This article takes a look at the 15 best states for retirement in the US in 2024. If you wish to skip our detailed analysis on finding the ideal retirement state, you may go to 5 Best States for Retirement in the US in 2024.
Finding the Ideal Retirement State: Exploring Factors and 2024 Trends
According to the International Monetary Fund, it is projected that global growth will stay at 3.1% in 2024 and rise to 3.2% in 2025. Compare it to the October 2023 World Economic Outlook (WEO), and the forecast for 2024 registers a 0.2 percentage point uptick. This upward trend can be attributed to the robust resilience demonstrated by the United States as well as other notable emerging market and developing economies. Moreover, the implementation of fiscal support measures in China have also contributed to this progress. Nevertheless, inflation has had wreck severe havoc to the global economy in the past few years. 2023, in turn, has been regarded as the year of “meaningful progress” in terms of efforts to mitigate its impact.
Despite efforts to mitigate inflation, consumers are continuing to face the brunt of rising prices, especially in terms of food. In the United States, customers have been resorting to cheaper options such as Walmart Inc. (NYSE:WMT) in order to grasp economical groceries and other essentials. Recent news highlights that with food inflation finally coming down, and the US Department of Agriculture also forecasting the slow-down of inflation on at-home food products, companies such as Walmart Inc. (NYSE:WMT) are now rolling some of its price increases back.
This is what Walmart Inc. (NYSE:WMT) Chief Executive Doug McMillon has to say about prices going down:
“I’m excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that’s resilient but looking for value. As always, we’re working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3,” he said.
Moreover, McMillon said this about food in particular:
“In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries”.
The above remarks by Walmart imply that retirees on fixed incomes may finally be breathing a sigh of relief. This is in large because food is one of the biggest expenses of retirees, and eats away a sizable chunk of their average annual budget. According to data from the Bureau of Labor Statistics, nearly 25% of retirees’ monthly expenditures are allocated towards food. Notably, 44% of seniors revealed that food costs were their fastest-growing expenditure in 2021.
Housing expenses represent another significant financial burden for retirees, accounting for an estimated 35% of their incomes. In order to mitigate these costs, retirees often find themselves relocating to cheaper destinations that can help them stretch their retirement incomes further. U-Haul Holding Company (NYSE:UHAL) report highlights some of the top growth states where people are moving to, and states like Texas and Florida seem to be the winners. However, choosing any of these states only makes sense considering it has an overall low tax liability, a low cost of living, and even aspects such as proximity to family and friends.
For those on fixed incomes, many retirees find it rational to choose the best state to retire on a fixed income. After all, such a state would offer a low cost of living, and would be one of the best states to retire in money wise. However, as discussed, potential retirees must account for all factors that will impact their move before coming to a conclusion. With more and more individuals embarking on a journey towards their golden years as exemplified by the Peak 65 period, potential retirees often find themselves considering a wide array of factors to ensure their golden years are spent in an environment that perfectly aligns with their lifestyle, preferences, and financial considerations.
From climate and healthcare facilities to tax policies and cost of living, the decision to settle in a particular state can be multifaceted and deeply personal. But what makes a state “best” in terms of retirement? While there may be clear answers when to comes to best states to retire for taxes, best states to retire for healthcare, best states to retire for taxes and cost of living, the idea of crowing one best state for retirement in the US remains challenging. In order to take this challenge head on, we have crafted our own list of best states for retirement in the US in 2024.
Copyright: wavebreakmediamicro / 123RF Stock Photo
Methodology
To compile the list of best states for retirement in the US in 2024, we adopted a consensus approach by using our previous lists on best states for cost of living and taxes, best states to retire on Social Security, most popular states to retire to, states that don’t tax retirement income, and best states to live in after retirement. Next, we ranked our shortlisted states on three factors; namely health, cost of living and tax-friendliness. For health, each score signifies a ranking out of all states, with 1 being the best. Scores were assigned to each factor and summed up to generate a unique Insider Monkey Score. States were then ranked in an ascending order from the lowest to the highest scores.
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
Here are the best states for retirement in the US in 2024:
15. South Carolina
Insider Monkey Score: 12
IM Healthcare Rank: 37
Cost Of Living Index: 95.3
Tax Friendliness: Tax Friendly
South Carolina comes 15th on our list of best states for retirement in the US in 2024. The top factors that make it attractive for retirees is its cost of living and tax-friendliness. The state does not tax Social Security benefits, and also provides deductions for other types of retirement income. Living expenses in the state are 4.7% lower than the national average. Moreover, the state also boasts good weather, culture, and abundant recreational activities.
