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Best States To Retire 2021

Many of us look forward to the day that we retire. All of the years of hard work will be behind us, and we’ll be able to begin to enjoy the fruits of our labors. Some of us have even planned where we will retire. Maybe it’s a state known for warm sunshine or beautiful beaches. Perhaps it’s a state with rolling fields and beautiful countryside. Perhaps you want to retire in a beautiful condo in the middle of all of the action.

Whether retirement is many years away or you’re counting down the days, it’s never too early or too late to begin researching your options for retirement – starting with the states that are ranked as the best for retirement.

It’s important to note that there is no definitive measure of the best state for retirement. However, some publications and think tanks have used several factors to compile their lists of the best states for retirement.

Kiplinger created a list using the following factors used to determine the ranking of all 50 states:

Best States for Retirement

Based on these factors, South Dakota, Hawaii, and Georgia are the best states for retirement.

Below are the ten best states for retirement.

1. South Dakota

South Dakota ranks as the best state for retirement in the United States. The average cost of living in South Dakota is 4% below the national average, including healthcare costs. South Dakota has one of the highest numbers of arts, entertainment, and recreation businesses per capita. The average annual spending for a comfortable retirement is about $60,998. Additionally, South Dakota is the third-most tax-friendly state in the U.S. with no state income tax, which means Social Security benefits and other retirement income are not taxed.

2. Hawaii

Hawaii is the second-best state for retirement in the country. Although Hawaii has the highest cost of living in the United States, the average household income for people ages 65 and older is 33.8% above the national average at $71,997, and healthcare costs are 11.4% below the national average. Hawaii also has a beautiful landscape that many retirees consider to be their ideal retirement location.

3. Georgia

Georgia is the third-best state for retirement. Georgia’s cost of living is about 7% below the national average and has the sixth-lowest average cost for a retired couple in the U.S. Georgia also has favorable tax conditions. Social security is exempt from state taxes in Georgia and up to $35,000 of most types of retirement income for those between 62 and 64, and up to $65,000 per taxpayer 65 and older ($130,000 per couple). Combine all of that with warm summers and mild winters, and Georgia is an ideal retirement state.

4. North Dakota

North Dakota is the fourth-best state for retirement in the U.S. The cost of living in North Dakota is just 1% above the national average, but average healthcare costs for a retired couple are below average at $414,455. The annual spending for a comfortable retirement in the state is about $61,222, and it is considered tax-friendly, with state income tax ranging from 1.01% to 2.9% and property taxes are 1.01%.

5. Tennessee

Tennessee ranks fifth for the best states to retire, especially for budget-conscious retirees. Tennessee’s cost of living is 12% below the U.S. average, and the state does not levy state income taxes, helping retirement income go further. Tennessee’s annual spending for a comfortable retirement is $55,425, the seventh-lowest in the country.

6. Alabama

Alabama is the sixth-best state for retirement in the United States. Alabama has mild winters, beaches, and golf topped off by a cost of living that is 13% below the national average. Alabama’s highest state income tax rate is only 5%, and Social Security benefits and income from traditional pension plans are exempt from income tax. Additionally, Alabama has the second-lowest property taxes in the U.S. at a rate of 0.42%, and all homeowners 65 or older are exempt from state property taxes.

7. Virginia

The seventh-best state for retirement in Virginia. Unfortunately, the beautiful scenery and charm of Virginia come with the cost of living 7% above the U.S. average; however, the average income for households 65 and older is $59,869 to cover it. Additionally, healthcare costs for a retired couple are below average at $408,950. Virginia does not tax Social Security benefits, and those 65 and older can deduct up to $12,000 per person.

8. Florida

Florida is the eighth-best state for retirement. Florida has the highest share of seniors of any state in the U.S., comprising 19.1% of the population. Florida has warm winters, miles of beaches, and the cost of living is about average. Florida has no state income tax, estate tax, or inheritance tax, and the state does not tax Social Security or other retirement income.

9. New Hampshire

New Hampshire ranks ninth for the best state for retirement. New Hampshire has a cost of living that is 18% above the national average; however, this is partially balanced out by the tax situation. New Hampshire does not tax Social Security benefits or other retirement income and does not levy any sales tax. Additionally, New Hampshire ranks fifth in the country for the best senior healthcare.

10. Utah

Utah finishes the top ten list of best retirement states. Utah is a great state for retirees who love to be outdoors and stay active with five national parks, five national forests, and 43 state parks. Utah ranks second out of all 50 states for the overall health of its senior population. While the cost of living is slightly above average (4% above) and Utah isn’t tax-friendly, it has the third-lowest poverty rate in the U.S. for people 65 and older.

Here are the 10 states with the highest cost of retirement:

  1. Hawaii ($99,170)
  2. California ($71,809)
  3. New York ($69,847)
  4. Massachusetts ($69,279)
  5. Oregon ($68,712)
  6. Maryland ($67,214)
  7. Alaska ($66,956)
  8. Connecticut ($66,543)
  9. New Jersey ($64,736)
  10. Rhode Island ($62,413)

Best States To Retire 2021


Best States To Retire 2021

State Yearly Expenses Comfortable Retirement Savings Required
New Mexico$47,184$56,621$883,291
West Virginia$47,546$57,055$787,357
North Carolina$48,733$58,480$865,499
South Carolina$49,507$59,408$784,197
North Dakota$50,850$61,020$823,764
South Dakota$50,850$61,020$738,337
Arizona$52,140$62,568$1.01 Mn
Delaware$55,289$66,347$1.01 Mn
New Hampshire$55,960$67,152$946,850
Nevada$56,373$67,648$1.01 Mn
Washington$56,890$68,268$1.09 Mn
Vermont$60,348$72,418$1.08 Mn
Maine$60,555$72,666$1.09 Mn
Rhode Island$62,413$74,896$1.07 Mn
New Jersey$64,736$77,683$1.20 Mn
Connecticut$66,543$79,852$1.25 Mn
Alaska$66,956$80,347$1.34 Mn
Maryland$67,214$80,657$1.11 Mn
Oregon$68,712$82,454$1.34 Mn
Massachusetts$69,279$83,135$1.16 Mn
New York$69,847$83,816$1.41 Mn
California$71,809$86,171$1.46 Mn
Hawaii$99,170$119,004$1.84 Mn

Best States To Retire 2021