Retirement often brings a slower pace of life. No more sweating work deadlines, playing office politics or struggling to stay afloat in a city with a soul-crushing commute and a punitive cost of living. The end of your career also raises new questions about where and how to spend your days now that you’re no longer tied to a specific location.
Should you settle down by the beach or in the mountains? Do you prefer golf or cross-country skiing? Perhaps most importantly, where do your kids, grandkids, friends and health care providers live? Those are deeply personal questions. To find some objective answers to the where-to-retire question, Bankrate crunched a bevy of statistics on costs of living, public health and other metrics.
For this study, Bankrate looked at five broad categories: affordability, wellness, culture, weather and crime. We placed the heaviest weighting on affordability. Home prices have shattered one record after another since the COVID pandemic began, and inflation rocked the U.S. economy in 2022. As a result, many retirees are looking for ways to stretch their savings.
We acknowledge there’s plenty of subjectivity in choosing a place to live in retirement. If you own a paid-off home in a high-cost area like Boston or San Francisco, maybe affordability isn’t a priority for you. And, of course, not everyone likes the sweltering summers of the Sun Belt states that populate the top of our rankings.
The best states to retire in 2022
According to Bankrate’s study, Florida is the best state for retirement in 2022, followed by Georgia, Michigan, Ohio and Missouri. Alaska, on the other hand, held last place in our ranking. The state was dragged down by back-of-the-pack scores in affordability and weather. Alaska did rank first in one subcategory – its residents bear the nation’s lowest tax burden.
Why should retirees pick Florida? The Sunshine State has long been a haven for retirees. If you like a warm climate, Florida has the second-hottest average temperatures, right behind Hawaii. However, the high incidence of hurricanes and tornadoes hurts Florida’s weather ranking.
The state topped our ranking of culture and diversity. If you’re looking for retirement-age friends, you’ll have a good chance of finding them in this state where 21 percent of the population is age 65 and older. That’s the second-largest share of 65+ folks of any state, Census data shows. Meanwhile, for potential retirees seeking a cultural melting pot, Florida boasts solid racial diversity and a significant LGBTQ population.
Affordability was once a big selling point for Florida retirees, but that advantage is fading. The state’s cost of living has been rising, although the tax burden remains light. Florida ranks No. 18 in Bankrate’s affordability index.
The rest of the top five:
- Georgia: For retirees considering a move to Georgia, affordability is one big selling point. The state combines a low cost of living and a light tax burden to rank No. 7 in affordability. Weather is another strong point. The state has an average annual temperature of 64 degrees, the fifth-warmest in the nation. Earthquakes are rare, and tornado risk is about average. The one downside is hurricanes — Georgia’s small coastline puts it at risk of tropical cyclones. Georgia places in the middle of the pack in our rankings for both wellness and crime. The state’s only weak spot is in the culture category — the Peach State has one of the nation’s lowest percentages of over-65 residents, and it ranks near the bottom in arts and entertainment establishments per capita, based on a Bankrate analysis of Census data.
- Michigan: This cold-weather state seems an odd choice for the Top 5, but Michigan boasts the best affordability in the nation, based on the combination of a low cost of living and a light tax burden. The state also did well in wellness, placing No. 12 in that category.
- Ohio: Another Rust Belt surprise, Ohio scored well on affordability and didn’t suffer any major setbacks in other categories.
- Missouri: Fifth-place Missouri is affordable and has a comparatively moderate climate. However, the Show-Me State’s culture, crime and wellness scores are subpar.
Experts: How to pick your best state to retire
Considering a retirement move? Here’s advice from experts who help retirees and soon-to-be-retired workers through the decision:
Laura Kovacs, former director of education at the Scottsdale Area Association of Realtors in Arizona and a recent retiree herself: “Spend some time in places where you want to live before you commit to moving there. Go to a variety of different places that you seem to be attracted to — places that have a lower cost of living and lower property taxes — and test them out for a while. If you’re interested in Florida or Arizona or California, stay there for a while and see if you like the climate at the time of year you’re going to be living there. Make sure it’s really as affordable as you thought. When you’re still working, take some time to go preview different types of communities and different types of lifestyles. And when you’ve 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 retire and move to different parts of the country, 70 to 80 percent of the time, it’s to be close to family. Access to medical care is another important factor. From a financial perspective, there are a lot of 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’re also one of only seven states that has an estate tax. Look at how you’re going to spend your money, too. Even though Texas and Florida have no income tax, they do have higher homeowners insurance costs because of hurricanes. It’s hard to make a blanket statement. If you’re making $100,000 in retirement income and moving to a $400,000 house, it’s a different scenario than if you’re making $1 million and moving to a $5 million house.”
Ginni Field, a real estate broker in Oceanside, California, 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 family. When you’re considering a community, you have to think about what you still want to do. Do you still want to be able to play golf, tennis or pickleball? What’s vitally important for people in that age group are medical care, access to shopping and public transportation. I have one client who’s 83 [years old] who didn’t want to live in an active adult community because she had pre-determined that it would be filled with old people. I showed her around one community, and she fell in love with it.”