Retire Here, Not There

The best and worst states for retirees.

The Best and Worst States For Retirees

Nearly half of us – 47 percent, according to one recent survey -- will consider relocating when we retire. But we may not be packing the sunscreen and swimsuits when we do.

States like Florida and Arizona used to be synonymous with retirement, so it may have surprised some people that neither cracked the Top 10 of Bankrate's list of the best and worst states to retire to. That's because weather is only one of several factors retirees consider when choosing a place to spend their retirement years. Other factors, like cost of living and access to healthcare, are often far more important in making a decision on where to spend the rest of your life. As a result, cold-weather states New Hampshire (#1), Maine (#3) and Minnesota (#5) were rated highly by Bankrate. They may not be the best places to work on your golf game or take up paddle boarding, but they do offer better cultural amenities, lower tax and crime rates and large senior populations. And, yes,

And, yes, weather was also factored into Bankrate's ratings, as was cost of living and quality of healthcare options.

The reason Arizona (#11), Florida (#17) and other presumed retiree meccas don't crack the top 10 is largely because they’re more expensive. Retirees are living longer, and those traditional enclaves for older folks drain retirement savings faster than most people are comfortable with. Weather is only a factor in 49 percent of retirees' decision-making processes when choosing a place to live; cost of living (70 percent) and health care (68 percent) are far more important factors to the current crop of people planning for retirement. Here's a breakdown of what the top 10 states in Bankrate's rankings offer retirees, followed by a look at where the 10 states at the bottom of the list come up short.

#1 New Hampshire

New Hampshire's biggest draw may be its retiree-friendly tax code. The state has a 5% income tax, but it only applies to dividends and interest, not to salaries and distributions from retirement savings accounts like IRAs and 401k plans. The state also has no sales tax, and there is little political will to change a system that primarily relies on revenue from property taxes.

Being in the northeast, New Hampshire has a higher cost of living than other parts of the country, but the Granite State is still about 20 percent cheaper than neighboring Massachusetts and 10 percent lower than nearby New York State. Property is also a bargain, with a median home price of $261,400 in the fourth quarter of 2016, compared to $417,400 in the Greater Boston area.

#2 Colorado

While its tax system is not as attractive as New Hampshire's, Colorado still offers breaks for retirees, who are allowed to deduct between $20,000 and $24,000 of their retirement income. And the state's property taxes are among the lowest in the nation. Overall, Colorado's tax burden is 9.02 percent, below the national average of 10 percent.

A retirement in Colorado may also be a longer retirement, as the state boasts an above average life expectancy and the nation's second-lowest obesity rate. Of all the states that made Bankrate's top 10 list, Colorado is most identified with active lifestyles, with an abundance of options for skiers, hikers and outdoor enthusiasts.

#3 Maine

Retirees won’t be alone in Maine. Its median age is second only to Florida and it has the highest percentage of Baby Boomers after New Hampshire.

The state has addressed its growing senior population with five Area Agencies on Aging throughout the state that offer public programs, health insurance counseling, fitness classes, community cafes, and a family caregiver support program. Maine's cost of living is just 0.5% above the national average, although property prices can be steep in desirable vacation locations like Kennebunkport and Mount Desert Island. Like its neighbor, New Hampshire, Maine offers some of the lowest violent crime rates in the United States. Portland offers coastal access and is a two-hour drive from Boston while boasting its own burgeoning restaurant and cultural scenes. Maine Medical Center in Portland is one of the best performing hospitals in the country, according to U.S. News & World Report.

#4 Iowa

While Iowa didn't score higher than nine in any of the eight categories ranked in the BankRate study, it was above average in every category considered with two exceptions -- culture, where Iowa ranked 35th and weather, where Iowa ranked 36th. In other words, Iowa offered a good balance of all the amenities retirees look for when they consider a place to live: a low crime rate, a decent-sized senior population, and access to top-notch healthcare. Iowa also ranked 14th in cost of living. That was the best rank of any of the cities ranked in the top 10 by Bankrate, making it the best choice for people who want to ensure their retirement savings goes far.

#5 Minnesota

There's no getting around it: Minnesota is cold. Only Vermont, North Dakota and Alaska have weather worse than Minnesota, according to Bankrate. Minnesota averages 44.3 inches of snow per year, well above the national average of 25 inches. But retirees who can look past the cold weather and maybe even embrace the snow (snowmobiling, anyone? Minnesota has 20,000 miles of marked trails) will be rewarded with the country's third best healthcare system and assisted living facility costs well below the national average.

And no state in the top 10 ranked higher than Minnesota, at #4, in overall well-being. Maybe that has something to do with the friendly people: the term "Minnesota nice" was backed up by a 2013 University of Cambridge Study which ranked Minnesota the sixth most agreeable, based on 13 years' worth of mood tracking data.

