The Worst States to Retire in 2024

The worst states to retire in have high taxes and living costs, lack access to affordable healthcare, and rank poorly for other quality-of-life factors, like weather and crime. If you're starting to think about where you might live in retirement, you're in the right place. We'll cover the worst states to retire in and what makes them poor choices for many seniors. We'll also cover some tips on retirement planning and choosing a destination for your golden years.

5 worst states to retire in 2023

5 worst states to retire in 2023

In choosing the worst states to retire, we considered the following factors:

• Overall living costs: A Nationwide survey found that 43% of people who are considering relocating for retirement say that lowering their living costs is among the three top reasons for moving. We considered total cost of living, including housing, transportation, utility, and grocery costs.
• Taxes: We considered overall tax-friendliness, including whether each state has an income tax, along with whether property tax and sales tax rates are high.
• Healthcare: We looked at the costs and accessibility of healthcare, along with the mortality for common conditions associated with older age.
• Weather: You probably don't want to sit inside all day during your retirement, so we factored in the prevalence of extreme weather.
• Other quality-of-life factors: Other things we weighed in choosing the worst retirement destinations included crime rates, infrastructure, pollution, and amenities.

Based on these criteria, here are the five worst states to retire to in 2023.

1. Alaska

Alaska doesn't have a state income tax, but that's about the only thing it has going for it as a retirement destination. It ranks 47th out of the 50 states, plus Puerto Rico and the District of Columbia, for overall affordability, according to the Missouri Economic Research and Information Center.

The Last Frontier also has the coldest average temperatures of any state, along with the highest violent crime rate and the second-worst broadband access. For retirees considering a move from the lower 48 states, life in Alaska could be particularly rough because you'd probably be relocating far from family and friends.

2. New York

New York comes in 48th out of the 50 states, the District of Columbia, and Puerto Rico for overall costs of living, with housing costs particularly high. Though New York doesn't tax Social Security benefits, it has a state income tax and also partially taxes retirement account withdrawals and private pensions.

Though New York gets mixed marks for elderly healthcare access, it ranks last among the states for skilled nursing facilities per capita.

3. Massachusetts

If you're looking for tax savings in retirement, you'll probably want to cross Massachusetts off your list. Massachusetts taxes most private pensions, as well as 401(k) and traditional IRA withdrawals. It also taxes investment income, with a 5% state long-term capital gains tax and a 12% tax on short-term capital gains. According to U.S. Census data, it also has the third-highest home prices out of the 50 states.

Though Massachusetts generally gets strong marks for retiree healthcare, it's also home to frigid winter temperatures that many retirees seek to flee.

4. Hawaii

There are a lot of things to love about retiring to Hawaii, including the weather, the beaches, and the air quality. Hawaii also boasts a strong public hospital system and more geriatricians per capita than any other state.

Hawaii has higher costs of living than any other state, including the most expensive home prices. Though Social Security benefits aren't taxed, you'll pay taxes on retirement account withdrawals and private pensions.

The average retiree would need almost $100,000 to retire in Hawaii. Using the 4% rule for retirement, you'd want a nest egg of at least $2.5 million to retire comfortably in the Aloha State. Given that you're at least a five-hour flight from the mainland U.S., you also need to factor in travel time and expenses if you'll be visiting friends and family frequently.

5. Mississippi

Mississippi is among the cheapest places in the U.S. to retire, with low housing costs and no taxes on withdrawals from retirement accounts, pension income, or Social Security.

But its quality of healthcare for seniors makes it one of the worst states for retirement. MedicareGuide.com ranks Mississippi 48th out of the 50 states and the District of Columbia for elderly healthcare. Mississippi was the worst state for cancer, stroke, and Alzheimer's mortality. It also ranked last for physicians per capita.

Tips

Expert tips for retirement planning

There are plenty of factors to consider when you're planning for retirement and determining where you want to live once you're no longer working. Follow these tips for choosing the right place.

1. Try renting first: Before you sell your home and pack up your life, try renting for at least several months in your planned destination. That way, you can figure out the good and the bad about living there. You can also start building your community so you'll have a social circle if you actually move.
2. Budget for overall costs: Don't just choose a retirement location because it has low taxes or housing costs. Look at the overall cost of living there, including property insurance, available services, and general living costs. You may find, for example, that a place with higher tax rates is worth the cost because it has strong public transportation that allows you to give up your vehicle.
3. Make a list of your priorities and deal-breakers: No place is perfect. But make sure you think through what really matters to you. Perhaps you can deal with not having a beach house if you'll have easy access to your favorite hobbies. Or maybe you're willing to live with less-than-perfect weather because you'll be close to family members and friends. It's your retirement, so you get to decide what matters to you.

Should you consider these states?

Should you consider these states for retirement?

Of course we're not saying that everyone should rule out living in the five states we chose as the worst states to retire in. If you've built a large retirement nest egg, you might have the freedom to choose a retirement destination that would be unaffordable for most. Other factors you'll need to consider are whether you prefer rural, urban, or suburban living, along with the amenities you're seeking and how close you want to be to family and friends. You may also want to consider looking beyond the U.S. and explore options for retiring abroad.

The best states to retire usually rank well for affordability, quality of life, low taxes, and good healthcare. But ultimately, you need to choose the factors that matter to you.