In this piece, we will take a look at the 21 best places to retire in the U.S. in 2023. For more retirement options, head on over to 10 Best Places to Retire in U.S. in 2023.
The past couple of years have been the hardest that most people have seen in a decade. This is true for fresh graduates out of college, who entered the market just when the economy shut down due to the coronavirus pandemic, and even retirees, whose pension funds and other investments tanked not once but twice in less than five years — first immediately after the pandemic was announced, and second after the global economy was shaken in the aftermath of the Russian invasion of Ukraine.
In the U.S. in particular, retirement planning is extremely important. After all, for most people, their primary source of income is their job, and unless they have significant inheritance, they have to start planning for the time they retire often from the first day at work. On this front, the data from the Employee Benefit Research Institute has tried to estimate how much money people retire with and the amounts that they have in their savings accounts at each stage of their life. As you’d naturally expect, individuals aged below 35 have the least amount of retirement savings, with the data showing that this age group had an average of $30,354 in their retirement accounts. This figure grew more than fourfold for people aged between 35 and 44 years, and jumped to $413,814 for 55 to 64 year olds. White Americans continued to dominate here, as they had an average of $298,415 in their retirement accounts, nearly triple the amount African Americans had in their accounts — $109,719.
In terms of their net worth, data from the Federal Reserve provides some insight. According to the central bank, households younger than 35 years were worth $13,900 on the median. Similarly, the trend for the retirement accounts also holds for net worth, as individuals aged between 65 and 74 years old were worth $266,400 on the median, while those aged 74 or higher were worth $254,800. Finally, how do retirees spend their money? Over here, the Bureau of Labor Statistics takes a look at their healthcare expenses. It shows that people between 65 and 74 years spend $56,435 on average, with healthcare being the biggest expense as it stood at $6,966. Within healthcare, insurance was the biggest expense, with this age group spending $4,952 on average. Healthcare costs slightly grew for individuals aged 74 or older, who spent $7,123 in total and $5,008 on insurance.
But how do retirees spend their time? After all, retirement is thought to be an age of bliss, where you have all the money but no obligations, either to your job or to your family. The Bureau also has our back on this front. Its American Time Use Survey shows that individuals aged above 65 years spent most of their time sleeping. Out of the 24 hours in a day, nine hours were spent sleeping. Leisure activities took second place, as the older adults had spent 6 hours on average on them. Finally, watching television was the third most popular activity, with 4 hours spent in front of the TV.
Alongside having huge industries such as technology, America also has a booming retirement sector. According to McKinsey, the U.S. retirement market holds a whopping $26 trillion in assets. It makes the startling revelation that the retired are expected to contribute more to global consumption by 2030 than working age individuals aged between 15 and 59 years in China. Narrowing its focus on America, McKinsey shares that the Defined Contribution market is the biggest segment of the retirement industry. The research firm shows that the DC segment accounts for 30% of the total assets held, which turns out at roughly $8 trillion in assets. These assets lead to $30 billion in revenue for the firms that manage these accounts, and the total accounts being managed are a whopping 110 million. The Defined Contribution industry has also been steadily growing over the past decade.
McKinsey shows that the total number of participants in the sector was 103 million in 2011, which grew to 114 million in 2018, and through a compounded annual growth rate (CAGR) that can touch 2%, the number of participants is slated to touch 122 million people in 2025. While a 2% growth rate might seem small, it grows when we look at the total assets in this segment. These assets were worth $4.9 trillion in 2011, grew to $7.8 trillion in 2018, and through a maximum CAGR of 8% can touch $12.7 trillion in 2025.
Finally, a major part of retirement is the assisted living community industry. Also known as old age homes, these offer seniors companionship and care during the later stages of retirees lives. According to a research report from Grand View Market Research, the assisted living industry is expected to grow at a CAGR of 5.53% between 2023 and 2030 to sit at an estimated $140.8 billion by the end of the forecast period. The research firm reveals that retirement communities were devastated by the coronavirus pandemic, with a whopping 42% of U.S. COVID-19 deaths being in assisted living communities. Within the market itself, communities for individuals that are aged above 85 held the largest market share in 2022 and by 2040 the number of these seniors is expected to more than double from 6.4 million in 2016 to 14.6 million. Finally, Western countries held the largest market share globally, but the South is catching up as its living standards improve.
Image by Carabo Spain from Pixabay
With these details in mind, let’s take a look at the best places to retire in the U.S. in 2023.
Our Methodology
We used a consensus opinion-based approach for this article and consulted six reliable sources (1, 2, 3, 4, 5, 6) to pick the best places (states) to retire in the US in 2023. Every time a state appeared on a list, it was assigned a single point. More frequently-recommended states scored more and are ranked higher in our list.
Best Places to Retire in U.S. in 2023
21. Minnesota
Insider Monkey’s Score: 1
Minnesota is a Northern American state that is one of the largest in the country in terms of area. It has a $450 billion GDP and a per capita GDP of $78,840. The highest ranked Minnesotan city we could find for retirement is Minneapolis.
20. West Virginia
Insider Monkey’s Score: 2
West Virginia is a South Eastern American state which is one of the smallest and least populous states in the country. Naturally, it has a small $42 billion economy. However, it has a large retiree population and affordable houses.
19. Kentucky
Insider Monkey’s Score: 2
Kentucky borders West Virginia and has a $262 billion GDP. One notable place to retire in the state is Lexington-Fayette and the state has a low sales tax and cost of living.
18. Missouri
Insider Monkey’s Score: 2
Missouri is a pure Midwestern state, and it borders Kentucky. It has a $392 billion GDP, and it allows retirees to choose between rural or urban years for their living arrangements.
17. Oregon
Insider Monkey’s Score: 2
Oregon is on the far West of the U.S., and it shares a coast with the Pacific Ocean. One highly rated place to retire is Eugene, which ranks quite high for housing affordability.
16. New Hampshire
Insider Monkey’s Score: 2
New Hampshire is located in the far East of America, right at the center of New England. One top place to retire here is Manchester, with has good healthcare facilities.
15. Wisconsin
Insider Monkey’s Score: 2
Wisconsin is a northern American state and has a relatively large GDP of $404 billion. Madison, Wisconsin has affordable houses compared to some other cities.
14. Arizona
Insider Monkey’s Score: 2
Arizona is a Southwestern U.S. state which is one of the largest and most populous ones as well. Scottsdale, Arizona is one of the best places in the U.S. in terms of quality of life for retirees, and it is quite affordable too.
13. Delaware
Insider Monkey’s Score: 3
Delaware is a far eastern U.S. state which is the second smallest state in the country. It has no sales tax, no inheritance tax, and no social security tax either. One great place to retire in Delaware is Bethany Beach which is known for affordable houses.
12. Colorado
Insider Monkey’s Score: 3
Colorado is a Western American state. It is known to be one of the oldest inhabited regions in America, with Native Americans having had a presence in the area for more than ten thousand years. Colorado is also known for the Rocky Mountains, and it has a $489 billion GDP. It exempts federally taxed social security income from taxes.
11. Virginia
Insider Monkey’s Score: 3
Virginia is an Eastern American state that was first colonized in the 1600s. It has no income tax on social security income and has good healthcare along with low costs. One popular place to retire in Virginia is Virginia Beach. Virginia ranks among the top 15 highest GDPs for states within America, with the latest figure sitting at $654 billion.
Click to continue reading and see 10 Best Places to Retire in U.S. in 2023.
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Disclosure: None. 21 Best Places to Retire in U.S. in 2023 is originally published on Insider Monkey.