Traveller in the Badlands National Park
Eastcott Momatiuk/Getty Images

If you move to the best state to retire, it’ll be 20 degrees on Christmas, you’ll land about 1,300 miles from either the Atlantic or Pacific Ocean, and your adopted home will have fewer people than each of the 15 largest cities in the nation.

If you move to the best state to retire, then, you’ll live in South Dakota with nary a palm tree.

The Mount Rushmore State, population of about 870,000, finished atop Bankrate’s most recent Best State for Retirement ranking, which was surprising. The picture we have of our golden years usually involves sandy beaches and colorful drinks with tiny umbrellas — not the Badlands.

But there are reasons South Dakota came out on top, beating out warmer retirement meccas. And those reasons should inform how, and where, you end up spending the last third of your life.

Why it’s the best state to retire

Our ranking rated all 50 states in seven categories — cost of living, taxes, health care quality, weather, crime, cultural vitality and overall well-being — and then weighed those scores based on a 2017 survey in which we asked respondents what was important to them if they were to move to a new home in retirement.

Therefore, states that did well in most categories tended to outperform others. Case in point, South Dakota.

Despite ranking 38th for weather, thanks to an average annual temperature around 45 degrees, South Dakota scored in the top quartile in each of the other groups. While you may endure some frigid nights, nearly every other aspect of the average South Dakotan retiree’s life is peachy-keen.

A few rankings stand out, though, one of which is typical of a retirement destination: taxes. (Along with cost of living, tax rankings were given a 20 percent weight.)

South Dakota, according to the 2018 State Business Tax Climate Index, ranked second in tax burden, driven by a lack of individual taxes. Low taxes are a boon to retirees who live on a fixed income, one of the reasons Florida and Nevada – whom the Tax Foundation place 5th and 6th, respectively – tend to attract retirees.

But it’s another category, well-being, that supplies the lesson you should take from its surprise victory.

What you want in retirement

Gallup-Sharecare’s annual “State of American Well-Being” report is rife with interesting data.

The goal of the report is to capture “how people feel about and experience their daily lives.” What could be more germane to prospects of a retiree, one who’s identity as a worker or business owner recedes, leaving a void to be filled?

Each state receives a ranking on the Well-Being Index based on the results 2.5 million surveys. Gallup-Sharecare drills down on five key elements to create their ranking:

  • The purpose you feel when you wake up in the morning.
  • The social relationships in your life.
  • The ability to increase your financial security and manage money-related stress.
  • The sense of community you feel.
  • How your body tells you each day.

These are important areas of endeavor.

What makes for a happy retirement

Retirement, in essence, is the maximization of leisure time. Freed from the 40-hour workweek, you must cobble together a new arrangement of hobbies, tasks and entertainment. Research shows spending on experiences leads to more happiness, as do strong relationships with your spouse and friends.

South Dakota placed first in the ranking, including finishing in the top 10 in every category, save social.

If you are disposed to relocating when you leave the workforce, by all means, strongly consider the natural beauty of South Dakota. If not, take heed of Gallup-Sharecare’s report.

Americans, by and large, understand they must save throughout their lives if they are to enjoy a financially sound retirement – even if many don’t or can’t.

But we are less focused as a society on those other aspects of life that make for a fulfilling retirement. The value of nurturing friendships and marriages. The pride you feel living in a town that you’ve come to call home. The discovery of hobbies and general interests outside of work.

As you tend to your 401(k) every paycheck, take time to tend to those other aspects of life as well. Your retirement happiness may depend on it.

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