The process of sorting out and nailing down the best places to retire—or more specifically, the best place for you to retire—is very much in the eye of the beholder. It also raises many questions. For simplicity’s sake, let’s boil it down to three basics:
- Is it among the cheapest places to retire?
- Can I get a doctor or other medical professional if I need one?
- How's the weather? Are there fun and interesting things to do and people I’ll enjoy hanging out with?
Affordability, health care, and quality of life are the three major components of WalletHub’s recently released rankings of the best and worst states to retire for 2018. WalletHub, part of Washington, D.C.-based Evolution Finance, Inc., evaluated the 50 states on those three factors and graded each on a 100-point scale (100 being the most favorable).
Here are the top five states in each of the three categories plus the overall rankings.
2. South Dakota
“Adjusted cost of living” carried the most weight among the inputs WalletHub used to calculate its list of affordable places to retire, followed by “general tax-friendliness,” costs for in-home services, and several other metrics.
Long a popular retirement destination thanks to its abundant sunshine and golf courses, Florida also offers certain tax benefits: There is no state income tax, and it’s one of two states where retirement income is not taxed, according to the Retirement Living Information Center (Alaska is the other).
Cost is always a consideration for baby boomers and others looking for the top places to retire. In terms of affordability, there are good options all over the map, WalletHub notes.
“Even in the most affordable areas of the U.S., most retirees cannot rely on Social Security or pension checks alone to cover all of their living expenses,” WalletHub said in its report. “If retirement is still a big question mark for you because of finances, consider relocating to a state that lets you keep more money in your pocket without requiring a drastic lifestyle change.”
4. New Hampshire
About 15 different factors, most weighted equally, were analyzed for health care, including family/general physicians; dentists and nurses per capita; top-rated geriatrics hospitals; quality of public hospitals; and share of adults age 65 and older with “good or better” health (life expectancy was assigned “double weight”).
Sun Belt states are middling at best in terms of health care access, based on the WalletHub report: Arizona ranks number 17 and Florida is 20.
Staying healthy is obviously essential to a long, happy retirement, so health care access, not surprisingly, is at the top of the list for many seeking a good place to retire.
Timothy M. Hayes, president of Landmark Financial Advisory Services and one of the retirement professionals cited in the WalletHub report, ranked “availability of health care and support services” as his top consideration for people evaluating retirement destinations.
Quality of Life
It's a phrase that means different things to different people, so this category covers a lot of ground, including access to public transportation; “mildness” of weather; access to scenic byways; museums and theaters per capita; low crime rates; and more.
Put another way, what do you want to do with your time after you settle in? Are you looking for a warm place to retire, or is the art scene more your thing? New York and California lead the pack in terms of theater scenes, as you might expect. For anglers, it’s hard to top southern California. Florida has more than 1,000 golf courses, more than any other state; yet, Golf Advisor’s 2017 ranking of top states for golf, based on course rates, was led by Nevada, followed by Colorado, Wisconsin, Minnesota, and Nebraska.
Maybe you seek “culture” and learning opportunities. On that note, several college and university towns led a recent Forbes list of top retirement destinations, including: Athens (University of Georgia), Boise (Boise State), and Iowa City (University of Iowa).
Overall WalletHub Rankings for 2018
3. South Dakota
For retirement, or most any other long-term, financial decision, it’s always good to do as much research as possible, get the data, and carefully examine the cold, hard numbers. It’s just as critical, if not more so, to use your eyes and ears and trust your gut, professionals say. In the end, you know best what makes a location a great place to retire.
Kirk Kinder, president of Picket Fence Financial and another professional cited in the WalletHub report, suggests spending a couple of months as a renter in a potential retirement destination to “get a feel for the area.”
Ask yourself other questions, he adds: “Does the area treat retirees well? Is there an opportunity to find friends or pursuits that fit your interests?"
“Qualitative factors should outweigh the quantitative,” Kinder says.
Regardless of your age, saving for retirement should typically be a priority in your overall financial plan. How much do you need to save to reach your retirement savings goal?