#6 Virginia

Virginia has a growing retiree population known as “half backs,” Northern retirees who started their golden years in Florida but then moved to Virginia when they decided Florida was too hot.

Virginia still offers nine or 10 golfing months every year, but with a lot less humidity than its southern neighbors. Virginia doesn’t tax Social Security benefits and retirees can deduct up to $12,000 in income from retirement account withdrawals. A cost of living that is nine percent above the national average is offset by affordable property; median home prices in the state are $245,200, and Zillow projects that number to fall by about two percent this year.

#7 Massachusetts

#7 Massachusettes

The Bay State’s reputation as “Taxachusetts” is an outdated misnomer, especially when it applies to retirees.

The current state income tax is just 5.1 percent, and the estate tax exemption is just $1 million. On the down side, Massachusetts ranks 45th in the nation in cost of living, and median home prices rose 7.3 percent to $374,000 last year. There are, however, few states in Bankrate’s top 10 that offer as many cultural resources as Massachusetts, and the state’s hospitals are world-renowned.

#8 South Dakota

Social Security, pensions and other forms of retirement income are all tax-free in South Dakota, thanks to the fact that the state does not have income taxes. The state also has low sales taxes and moderate income taxes, making it an attractive option for retirees. Median home prices in South Dakota are $163,700, fueling a cost of living that is 11 percent lower than the national average. While retirees are drawn to South Dakota for a slower pace of life, the economy is booming. Unemployment was 2.8 percent at the end of 2016, meaning retirees who want to take on part-time work will be able to find opportunities.

#9 Wisconsin

The bad news is that Wisconsin fully taxes income from retirement accounts. The good news is that rates are low, ranging from four to 7.65 percent. The state also does not tax Social Security benefits.

The Badger state, according to Bankrate, has the country’s second best hospitals. Retirees are often drawn to the university towns that dot the state and offer cultural amenities while maintaining a small-town feel. Recreational offerings tend to be geared more towards outdoorsy people as opposed to retirees looking to spend time on the beach or the golf course.

#10 Idaho

Idaho’s low cost of living and low crime rate pushed it into the top 10 in Bankrate’s study.

The state is renowned for its outdoor activities, including fly-fishing, skiing, hunting and hiking. While Boise won’t be mistaken for New York City in terms of cultural offerings, the state capital does boast a philharmonic orchestra, a ballet and an opera company. Make no mistake about it: with 43.5 inches of snowfall annually and a single commercial airport in Boise, Idaho can feel both cold and remote. But for some cold-weather loving retirees, that remoteness may be exactly what they’re looking for.

And the Bottom 10.... #41 Mississippi

#41 Mississippi

As far as retirees are concerned, Mississippi is a classic example of you get what you pay for: while it has the lowest cost of living of any state in the country, Mississippi ranked last in culture and 49th in health care quality, according to Bankrate.

#42 California

Blame Hollywood for prizing youth over experience: Bankrate ranked California as being 45th in the nation for its senior population. High taxes and an expensive cost of living didn’t help the state’s ranking, either.

#43 Oklahoma

Decent weather and a low cost of living can’t help Oklahoma overcome the fact that 72 of its 77 counties are federally designated shortage areas for primary health professionals. Oklahoma has just 76 doctors per 100,000 residents, compared to a national average of 220 physicians per 100,000 people.

#44 Nevada

Nevada has no state income tax, but it also ranked last in health care quality. Add in its high cost of living, and retirement in Nevada may seem like too big of a gamble.

#45 Kentucky

With few employment opportunities for people over 65, Kentucky is a particularly bad choices for the 31 percent of adults with little or no retirement savings or pension. Health care and cultural offerings are also lacking in the Bluegrass State.

#46 Louisiana

Hot, humid weather and a high crime rate make Louisiana anything but a party for retirees. Bankrate also ranked the state 46th in “well being,” a score based on Gallup's Healthways Well-Being Index, which measures how satisfied residents age 65 and older are with their surroundings.

#47 New Mexico

New Mexico is one of 13 states that taxes Social Security income. Meanwhile, the country’s highest crime rate can’t help New Mexico overcome the more than 300 days of sunshine it averages annually

#48 Arkansas

Arkansas can take solace that it is no longer 2015, when Bankrate said it was the worst state to retire to. But it stills scores 45th or lower in health care quality, crime, culture and well being.

#49 West Virgina

#49 West Virginia

West Virginia taxes Social Security income and only offers a $8,000 deduction for the state income tax tax for earnings from retirement accounts and pensions. West Virginia also has one of the nation’s highest poverty rates, which is also likely to make it unappealing for retirees.

#50 Alaska

On average, its 34 percent more expensive to live in Alaska than in the rest of the U.S. In the state’s more remote towns, getting to quality health care can mean three hours in a small plane.

Can't find your state? View Bankrate's complete list.