Personal Finance

Here Are 2017's Best and Worst States to Retire

Retirees With Dog In Park

Deciding when to retire is a major decision, but choosing where to retire is equally important. Once you move over to a fixed income, it becomes even more critical to live someplace where your retirement dollars can go the furthest. WalletHub recently analyzed all 50 states plus the District of Columbia across numerous measures of retirement-friendliness, including cost of living, health factors, crime, entertainment, and overall quality of life. If you're thinking of retiring in the near future, it pays to review these findings to see how your state ranks -- and whether you ought to consider a move to someplace more retiree-friendly.

Retirees With Dog In Park

IMAGE SOURCE: GETTY IMAGES.

Where should you live in retirement?

There are many factors that will determine where you'll retire. Proximity to family, for example, might be a priority for you, whereas climate might be paramount for somebody else. But generally speaking, there are certain qualities that make some states more suitable for retirees than others, so it's good to have a basic idea of where your state falls in the ranks.

Here's how WalletHub rates all 50 states and the District of Columbia on the whole:

Overall Rank State Overall Rank State
1 Florida 27 Kansas
2 Wyoming 28 Oklahoma
3 South Dakota 29 Tennessee
3 Iowa 30 Nebraska
5 Colorado 31 Illinois
6 Idaho 32 California
7 South Carolina 33 Louisiana
8 Nevada 34 Indiana
9 Delaware 35 Massachusetts
10 Wisconsin 36 Alabama
11 Pennsylvania 37 Maryland
12 Montana 38 North Dakota
13 Arizona 39 West Virginia
14 Missouri 40 Mississippi
15 Michigan 41 New York
16 Washington 42 Arkansas
17 Utah 43 Kentucky
18 Texas 44 Vermont
19 Virginia 45 New Mexico
20 Georgia 46 New Jersey
21 Minnesota 47 Hawaii
22 Maine 48 Connecticut
23 North Carolina 49 District of Columbia
24 New Hampshire 50 Alaska
25 Ohio 51 Rhode Island
26 Oregon

DATA SOURCE: WALLETHUB.COM.

Because WalletHub considered factors outside of finances alone when developing its rankings, the above list doesn't necessarily tell you which states are the most affordable for retirees. The following table, however, ranks all 50 states plus the District of Columbia by affordability alone:

Affordability Rank State Affordability Rank State
1 Florida 27 Colorado
2 Alabama 28 Michigan
3 Texas 29 Indiana
4 Wyoming 30 Oregon
5 Tennessee 31 Washington
6 Nevada 32 Illinois
7 South Carolina 33 Wisconsin
8 Mississippi 34 Kansas
9 Louisiana 35 New Hampshire
10 Delaware 36 New Mexico
11 Georgia 37 Maine
12 Oklahoma 38 Alaska
13 West Virginia 39 Maryland
14 Idaho 40 Nebraska
15 South Dakota 41 New Jersey
16 Kentucky 42 California
17 Arkansas 43 North Dakota
18 North Carolina 44 District of Columbia
19 Virginia 45 Minnesota
20 Pennsylvania 46 New York
21 Arizona 47 Massachusetts
22 Missouri 48 Vermont
23 Montana 49 Connecticut
24 Ohio 50 Hawaii
25 Utah 51 Rhode Island
26 Iowa

DATA SOURCE: WALLETHUB.COM.

You'll notice that Florida, Wyoming, South Carolina, Nevada, and Delaware all fall into the top 10 in terms of overall rank and affordability, which makes them strong contenders for retirees across the board. Meanwhile, Rhode Island, Hawaii, New Jersey, and Connecticut not surprisingly rank pretty low on both lists. After all, it's hard to enjoy a good quality of life when the cost of living renders basic necessities, like housing, expensive or downright unaffordable. That said, if you have your heart set on retiring someplace like Hawaii, you can achieve the goal of moving there if you save well enough during your working years.

How much income will you have to work with?

Choosing the right place to retire is very much a matter of seeing how far your fixed income will go. But the more you save independently, the more choices you'll have as you get older.

Keep in mind that Social Security probably won't be enough to sustain you financially in retirement even if you limit your choices to the most affordable states on the list. Social Security will only replace about 40% of the average worker's pre-retirement income, but most of us need 70% to 80% of that figure once we stop working. You might manage to get away with a lower threshold, like 60% of your former income, if you move from a more expensive state to one with a significantly lower cost of living. But for most people, Social Security alone just won't suffice.

In fact, the average Social Security recipient today receives just $1,360 a month in benefits -- hardly enough to cover everything from housing to food to healthcare. Whether you're a few years or a few decades away from retirement, now's the time to ramp up your savings efforts. Workers under 50 can currently contribute up to $18,000 a year to a 401(k) and $5,500 to an IRA. These limits increase to $24,000 and $6,500, respectively, for workers 50 and older.

While many of today's workers can't afford to max out their contributions, setting aside a smaller amount each month can go a long way over time. Saving $200 a month for 30 years, for example, will give you an ending balance of $272,000 if your investments generate an average annual 8% return. The better you're able to save on your own, the more comfortable a lifestyle you'll be able to buy in the future -- regardless of where you ultimately choose to retire.

The $15,834 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $15,834 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies .

The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More