Worst States to Retire

[youbet]

DW and I can't understand why Illinois is not on the list. Except for a few years away at school, we've lived here all our lives. We stay because of family, especially a special-needs grandson. Otherwise, we'd be out of here in a flash.

 

[Fermion]

How is Washington a high-tax state? Asking sincerely, because I'm considering moving there... in large measure, in effort to reduce income tax.

As for other criteria, not all of us are part of a kin-network. If one does not have relatives, and one isn't part of a community, then essentially all places (within reason) become fungible.

Washington is fairly high on sales tax, which I guess could cost you quite a bit more than income tax would in retirement. Say you were pulling some money from a Roth. It would be better to live in a state with a low sales tax like 4% and have some state income tax (like 6%) than live in a state like Washington which can have a 10% sales tax. It can be a lot of money on big ticket purchases.

 

[AudiDudi]

How is Washington a high-tax state? Asking sincerely, because I'm considering moving there... in large measure, in effort to reduce income tax.

As for other criteria, not all of us are part of a kin-network. If one does not have relatives, and one isn't part of a community, then essentially all places (within reason) become fungible.

Sales tax is high - approaching 10% in some areas. RE tax is high in western WA. Fuel tax is really high. No income tax is nice. We lived in WA for over 20 years and had reasonably good salaries so the no income tax was a good thing. Retired in 99 and moved to Nowhere, Montana so no sales tax, and now we are spending some of the non-income taxed money which is also a good thing. We snowbird to AZ so enjoy nice weather most of the year.

 

[scrinch]

It would be interesting for each of us to see and play with a "retirement desirability" spreadsheet like the one they probably made for that article. For some of us affordability is an issue...for others not. For some, family is an issue, or friends, or politics, or humidity. For others not. Each of us should adjust the weight factors according to our own priorities.

 

[brett]

I do not believe in the best state/worst state or best country/worst country in which to retire articles. They are incredibly broad at the very least.

It is all dependent on personal situation and personal preferences. Lots of great states, great countries in which to retire.

I would say that the worst states/countries are those, for whatever reason, you have no desire to relocate to or live in.

IMHO the majority of these articles are nothing but click bait.

 

[ShokWaveRider]

IMHO the majority of these articles are nothing but click bait.

Most if not ALL articles posted on the internet are clickbait, that is the objective and why people write and post them. I laugh when anyone says such and such is clickbait, they all are. Some people just resort to saying say something is clickbait if they do not agree with them for any reason. They are just opinions or someone's interpretation of the facts, fiction, disinformation or all of these that they have found. Just take a look at YouTube.

 

[euro]

I'm in #3 what do I win?
I agree, it is terribad here. Stay far away.

FWIW I'd love to be back in your neck of the woods, even at #3! Spent 7 years in Seattle and have yet to find a place quite like it!

 

[Chuckanut]

Washington is fairly high on sales tax, which I guess could cost you quite a bit more than income tax would in retirement. Say you were pulling some money from a Roth. It would be better to live in a state with a low sales tax like 4% and have some state income tax (like 6%) than live in a state like Washington which can have a 10% sales tax. It can be a lot of money on big ticket purchases.

There is also an excise tax on capital gains above $250,000. In any other state it’s called an income tax. This is the camel getting his nose into the tent, IMO.

Sales taxes are high, the carbon tax raises energy prices, property taxes are rising, and in my area we pay big tax for the new transit system

Food costs are among the highest in the country. Add in high housing costs which drive other costs up and it gets expensive fast. That burger flipper at McDonalds has to make $20 an hour to afford to live here.

It’s a trend that seems to point higher every year.

 

[GravitySucks]

I like their criteria. And I sort of agree with the conclusions, although the devil is in the details.

For example, branding a whole state as among the worst doesn't take into account regional differences. There are places in NY, TX and AK where I'd be glad to live. Maybe even CA. Note that those include states on opposite sides of the tax scale, not to mention weather. Obviously everyone needs to come up with their own criteria.

