People who are approaching or have recently begun retirement may have a wealth of life experience, but many are looking forward to their newfound freedom. The State pension is adequate to help and provide a basic level of income for retired people, allowing them to live their best life after years of hard work. Moreover, pensions also offer crucial supplemental income for the unforeseen needs of others.
Every state has its pension system, and some have made significant modifications to their benefits schemes and financing mechanisms, making them a good place to live after retirement.
Here are the top 20 best states for pensions:
South Dakota
In the United States, South Dakota is one of the finest places to retire. South Dakota’s average cost of living, including healthcare, is 4% lower than the national average. The average cost of a comfortable retirement is $60,998 per year. South Dakota is also the third-most tax-friendly state in the country, with no state income tax, meaning that Social Security and other retirement income are not taxed. With more free time, you may enjoy South Dakota, which boasts one of the greatest per-capita concentrations of arts, entertainment, and recreation enterprises.
Hawaii
Hawaii is the country’s second-best retirement destination. Despite being one of the highest costs of living in the country, the average family income for persons 65 and older under pension in Hawaii is 33.8% more than the national average, at $71,997, and healthcare costs are 11.4% lower. Aside from its pension system and healthcare benefits, many seniors consider Hawaii to be their ideal retirement destination because of its relaxing and stunning surroundings.
Louisiana
Louisiana’s unpaid pension liabilities per capita are close to $20,000. Nonetheless, the total is less than $90 billion, with a year-over-year increase of less than 9%. For retirees, Louisiana is a tax-friendly state. Social Security and public pension income are not taxed by the state. It also boasts the country’s third-lowest property taxes.
Georgia
Georgia is ideal for a pleasant retirement destination because of its warm weather and inexpensive living costs. Georgia’s cost of living is around 7% lower than the national average, making it the sixth-lowest in the United States for retired couples. Georgia also has an advantageous tax system. Georgia exempts up to $35,000 of most types of retirement income for people aged 62 to 64 and up to $65,000 per taxpayer aged 65 and above ($130,000 per couple) from state taxes.
Washington
Washington has been one of the national leaders in the development and maintenance of long-term public pension schemes. The state initiated a major reform of its pension systems more than 30 years ago to give fair benefits while retaining the plans’ sound fiscal situation. The average income for ages 65 and above families in the Evergreen State is $55,577, with an average health care expense of $420,480 for a retired couple. Additionally, Washington is also considered one of the tax-friendly states in the United States.
North Dakota
North Dakota’s cost of living is just 1% higher than the national average, but typical healthcare costs for a retired couple are $414,455, which is lower than the national average. The state’s yearly retirement spending is roughly $61,222, and it is deemed tax-friendly, with state income taxes ranging from 1.01 % to 2.9 % and property taxes of 1.01%. Furthermore, the state is ranked second for fiscal soundness, indicating that the economy is robust enough to support a tax-friendly environment.
Tennessee
Tennessee is one of the best states for retirees, especially for those on a tight budget. Tennessee’s cost of living is 12% lower than the national average, and the state does not charge state income taxes, allowing retirees’ money to stretch further. Tennessee has the seventh-lowest yearly spending for a pleasant retirement, at $55,425. The average household income for people aged 65 and up is $47,891 and the average cost of health care for a retired couple is $411,617.
Alabama
The Heart of Dixie is sure to appeal to retirees. Alabama is known for its mild winters, beaches, and golf, as well as a cost of living that is 13% lower than the national average. The maximum state income tax rate in Alabama is merely 5%, while Social Security benefits and typical pension plan income are tax-free. Additionally, with a rate of 0.42 %, Alabama has the second-lowest property taxes in the country, and all homeowners 65 and older with an average income of $44,934 are exempted from state property taxes.
Virginia
Virginia’s magnificent landscape and elegance come at a cost of living that is 7% higher than the national average. However, the average household income for those aged 65 and up is $59,869, which is sufficient to cover the high cost of living. In addition, healthcare costs for a retired couple are lower than the national average at $408,950. What makes Virginia a state for a retiree is that Social Security benefits are not taxed, and individuals 65 and above can deduct up to $12,000 per person.
Florida
With 19.1%, the Sunshine State of Florida has the highest proportion of seniors of any state in the United States because of its features of mild winters, miles of beaches, and an affordable cost of living. There is no state income tax, estate tax, or inheritance tax in Florida, and Social Security or other retirement income is not taxed. Plus, Florida receives high marks for fiscal stability in part due to its large cash reserves relative to short-term commitments. The average household income for people aged 65 and over is $51,187, with an average health-care expense of $425,025 for a retired couple.
New Hampshire
The current tax position in New Hampshire is favorable to retirees. The cost of living in New Hampshire is percent higher than the national average, but this is largely offset by the tax position. New Hampshire has no sales tax and does not tax Social Security payments or other retirement income. In addition, New Hampshire is ranked 5th in the US for senior healthcare, with an average health care cost of $424,052 for a retired couple.
