The 5 Best States for Retiring · 1.Retirement is the perfect time to reimagine where and how you want to live. With 50 states to choose from, selecting the right retirement destination can be overwhelming. However, if you prioritize the essentials (tax benefits, access to health care, cost of living, community, and lifestyle), some prominent states emerge as ideal options. To help you consider this important decision, we've rounded up the five best states to retire in 2025, based on these critical factors.
Florida has long been considered a retirement paradise and for good reason. Its tax-friendly policies, excellent healthcare options, and dynamic lifestyle make it the best choice for retirees across the United States. Whether you're looking to maximize your savings or enjoy endless sunshine, Florida offers something for everyone. Florida is one of the few states that has no state income taxes, allowing retirees to withhold more of their Social Security benefits, pension payments and other retirement income.
There are also no taxes on inheritances or inheritances, making it easier to transfer wealth to family members. In addition, older people can benefit from family housing exemptions, which lower property taxes and significantly lower annual housing costs. Florida excels in health care, offering top-notch medical centers that specialize in geriatrics and care for the elderly. It also has a high concentration of providers and specialists who serve retirees, which helps to ensure easy access to services.
While housing prices in popular cities like Miami may be higher, many parts of Florida offer affordable housing options below the national average. From cozy condos to spacious suburban homes, there's something to fit practically every budget. Florida offers retirees a vibrant lifestyle with endless recreational activities, from golf courses to sandy beaches. Older people can also choose from a variety of retirement communities where they can stay active and socially engaged.
To explore this option further, discuss the pros and cons of retiring in Florida. Known for its stunning landscapes and warm climate, Arizona is a fantastic destination for retirees. It offers retirees a balance between affordability, tax advantages and opportunities for an active lifestyle. Arizona has no taxes on Social Security benefits, which helps ensure that your fixed income increases.
In addition, they have reasonable property taxes and there are some deductions available for certain retirement income. Arizona has a strong health care system, backed by renowned centers, such as the Mayo Clinic in Phoenix. Retired people benefit from specialized geriatric care and wellness programs, and accessible health care services both in urban centers and in smaller communities. Ranked as the third most affordable state, Arizona is a great option for retirees looking for a reasonable cost of living, as it offers many options for those on a fixed income.
Arizona is perfect for lovers of outdoor adventures and cultural experiences. Whether it's stunning hiking trails and golf courses or vibrant art scenes, Arizona has a welcoming community environment with lots to do. To explore this option further, take a look at the pros and cons of retiring in Arizona. Tennessee combines low living costs with a rich cultural heritage, making it an attractive option for retirees.
From the music-filled streets of Nashville to the scenic beauty of the Great Smoky Mountains, this state It has everything. Tennessee's tax structure is one of the most favorable for retirees in the country. There are no state income taxes, so your Social Security benefits and retirement income will remain intact, and low property taxes can help you get more out of your savings. The centers of major Tennessee cities, such as Nashville and Chattanooga, are highly prized for their care for older adults.
Tennessee has one of the lowest living costs in the United States, 10% below the national average. Daily expenses, such as utilities and food, are affordable, and housing is affordable, with options ranging from suburban housing to retirement communities with prices below the national average. Retired people will find many things to love about Tennessee, from the rich cultural scene, especially in cities like Memphis and Nashville, to the many outdoor activities in the mountains and along the Mississippi River. To further explore this option, discuss the pros and cons of retiring in Tennessee.
Delaware may be small in size, but it offers great advantages for retirees. With its favorable tax policies, serene surroundings, and proximity to major metropolitan areas, Delaware is a hidden gem for those looking to enjoy their golden years. Delaware is home to many respected healthcare providers, who can offer easy access to comprehensive, high-quality care for both routine and specialized health needs. While Delaware's cost of living can vary, its smaller cities and communities often offer affordable housing options.
Retired people can enjoy suburban charm without sacrificing financial security. Delaware offers a relaxed, tranquil environment with charming coastal cities perfect for enjoying a quieter lifestyle. At the same time, residents have easy access to urban services in nearby Philadelphia and Baltimore. To further explore this option, discuss the pros and cons of retiring in Delaware.
South Carolina's picturesque shorelines, historic cities, and friendly communities make it a standout for retirees. Whether you're looking for tranquility or a bustling cultural scene, this state offers it. South Carolina offers significant tax advantages. Not only are there no taxes on Social Security income, ensuring that a larger portion of your benefits stay in your bank account, but the state also offers deductions on other retirement income and low property taxes.
There are well-equipped hospitals and care facilities for the elderly throughout the state, and South Carolina continues to expand its health care infrastructure to serve its growing population of seniors. South Carolina combines natural beauty with a rich history. Coastal cities like Myrtle Beach offer relaxation and recreation, while historic Charleston offers a cultural paradise with vibrant arts and dining scenes. To further explore this option, take a look at the pros and cons of retiring in South Carolina.
Choosing the best state to retire in is about balancing your financial priorities with your personal aspirations. The states listed here (Florida, Arizona, Tennessee, Delaware, and South Carolina) stand out in terms of tax benefits, access to health care, cost of living and community and lifestyle, and offer the benefits you need to make the most of your retirement years. When weighing potential options for living in retirement, the benefits we've described here make these five states excellent candidates for consideration. With more than 10 years of financial services experience, Kelly is a senior member of the Advanced Planning Strategy team.
He helps lead the team's efforts in complex wealth strategies, education and research, and has experience in retirement income planning, tax planning, estate planning, risk and debt management, educational planning and behavioral finance. With more than 30 years of experience in content and communications, Carissa is the senior writer of the digital content team at Edelman Financial Engines. From housing to healthcare: This is how much it really costs to retire in Florida. Among these states, most offer some form of deduction, credit, or income limit to minimize or offset the cost of the tax for retirees. Starting in 2024, Missouri, Kansas and Nebraska completely eliminated their taxes on Social Security benefits, and by 2026, West Virginia will completely eliminate its tax on the benefits.
Four states (Delaware, Montana, New Hampshire, and Oregon) have no state or local sales taxes. Alaska has no state sales taxes, but it does have some local sales taxes. Hawaii has a general special tax very similar to sales tax, although 4% would be one of the lowest sales taxes in the U.S. UU.
In the remaining states, the average combined state and local tax rates may exceed 9.5%, with Louisiana (9.565%) and Tennessee (9.556%) to the head. Six states have an inheritance tax. Of these, only one state (Maryland) also has an estate tax. Inheritance taxes generally offer exemptions or lower rates for direct family members, although they often tax people who are not relatives in their entirety.
About a quarter of senior households rely on Social Security benefits for 90 percent or more of their income family members. About half of older people rely on Social Security benefits for 50 percent or more of their family income. On the other hand, taxes in a state like Nebraska, which taxes all retirement income and has high property tax rates, an older person's general state and local tax bill could be thousands of dollars higher. According to WalletHub, colorful Colorado ranks exceptionally high in the proportion of older people who are in good health and have a physically active lifestyle.
Homeownership is a good way for older people to maintain their long-term housing costs, so they don't have to worry about changes in the housing market or for rent. Wisconsin also offers tax-friendly policies for seniors, including tax exemption for Social Security benefits and exemptions for portions of retirement income, helping to get even more out of savings. Sometimes, they also limit the amount that property taxes can increase from year to year for older people. For seniors who are planning to move to a new city or state to retire, there are several factors to consider.
In addition, legislators want to lower the age of eligibility for Medicare from 65 to 60, thus reducing overall costs by bringing in younger, healthier older people. However, sales taxes are important for older people because they often have a fixed income and spend a significant portion of that income on potentially taxable items.