One thing I question about all of these "best" and "worst" lists is they often only look at cities. Using NYC as your sample, instead of some rural, upstate NY backwater, can make a huge difference in the affordability scale. The methodology isn't really explained in this click-bait article. But it does make a nice conversation starter.

I’m in the Upstate back waters and agree.
SS is not taxed. First $20k of IRA withdrawals not taxed. Property/ School taxes halved at age 65.

15 minute drive to 3 hospitals.

Low crime village. (But right outside a high crime city).

Winters are tough but it’s a good time to travel.

 

[Diogenes]

There is also an excise tax on capital gains above $250,000. In any other state it’s called an income tax. This is the camel getting his nose into the tent, IMO.

Sales taxes are high, the carbon tax raises energy prices, property taxes are rising, and in my area we pay big tax for the new transit system

Food costs are among the highest in the country. Add in high housing costs which drive other costs up and it gets expensive fast. That burger flipper at McDonalds has to make $20 an hour to afford to live here.

It’s a trend that seems to point higher every year.

The capital gain situation is most unpleasant. But if I understand correctly, it doesn't apply to dividend distributions, correct? So, if Smith is a UHNWI with an 8-figure taxable index fund portfolio at Fidelity, never trades, never makes redemptions... but has to deal with quarterly dividend distributions... then WA won't tax dividends above $250K/year, correct?

In a number of states, there is a tax-break on pensions, SS income, RMDs, 401K redemptions and the like. Also generous over-65 exemptions. For retirees for whom these vehicles are a large part of their income stream, these tax-breaks can make an important difference. "Best places to retire" articles generally pick up on that. They also tend to assume couples, not singles.

That doesn't apply if you're a former NFL star-player with $70M, all taxable, all in QQQ, retired at 37. It may then be possible, that Alabama or Nebraska are going to be costlier, all-in, than WA. It's a fanciful and hyperbolic example, but illustrates a point: for some people, an extra 4% marginal income tax rate is much, much costlier than an extra $2000/ month in housing costs.

 

[Qs Laptop]

I'm wondering why Minnesota is number 10 on the list? Yeah, the weather sucks, but it's listed as only 10% of the criteria used for their determination. Affordability? Yes, Minnesota has high taxes. But the cost of most other things is near the USA average.

What is well-being? Article says, "Includes factors such as the number of adults over 62 per 100,000 residents and access to food and health care." Minnesota has excellent health care and we're in the farming belt, we're number one in turkey production, and Hormel foods world headquarters is here, so we've got access to food. (Who doesn't have access to food?)

Quality and cost of healthcare? Minnesota's consistently one of the top three states in this area.

So I don't understand why Minnesota is ranked number 10 in worst states to retire in.

And I'm looking to move out of the state.

 

[skipro33]

No surprise CA and NY are always in the list, however plenty of retirees live a happy life there

