These Are the Best States to Retire In

These are the best states to retire in if you want to stretch your retirement dollars the furthest

Retirement is a puzzle: We’re supposed to guess the amount of money we’ll need for the rest of our lives without knowing how much longer we’ll live. Once you’re retired, you’re essentially on a fixed income, which means you’re going to need to stretch those dollars. One money-saving tip that can help ensure you’re getting the most for your retirement savings: Pay attention to the best states to retire in (particularly the most affordable states) and cheap towns to retire in.

“We’ve all heard the advice that you need to plan for retirement a million times, but people need to realize that with life expectancies nearing 100, you’re going to spend a significant chunk of your life in the retirement stage,” says Genie Zeigler, a financial advisor and senior vice president with Merrill Lynch. “These choices, especially where you choose to live during retirement, will be some of the most important ones you make in your life.”

Frugal folks, particularly those nearing retirement, spend time looking not only at the nicest places in America but also the best places to live on a budget. Because when it comes to where you retire, not everyplace is equal. A good place to start is Bankrate’s survey of the best states to retire in 2022—and its ranking of the most affordable and least affordable states to retire in.

Why should you care about the best place to retire?

For most of us, money is the most important factor when considering how, where and at what age to retire. Nearly three-quarters of Americans say they are confident they will have enough money to retire comfortably, and almost half predict they’ll even be able to retire early, according to a 2022 survey by the Employee Benefit Research Institute. Great news, right?

Actually, that view might be a little rosy. How much you need to retire can vary widely, but a rough estimate is somewhere near $1 million, or 10 to 12 times your pre-retirement salary, assuming you can live on 80% of your pre-retirement paycheck.

Based on those numbers, over half of Americans aren’t saving enough for retirement, and 16% haven’t saved anything for retirement. Even more worrisome, one in three currently employed people aren’t saving for retirement, according to the 2022 Anytime Estimate Retirement Finances Survey.

It’s time to get serious about planning for your golden years, and that includes looking at a retirement map, says Zeigler.

In 2022, what is the cheapest state to retire in?

The Bankrate survey analyzed all 50 states for affordability, based on the cost of living index and the effective tax rate.

Michigan took the No. 1 spot as the most affordable state to retire in. Of course, affordability depends on which city or town you live in. But overall, Michigan is slightly below the U.S. average for general cost of living. The state really shines when it comes to affordable housing, with the average cost of a home about 10% to 20% lower than the U.S. average. It also boasts lower household bills for utilities.

It isn’t the lowest when it comes to taxes on retirees, however. With no sales tax, low property taxes and no death taxes, Delaware claims the title of the most tax-friendly state to retire in, according to Kiplinger.

Keep in mind, though, that there is more to choosing a place to retire than simply money, says Zeigler. For instance, while Michigan is cheap, it also has the 15th highest crime rate in the country, ranking 35th out of 50 for safety. (The state with the lowest crime, by the way, is New Hampshire.) In addition, Midwestern weather can be pretty brutal, and the state has relatively little diversity, ranking 34th out of 50 for cultural diversity.

These are just some factors you should consider when choosing the best state to retire in. (See below for other considerations.)

Rd Top 10 Most Affordable States To Retire In Gettyimages, Getty Images (2)

Top 10 most affordable retirement states

  1. Michigan
  2. Tennessee
  3. Missouri
  4. Mississippi
  5. Kentucky
  6. Oklahoma
  7. Georgia
  8. Arkansas
  9. Texas
  10. Alabama

What is the No. 1 retirement state overall?

The Bankrate survey also rated the best overall spots to retire, and Florida topped this list. Indeed, the top four best cities to retire in the United States are in Florida (as is one of the most charming small towns), according to the survey.

With 50 states, each amazing in its own way, how did the researchers choose the best states to retire in? In addition to looking at affordability, the survey factored in mental and physical well-being; culture and diversity; weather, based on average temps and likelihood of natural disasters; and rates of property and violent crime.

There’s a reason this state has become a magnet for retirees! Florida came in 18th on the list of affordable retirement states, but it ranked very highly in the other areas. It’s the most diverse state in the country, rich in art and culture, and has some of the most pleasant weather in the world (when it’s not hurricane season).

Top 10 best retirement states

  1. Florida
  2. Georgia
  3. Michigan
  4. Ohio
  5. Missouri
  6. Kentucky
  7. Texas
  8. Tennessee
  9. Pennsylvania
  10. South Dakota

What are the least affordable states to retire in?

Hawaii came in as the least affordable retirement state, with the highest cost of living in the country—double the U.S. average. It’s the most expensive state for groceries, housing, utilities and transportation.

But let’s not forget it’s also a tropical island with near-perfect weather, some of the best beaches in the world, gorgeous scenery, lots of culture and fun activities. Plus: Hawaii is the second most tax-friendly state for retirees.

It’s also important to remember that affordability varies based on many factors, including which city you choose to live in, what type of housing you choose and what tax bracket you’re in, says Zeigler. So while you could probably live more easily in Florida on $2,000 a month than in Hawaii, you may be stretched tight even in the Sunshine State if you settle down in a massive house in an expensive city.

Top 10 least affordable retirement states

  1. Hawaii
  2. California
  3. Connecticut
  4. Massachusetts
  5. New Jersey
  6. Vermont
  7. Rhode Island
  8. Maryland
  9. New York
  10. Maine

Curious about the worst states to retire in?

Knowing the worst retirement states might help you determine the places you don’t want to live when you give up the day job. Or these retirement facts may just make for fun dinner conversation.

The No. 1 worst state to retire in? Alaska. The high cost of living, remote location, extreme weather and second-highest crime rate (per capita) in the U.S. make it a less-than-desirable spot for many retirees. But if you have a love for the outdoors and an adventurous spirit, then Alaska might be perfect for you!

Top 10 worst retirement states

  1. Alaska
  2. Maine
  3. California
  4. New Mexico
  5. Montana
  6. Vermont
  7. Maryland
  8. Connecticut
  9. Hawaii
  10. Washington

What else should you keep in mind when choosing a place to retire?

Ultimately, where you choose to retire is about so much more than simple math. You have to find a place that fits your values, personality and lifestyle as well, or you’ll be miserable, says Zeigler.

“For me, I started by listing my personal life priorities—family, career, home, travel and philanthropy aspirations—and considering what those will look like in the future,” she says. “Financial planning is about so much more than money.”

Now is the time to start your own retirement wish list. When considering the best states to retire in, you’ll want to look at affordability, wellness, culture, weather and crime. But these are some other factors you may want to consider when planning where you retire, says Zeigler:

  • Jobs, if you want to work
  • Access to health care
  • Political leanings
  • Educational opportunities
  • Hobbies
  • Urban vs. rural
  • Housing availability
  • Access to airports or other methods of travel
  • Resources for retirees, like community centers or support groups

And don’t forget family! If you want to be near your loved ones once you retire, the best states to retire in are those close to relatives who will enrich your post-retirement life.


Charlotte Hilton Andersen
Charlotte Hilton Andersen is a health, lifestyle and fitness expert and teacher. She covers all things wellness for Reader’s Digest and The Healthy. With dual masters degrees in information technology and education, she has been a journalist for 17 years and is the author of The Great Fitness Experiment. She lives in Denver with her husband, five kids and three pets.