Utah
With five national parks, five national forests, and 43 state parks, the Beehive State of Utah is ideal for retirees who enjoy being active outdoors. Utah is ranked 2nd out of all 50 states in terms of total senior health, with healthcare costs for a retired couple at $412,641. Utah is not considered tax-friendly; taxing Social Security benefits and having a cost of living that is 4% higher than the national average. However, Utah has the third-lowest poverty rate in the United States for those 65 and older with an average income of $53,211.
Iowa
Although Iowa may not be the first place that comes to mind when thinking about retirement destinations, it has regularly ranked near the top of yearly surveys due to the benefits it provides to retirees. It ranks 5th in the country in terms of nursing care capacity, as assessed by the number of persons employed by those facilities in the state per capita. The Hawkeye State’s low living costs are a huge plus for retirees. Based on what a 65-year-old retired couple with an average salary of $41,194 may anticipate paying for the rest of their lives, health care expenditures are notably reasonable, at 5.6% below the United State average.
West Virginia
West Virginia, like Iowa, is not well-known as a retirement destination, but it still has a lot to offer. For someone on a tight retirement budget, affordability is critical, and West Virginia offers the fifth-lowest average property tax load in the country. The overall cost of living is 9.1% lower than the national average, and healthcare is the 3rd cheapest in the country. West Virginia is especially popular among retirees, as the state boasts the third-largest population of adults aged 65 and up.
Arkansas
Affordability is one of the main reasons why Arkansans are ranked as one of the best states for pensions. Arkansas has the 2nd lowest overall cost of living and the 10th lowest average property tax burden in the country. Arkansas ranked 10th in nursing care capacity and 1st in healthcare affordability in the healthcare category.
South Carolina
South Carolina is one of the best states for pensions because of its low cost of living, advantageous tax regulations for seniors, moderate climate, and chances for an active lifestyle. The Palmetto State’s moderate weather and southern charm come at a cost of living that is 7% less than the national average. The average cost of health care for a retired couple is $408,343. The average family income for those aged 65 and more is $43,340. Social Security benefits are not taxed in South Carolina, and other types of retirement income are exempted to a large extent. It also does not impose an estate or inheritance tax and property taxes are typically quite inexpensive.
Idaho
Idaho is gradually gaining popularity as a retirement destination, attracting retirees from throughout the country. Idaho’s cost of living is lower than the national average, with an average home sale price of $176,010 less than the national average. Because of the low cost of living, seniors can save more of their retirement funds for the things they want rather than the things they need. Medical costs for seniors are similarly inexpensive in Idaho, and medical care at Boise’s top two hospitals is less expensive than in other cities. Idaho has a low sales tax of only 6%, and prescription medications and Social Security income are not taxed. Additionally, Idaho also boasts one of the lowest crime rates in the country, with 204.7 incidents per 100,000 people, far lower than the national average of 367.9 incidents per 100,000 people.
Pennsylvania
Pennsylvania has a lot to offer retirees. It is where Lancaster is located, which is considered the second-best city to retire in the United States. In Pennsylvania, 15.4 percent of the population is 65 years old or older. For retirees, Pennsylvania offers a tax-friendly environment. Pennsylvania’s state sales tax is under 6%, making it one of the lowest in the country. Food and apparel are likewise tax-free in the state. All medications, both prescription and non-prescription, are tax-free. Because the cost of medication tends to rise as people get older, Pennsylvania is doing everything it can to keep those costs as low as possible.
Delaware
Delaware features a tax code that is friendly to retirees. Despite having a cost of living that is 11% higher than the national average, Delaware has no state sales tax, no taxes on social security income, and includes a $12,500 exemption for pension income. Delaware also offers healthcare costs that are more affordable for retirees, with a 65-year-old couple paying 2.2% less than the national average. The average cost of health care for a retired couple is $414,416. The average household income for people aged 65 and more is $52,387.
Wyoming
Aside from having a perfect climate and being a beautiful place to live due to its proximity to the Rocky Mountain ranges and rangelands, Wyoming is the 11th cheapest state to live in and ranks 5th in the nation for fiscal health, with more than enough cash on hand to meet its obligations. The average family income for those aged 65 and more is $45,305. Personal and corporate income taxes are not collected by the state. All pensions, Social Security, and payments from retirement funds are not taxed at the state level because it has no income tax. The sales tax in Wyoming is 4%. There is no inheritance tax and the property tax is dependent on the assessed value of the property.
Bottom Line
Many states provide benefits and advantages to become one of the greatest states for pensions. Not just for the perks, but also for what it has to offer in terms of climate, environment, exciting activities, views, landscape, and more, allowing you to enjoy your retirement life to the fullest.
In the end, it can beneficial to work with a certified and professional retirement planning agent to fully explore all of your pension options and receive advice on how to properly manage them to surely meet your needs.