Worst States for Retirement in the U.S
Choosing a retirement destination can prove to be a tough decision for most Americans who want to stay in the U.S. after retirement. But it is an important decision that requires proper knowledge and guidance. Deciding a retirement destination will help you to determine the state’s cost of living, tax costs, and health care options. You should be able to choose your retirement state wisely & according to your savings. Here, we have listed the seven worst states in the U.S. for retirement destinations based on various factors such as poverty rate, living expenses, healthcare facilities, tax situations, etc.
1. Alaska
Alaska is considered to be the most tax-friendly state for retirees because here they don’t have to pay state income or sales tax. According to Kiplinger, the Alaska’s cost of living is 32% above the U.S average which means the state has high living costs. Alaska also has the lowest poverty rate among seniors.
2. Minnesota
The Land of 10,000 Lakes can prove to be a hard place for 65+ people. Along with this, the above-average living expenses imbalances the budgets of a retiree. Minnesota has high sales and income tax rates, and it also taxes social security benefits the same as the federal taxes. Apart from this, other retirement income, such as military, government, and private pensions, are also taxable with higher tax rates. United Health Foundation has ranked Minnesota as the healthiest country for seniors.
3. Kentucky
This state offers low living costs and tax rates for retirees. Social security benefits are exempted from state taxes. But in terms of seniors’ health, the United Health Foundation has ranked Kentucky as the second-worst state in the U.S. This is because it has a high rate of smoking and physical inactivity among people and a low quality of nursing homes.
4. Montana
Montana has above-average living costs, but the income of the residents of the state is 21.2% below average. The retirement income, including Social Security, has a high rates of taxes. But still, Montana has the highest above 65-and-older share among the population.
5. West Virginia
West Virginia has below-average living costs for retirees. The retirement income, including Social Security, is taxable; however, the first of $8,000 is exempted from taxes. That means that it is not tax-friendly for retirees. Apart from this, the West Virginia’s elderly population have poor health conditions. The United Health Foundation has ranked the state as 45th in the country.
6. Maryland
Maryland is best for people who love history and culture. It offers everything from great golfing to mountains and beaches, and you will never find yourself far from a major population center. However, it is considered the worst as a retirement destination because of paying for the state’s high cost of living and taxes on IRAs. Along with this, Maryland also has above-average health care costs.
7. New York
Manhattan is known to be the most expensive place to live in the U.S. New York has 22% above the average cost of living. Furthermore, according to the United Health Foundation, the healthcare facilities are also too costly throughout New York. New York does not impose a tax on social security, but only up to $20,000 of retirement income can be excluded from the state’s charges.