I'm retired in California, and I must say, I'd never leave it for the problems it now has. Afterall, they are not MY problems. Homelessness; nope. Got my home. Cost of insurance, groceries, gas, water, etc. Nope, I'm funded. Crowded; nope, it's a big state after all and almost all the population lives in two densely populated areas. Easy to just pick one that fits your ideal. For me, it's mountains with its camping, fishing and skiing.
Politics: I cancelled my daily newspaper and quit watching Lester Holt on the evening news. It's so easy to ignore their barking if you chose not to listen to them! Maybe someday that will catch up to someone, but at my age, nope! I'm more likely to die before the politicians can seriously interrupt my lifestyle. Taxes: Nope, I pay under 10% of my taxable income to the state. Sales tax, no worse than other states, property tax, capped with Prop.13, gas tax is high, but our cars get over 30 miles per gallon, so it's hardly much of our monthly budget anyways. I spend more per month on water, electric, trash and TV/internet than fuel. I will say that the roads are awful, but if I were in charge, I'd doze all the pavement, make everything a dirt road and relax while driving instead of the Indy500-style it is today. But that's hardly a California issue, it's our national culture. Medical care; never had any problems seeing a doctor, hospital care or dental care for that matter. Crime? Living in a rural county, our sheriff issues 'concealed carry' permits to anyone who hasn't a felony and within 2 weeks of application. He says it makes his job easier in a mountainous and large county he's tasked to patrol. I've never been a victim of any conventional crime while living here. The only one I'm aware of with friends, neighbors and family is stuff taken from a garage left open overnight.
With both enough funding and a mindset that you are satisfied with what that amount is, California has the best weather, food, outdoor activities and most of all my family, than any other place.
Income from pension and Social Security is $10K monthly after taxes. Basic expenses are $3,500 monthly. Budget is $5,000 monthly. We bank the rest until we have a year's worth, then blow it on property improvements. With 5 acres, we now consider our place an estate, not a house in the woods. We grow most of our own food, harness our own electricity via solar, Shop with value in mind instead of wasting it on things. For our lifestyle, California is our ideal.

 

[Walt34]

For once West Virginia didn't lead the list or is even on it, but Maryland is. But I grew up and lived in MD for 52 years, and yeah, Baltimore is not the place anyone who has a choice wants to live. But western MD and parts of the eastern shore are both beautiful and affordable. And even Baltimore has Johns Hopkins and the docs there are reported to know a thing or two about fixing up sick people.

 

[Pointby2]

Crime (5%): Examines factors such as the amount of property crimes and violent crimes per 100,000 residents.

State crime rates are meaningless. City crime rates or neighborhood crime rates, sure. But the crime rate in Los Angeles doesn't affect you if you live in a low crime area, which there are plenty of in California. We live between Irvine and Yorba Linda, two cities that appear on "safest places to live" studies.

 

[Koolau]

There are lots of nuances that such sites can't adequately cover when considering where to live. For instance, Hawaii is considered a "high tax" state, but based on being retired and of a certain age, I consider our state taxes quite low.

Now, if you w*rk in the state and are under 65 and live in a big SFH and buy lots of stuff, your taxes may be extreme. So it all depends on individual circumstances (i.e, YMMV.)

 

[neihn]

I am in Washington, but right at the border with Oregon, and Oregon is not on the list. I guess I am ok

 

[Texas Proud]

Skip.... you forgot about all those wildfires it seems you have to dodge...

Saw on the news that Paradise was evacuated this year after burning down in 2018...

 

[CaptTom]

Most if not ALL articles posted on the internet are clickbait, that is the objective and why people write and post them. I laugh when anyone says such and such is clickbait, they all are...

I can't disagree with that. But to be clear, when I use the term "click bait" I'm generally referring to a poorly-written piece which no-one put much time into researching, writing or proof-reading. Just a fluff piece designed solely to draw clicks, views, readers, plays or whatever. There is still some good journalism out there, it's just really hard to find among all the crap.

 

[skipro33]

Skip.... you forgot about all those wildfires it seems you have to dodge...

Saw on the news that Paradise was evacuated this year after burning down in 2018...

The percentage of California private property damaged from wild fire is a small amount compared to damage elsewhere from tornadoes, hurricanes, floods, etc. as evidenced by FEMA aide not approved because there simply isn't enough Personal loss. We get some Red Coss assist , but almost no FEMA. I can do something about my property to protect it from fire, but as far as I can tell, not possible to build tornado or hurricane proof homes.

 

[Diogenes]

There are lots of nuances that such sites can't adequately cover when considering where to live. For instance, Hawaii is considered a "high tax" state, but based on being retired and of a certain age, I consider our state taxes quite low.

Now, if you w*rk in the state and are under 65 and live in a big SFH and buy lots of stuff, your taxes may be extreme. So it all depends on individual circumstances (i.e, YMMV.)

