This article takes a look at the 5 best states to retire on social security. If you wish to check out our detailed analysis on finding the best retirement state, you may go to the 15 Best States to Retire on Social Security.
5. Georgia
Insider Monkey Rank: 4
Cost of Living Index: 90.9
Health Index: 99.5
Tax Friendliness: Very Tax-friendly
Crime Rate: 400.1 per 100k
Another state known for its retirement tax-friendliness is Georgia. Social security benefits are not taxed in this state. AARP notes that the state offers generous tax breaks for seniors. For example, other types of retirement income are provided a maximum deduction of $65,000 each for seniors aged 65 or older. Property taxes are moderate, and there is no inheritance or estate tax levied either. Meanwhile, the average combined sales tax rate is high at 7.4%.
4. Iowa
Insider Monkey Rank: 3.95
Cost of Living Index: 89.9
Health Index: 101.4
Tax Friendliness: Moderately Tax-friendly
Crime Rate: 303.5 per 100k
One of the best states for retiring on social security is Iowa. Seniors enjoy living costs that are 10.1% lower than the US average. Meanwhile, all social security income is exempted from taxation at the state level. Come 2024, Iowans will also be exempted from paying state taxes on retirement income for tax year 2023. A downside is that property tax rates are quite high in the state, and there is an inheritance tax as yet.
3. West Virginia
Insider Monkey Rank: 3.6
Cost of Living Index: 85.2
Health Index: 95
Tax Friendliness: Tax-friendly
Crime Rate: 355.9 per 100k
West Virginia ranks in the top three states for retiring on social security owing to its low cost of living and tax-friendliness. Living costs in the state are 14.8% lower than the US average, allowing retirees to live comfortably on social security. Retirees must know that social security and other types of retirement income are partially taxed in the state, but deductions can be claimed to offset them. Coupled with affordable living costs, West Virginia can be one of the best states to retire on social security.
2. Wyoming
Insider Monkey Rank: 3.55
Cost of Living Index: 93.2
Health Index: 100.5
Tax Friendliness: Tax-friendly
Crime Rate: 234.2 per 100k
One of the most tax-friendly states to retire to is Wyoming. Not only is it tax-friendly, but also boasts a cost of living which is 6.8% lower than the US average. This state does not have an income tax, which is why all types of retirement income go tax-free. Moreover, property taxes and sales taxes are also some of the lowest in the state. The crime rate is lower than the US average as well, and the state of healthcare is above average.
1. Mississippi
Insider Monkey Rank: 2.55
Cost of Living Index: 86.7
Health Index: 98.5
Tax Friendliness: Very Tax-friendly
Crime Rate: 291.2 per 100k
According to our rankings, Mississippi is the best state to retire on social security. The cost of living in this state is 13.3% lower than the US average. The state is also very tax-friendly. All sorts of retirement income are exempted from taxation here. Property taxes are low, while sales taxes are quite moderate.
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