It’s common for retirees to move. Whether it be downsizing into a smaller home to generate cash and reduce expenses or moving to another state, moves can be part of the retirement equation for many clients.
As advisors know, a retirement move is like any other real estate transaction in that it’s all about the three L’s: location, location and location. Where retirees, particularly those that move from one state to another, end up is very much a function of their starting points. For example, many retirees from the New England/New York region often end up in Florida while their counterparts in California often gravitate to Arizona and Nevada.
Other retirement moves are inspired by family – grandparents moving closer to the grandkids that live in another state. Point is the best and worst states for retirees are only applicable on a client-by-client basis because each client has specific goals and needs.
That said, there are some locations that simply make more sense than others for retirees, particularly when accounting for multiple factors.
Florida Takes the Cake
Wallet Hub’s recently released survey of the best and worst states for retirement takes into account affordability, healthcare and quality of life.
Here are the top 10 states for retirees, according to the research firm: Florida, Colorado, Virginia, Delaware, Wyoming, Idaho, New Hampshire, Minnesota, Montana and Pennsylvania. The bottom 10 are as follows: Illinois, Arkansas, Washington, New York, Louisiana, Oklahoma, Rhode Island, Mississippi, New Jersey and Kentucky.
As the top 10 group indicates, weather isn’t a major factor because, excluding Florida, snow is an issue in the other nine states. Likewise, income tax doesn’t prevent some states from ranking poorly for retirement. Washington State has no income tax and those taxes are low in Oklahoma, but those states are among the worst retirement, according to Wallet Hub. Of course, it’s not all about income tax. Take the case of Virginia.
“Virginia is the third-best state for retirement, in part because it has some of the best elder-abuse protections in the country. This makes seniors physically safer and less vulnerable to being taken advantage of financially. The state has high-quality geriatrics hospitals and a lot of doctors and dentists to choose from, too,” notes Wallet Hub. “On the financial side, Old Dominion lacks an estate or inheritance tax and is the tenth most taxpayer-friendly state. Outside of that, though, it’s not a particularly cheap state to live in.”
Translation: A state can be advantageous to retire in even if it has lofty real estate prices, as is the case in many of Virginia’s most desirable areas.
Cheap Isn’t Always Good
Assuming a client has told an advisor they want to move upon retirement, a significant part of the conversation should involve the old saying of “you get what you pay for.”
As Wallet Hub notes, three of the five states for lowest adjusted cost of living and lowest annual in-home services are also among the 10 worst states to retire in – Louisiana, Mississippi and Arkansas. Conversely, Colorado and New Hampshire have some of the priciest in-home services, but they’re also ranked among the top states in which to retire.
Related: How To Extract Income From Bitcoin