Retirees with decades to go before canonical age (65?) would indeed have very different considerations. Likewise if income is from taxable investments, as opposed to pensions.

One of these days, I hope to stumble across a "best place to claim residency, if you have $XYZ"... especially for single filers. But I haven't seen such writing, whether on the internet or elsewhere. This is because "best of..." lists assume that affluent people, also consume a lot... nice houses, cars and so on. Now imagine Fafner the dragon, guarding his treasure, but otherwise doing nothing and consuming nothing. Where should Fafner live?

 

[teej1985]

Crime (5%): Examines factors such as the amount of property crimes and violent crimes per 100,000 residents.

State crime rates are meaningless. City crime rates or neighborhood crime rates, sure. But the crime rate in Los Angeles doesn't affect you if you live in a low crime area, which there are plenty of in California. We live between Irvine and Yorba Linda, two cities that appear on "safest places to live" studies.

Parts of Anaheim are not so great though.

 

[wrigley]

I must say I agree with all of them, we have been to all of them too. We would never move to them to live out our golden years. We are quite happy with NE Florida as seen by our 18 years retired here. Hurricanes or no Hurricanes, all places have their issues.

I'm right there with you. Stay dry the next couple of days!

 

[Andre1969]

I have a feeling that Maryland gets hit hard because of its inheritance tax, high crime, tax on retirement income, and high housing costs. But I think the only way inheritance tax gets you is if you're not a direct-line descendant (parent/child/grandchild etc). So if you inherit from an aunt, uncle, sibling, cousin, step-parent, etc, it'll hit you. But, it's only going to hurt you, really, if you're depending on every penny of that inheritance. Otherwise, it's just an annoyance.

Housing is expensive on average, but that's because there are a lot of really expensive areas that drag the average up. As for high crime, well I don't know about the past year or two, but traditionally, Baltimore city accounted for around 60% of all homicides in Maryland. Take Baltimore out of the equation, and the rest of the state is basically Mayberry in comparison, when it comes to homicides. And, even Baltimore is on the mend. It also has its good and bad areas. It's not like the whole city is a No-Go Zone.

And, as others have said, it's hard to base anything on an average. For instance, while Maryland ranks the 8th worst state, I'd imagine that if you're on the Eastern Shore, your overall experience is probably closer to that of Delaware, which is ranked the best state (or 50th worst). And, get into Northern Maryland, or Western Maryland, and the vibe is probably more like equivalent bordering areas of Pennsylvania, Virginia, or West Va.

 

[marko]

Worst/best for whom??
Some places are best for those with little money, while, if you have a lot of resources, your options change.

A well resourced individual can be quite happy in what might be considered a less desirable area, as evidenced by a few comments above. Money can buy a lot of insulation from the criteria of best/worse.

(I spent a lot of time in China. It's a great place to live.....if you're a billionaire!)

 

[Koolau]

Worst/best for whom??
Some places are best for those with little money, while, if you have a lot of resources, your options change.

A well resourced individual can be quite happy in what might be considered a less desirable area, as evidenced by a few comments above. Money can buy a lot of insulation from the criteria of best/worse.

(I spent a lot of time in China. It's a great place to live.....if you're a billionaire!)

That's why it's so important to have the raw data on the various aspects that make for a "good" or a "bad" state. If you're retired, no kids, reasonably big stash, paid off home, etc., you're in a much better "state" than if you are still w*rking, have a house full of kids - needing private school to get even a half decent education, paying a mortgage, on and on and on, etc.

The difference between these two scenarios in Hawaii, for instance is almost literally night and day. Other states probably don't have as sharp a dividing line between my two suggested life-styles here.

Letting anyone else "boil down" the good, the bad and the ugly to come up with a state rating seems a waste of time. Maybe it's a place to start, but I'd want to dig into the specific details myself before deciding "best" vs "worst." Clearly, YMMV.