This article takes a look at the 5 best states to retire in the US financially. If you wish to check out our detailed analysis on navigating retirement in turbulent times, you may go to the 15 Best States to Retire in the US Financially.
5. Missouri
IM Retiree Affordability Ratio: 1.10
Average Hourly Earnings: $31.11
Average Social Security Payout: $1,782.82
Estimated After Tax Total Income: $2,922
Cost of Living Index: 88.5
Adjusted Cost of Living: $2,655
Missouri has been a good state to retire for taxes and cost of living, but the cherry on top is that the state no longer taxes Social Security retirement income. The cost of living in this state is 11.5% lower than the national average, and a retiree who works part-time would have an estimated 10% of his income saved after covering living expenses.
4. Oklahoma
IM Retiree Affordability Ratio: 1.11
Average Hourly Earnings: $29.96
Average Social Security Payout: $1,775.70
Estimated After Tax Total Income: $2,878
Cost of Living Index: 86.2
Adjusted Cost of Living: $2,586
Next on our list of states to retire in the US financially is Oklahoma. The average hourly earnings in the state are $29.96, and a retiree who works 10 hours per week and receives Social Security can manage to get an average of $2,878. Even after covering living expenses, a retiree would be able to save an estimated 11% of their after-tax income.
3. Kansas
IM Retiree Affordability Ratio: 1.12
Average Hourly Earnings: $29.87
Average Social Security Payout: $1,887.08
Estimated After Tax Total Income: $2,914
Cost of Living Index: 87.1
Adjusted Cost of Living: $2,613
The cost of living in Kansas is 12.9% lower than the national average, which implies that the state is affordable for retirees to live in. However, Kansas is one of the states that still tax Social Security benefits in 2024. Yet, this state manages to make it to our list because Social Security is taxable for taxpayers with an AGI of $75,000 and above and most retirees don’t make this much.
2. Michigan
IM Retiree Affordability Ratio: 1.12
Average Hourly Earnings: $32.20
Average Social Security Payout: $1,917.53
Estimated After Tax Total Income: $3,040
Cost of Living Index: 90.6
Adjusted Cost of Living: $2,718
Number 2 on our list of best states to retire in the US financially is Michigan. The cost of living in the state of Michigan is 9.4% lower than the national average. For a retiree who works part-time, the average take-home income after receiving SS benefits is an estimated $3,040.
1. Minnesota
IM Retiree Affordability Ratio: 1.14
Average Hourly Earnings: $36.99
Average Social Security Payout: $1,902.69
Estimated After Tax Total Income: $3,219
Cost of Living Index: 94.1
Adjusted Cost of Living: $2,823
The best state to retire in the US financially is Minnesota. While Minnesota is another state that taxes Social Security in 2024, most retirees don’t have enough income to have their Social Security benefits taxed. From the tax year 2023, seniors having a taxable income up to $78,000, or $100,000 for a couple, are exempt from paying state taxes on their benefits.
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