Retirement often brings a slower pace of life, and choosing where to settle can be a great decision. For this study, Bankrate took into account some of the preferences of future retirees and retired owners in choosing the region where to live, after finishing their professional or professional career.
To find objective answers to the question “where to retire”, Bankrate analyzed a group of statistics on the cost of living, public health and other parameters.
Bankrate looked at five broad categories:
- The well-being
The bank rate then placed the heaviest weight on affordability. Home prices have broken record after record since the start of the COVID pandemic and inflation has rocked the US economy in 2022. As a result, many retirees are looking for ways to stretch their savings.
We recognize that there is a lot of subjectivity in choosing where to live in retirement. If you own a paying home in a high-cost area like Boston or San Francisco, affordability may not be a priority for you. And, of course, not everyone loves the sweltering summers of the Sun Belt states that populate the top of our rankings.
The best states to retire in 2022
According to the Bankrate study, Florida is the best state for retirement in 2022, followed by Georgia, Michigan, Ohio and Missouri. Alaska, on the other hand, was in last place in our ranking. The state was dragged down by outstanding scores in affordability and weather. However, Alaska ranked first in one subcategory – its residents bear the lowest tax burden in the country.
Why should retirees choose Florida? The Sunshine State has long been a retirement haven. If you like a hot climate, Florida has the second hottest average temperature, just behind Hawaii. However, the high incidence of hurricanes and tornadoes hurts Florida’s weather rankings.
The state also topped Bankrate’s culture and diversity rankings. If you’re looking for friends of retirement age, chances are you’ll find them in this state where 21% of the population is 65 or older. That’s the second-largest share of people over 65 of any state, according to census data. Meanwhile, for would-be retirees looking for a cultural melting pot, Florida has strong racial diversity and a large LGBTQ population.
Affordability was once a big selling point for Florida retirees, but that edge is fading. The state’s cost of living has increased, although the tax burden remains light. Florida ranks 18th on Bankrate’s Accessibility Index.
The first five remaining:
- Georgia: For retirees considering a move to Georgia, affordability is a big selling point. The state combines a low cost of living and light tax burden to rank 7th in affordability. The weather is another strong point. The state has an average annual temperature of 64 degrees, the fifth hottest in the country. Earthquakes are rare and tornado risk is average. The only downside are hurricanes – Georgia’s small coastline puts it at risk from tropical cyclones. Georgia ranks in the middle of the pack in our rankings for well-being and crime. The state’s only weak spot is in the cultural category — Peach State has one of the nation’s lowest percentages of residents over the age of 65, and it ranks near the bottom in cultural establishments. and entertainment per capita, based on a Bankrate analysis of census data.
- Michigan: This cold state seems like an odd choice for the Top 5, but Michigan has the best affordability in the country, based on a combination of a low cost of living and a light tax burden. The state also performed well on wellness, placing No. 12 in that category.
- Ohio: Another Rust Belt surprise, Ohio performed well in affordability and suffered no major setbacks in other categories.
- Missouri: Missouri, fifth, is affordable and enjoys a relatively moderate climate. However, the Show-Me State’s culture, crime, and well-being scores are below normal.
Experts: How to Choose Your Best State to Retire
Advice from experts who support retirees and future retirees in the decision to consider retirement:
Laura Kovacs, former director of education at the Scottsdale Area Association of Realtors in Arizona and recently retired herself: “Spend time in places you want to live before you commit to moving there. Go to a variety of different places that seem to appeal to you – places with lower cost of living and lower property taxes – and test them out for a while. If you’re interested in Florida, Arizona, or California, stay there for a while and see if you like the weather at the time of year you’ll be living there. Make sure it really is as affordable as you thought. When you’re still working, take the time to go preview different types of communities and different types of lifestyles. And when you’re retired, maybe try renting for a while before you commit to buying.
Clark Kendall, CFP, CFA, is president of Kendall Capital Management in Rockville, Maryland, and author of “Middle-Class Millionaire”: “Family is the biggest consideration. When I see people retiring and moving to different parts of the country, 70-80% of the time it’s to be close to family. Access to medical care is another important factor. From a financial point of view, there are many things to consider. How will your income be taxed? Some states offer tax breaks on retirement income. Maryland not only has an income tax, but we are also one of seven states that have an estate tax. Also consider how you are going to spend your money. Even though Texas and Florida have no income tax, they have higher home insurance costs due to hurricanes. It is difficult to make an overall statement. If you make $100,000 in retirement income and move into a $400,000 house, that’s a different scenario than if you make $1 million and move into a $5 million house.
Ginni Field, a real estate broker in Oceanside, Calif., who specializes in senior buyers and sellers and holds the National Association of Realtors’ Senior Real Estate Specialist designation: “Sometimes people just want to get out of the snow. Other times, they want to be closer to their family. When considering a community, you need to think about what else you want to do. Do you still want to be able to play golf, tennis or pickleball? What is of vital importance for people in this age group is medical care, access to shops and public transport. I have a client who is 83 years old [years old] who didn’t want to live in a community of working adults because they had predetermined it would be filled with old people. I showed her around a community and she fell in love with it.
To read the full analysis, including charts and methodology, click here.