14. Texas
Insider Monkey Score: 13
IM Healthcare Rank: 35
Cost Of Living Index: 92.7
Tax Friendliness: Tax Friendly
One of the best states for retirement in the US in 2024 for tax is definitely Texas. There is no state income tax in the state, which means all income in the state goes tax free to retirees. To top it, this retirement magnet also boasts a cost of living that is 7.3% lower than the national average. No wonder retirees are attracted to this state.
13. Virginia
Insider Monkey Score: 15
IM Healthcare Rank: 19
Cost Of Living Index: 101.9
Tax Friendliness: Tax Friendly
Next on our list of best states to retire is Virginia. Virginia is one of the all-rounders in our list, boasting a good healthcare rank, tax-friendly nature, and a cost of living that is close to the national average. Not only is Virginia home to world-class healthcare, but also boasts magnificent landscapes for seniors who wish to lead active, outdoorsy lives.
12. Tennessee
Insider Monkey Score: 17
IM Healthcare Rank: 39
Cost Of Living Index: 90.3
Tax Friendliness: Tax Friendly
What’s the best state to retire in money wise? Many say its Tennessee. Truly, the cost of living in this state is 9.7% lower than the national average, and the state also happens to be tax-friendly towards retirees. Seniors won’t find healthcare to be as great as some of the other states, but that’s just the opportunity cost of living cheaper.
11. New Hampshire
Insider Monkey Score: 18
IM Healthcare Rank: 9
Cost Of Living Index: 114.1
Tax Friendliness: Tax Friendly
New Hampshire is one of the few states that don’t tax your retirement income. No Social Security benefits or retirement income is taxed in the state. However, dividends and interests are still taxed and due to be repealed after December 2024. The state also doesn’t have a sales tax, and is considered to be tax-friendly for retirees. Overall, the cost of living is 14.1% higher than the state average, but seniors can find cheaper cities and towns in the state. In terms of health, New Hampshire ranks in the top ten states. The state boasts excellent healthcare services, with several reputable hospitals and health services across the state.
10. Delaware
Insider Monkey Score: 18
IM Healthcare Rank: 17
Cost Of Living Index: 101.1
Tax Friendliness: Tax Friendly
Another all-rounder on our list of best states is Delaware. Not only is Delaware good because it’s cheaper, but it’s one of the best states to retire tax wise as well. The state also boasts good healthcare facilities, proximity to major cities, and a scenic coastline with several beach towns where retirees can relish a coastal lifestyle.
9. Illinois
Insider Monkey Score: 19
IM Healthcare Rank: 26
Cost Of Living Index: 92.1
Tax Friendliness: Tax Friendly
Illinois is next on our list of best states to retire in 2024 for retirees. A tax-friendly state to retire to, Illinois doesn’t tax nearly all forms of retirement income. The cost of living in this state is 7.9% lower than the national average.
8. Kansas
Insider Monkey Score: 21
IM Healthcare Rank: 34
Cost Of Living Index: 87.1
Tax Friendliness: Moderately Tax Friendly
Home to a rich cultural scene, diverse landscapes, and an extremely affordable cost of living, Kansas is another state that seniors can consider retiring to. While it is one of the few states that still tax Social Security benefits, the tax depends on their Adjusted Gross Income (AGI).
7. Nevada
Insider Monkey Score: 22
IM Healthcare Rank: 38
Cost Of Living Index: 101
Tax Friendliness: Very Tax Friendly
Nevada is another very tax-friendly state a senior can consider retiring to in their golden years. There is no state income tax in Nevada, which means seniors get to keep all of their retirement income tax-free at the state level. The cost of living is 1% higher than the national average, but retirees can find many cheaper cities and towns within the state.
6. Pennsylvania
Insider Monkey Score: 21
IM Healthcare Rank: 16
Cost Of Living Index: 95.6
Tax Friendliness: Tax Friendly
Pennsylvania is considered one of the best states to retire in for taxes and cost of living. The cost of living in this state is 4.4% lower than the national average. The state has a rich history and cultural heritage, with attractions such as the Liberty Bell, Independence Hall, and Gettysburg Battlefield to boast. Moreover, there are several reputable healthcare facilities within the state.
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Disclosure: none. 15 Best States for Retirement in the US in 2024 is originally published on Insider Monkey.