTS: Its cost of living is not too bad, at 17% below the U.S. average. West Virginia is known for spectacular views, a rich history, grand resorts, and more.

Image Credit: Pixabay

Image Credit: Pixabay

CHALLENGES: Kiplinger reports that the Mountain State is not tax-friendly to retirees and ranks low for its financial soundness, per the Mercatus Center at George Mason University. West Virginia also has poor healthcare for 65 plus people.

1. ARKANSAS

Cost of living: 17% below U.S. average

Population: 3.0 million

Best city: Bella Vista

HIGHLIGHTS: A really low cost of living in the Natural State, as well as average health charges being the 3rd lowest for retired couples. Arkansas is recognized for its wildlife, hot springs, mountains, and rivers — hence the name the "Natural State."

CHALLENGES: The state taxes are not that easy on your pocket. Social Security benefits and about $6,000 of other retirement earnings are exempt. Income tax rates can hit 6.9% if the income is over $75,000. Poverty rates in Arkansas for retirees are the 8th highest in America. Also, this Southern state is not the place to be for those desiring big city living!

Image Credit: Pixabay

Image Credit: Pixabay

Read more: 26 Photos That Will Hardly Be the Same When You Give Them a Second Look

As we've seen, the best states for seniors have a combination of good healthcare options, low costs of living, and low taxes. Some states might have excellent weather or lots to do but not great areas to live out your Golden Years. In your opinion, which state do you consider as the best for retirees and why? Do you agree or differ with our rankings of best states for folks 65 years and above? Tell us your views in the comments section and don't forget to share this article with your friends.

Source: Finance101

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