Delaware takes the No. 1 spot for the best state to retire in 2024
Just like buying a house or getting married, retiring is a significant milestone in life.
Picking where to spend your golden years is a key part of that milestone, and as much as it’s a financial choice, it’s also a very personal decision. You may want to settle down close to family or be near the ocean, or maybe you care about finding somewhere affordable or with a strong sense of community.
To help you understand your options, Bankrate created a comprehensive ranking of the best and worst states for retirement by analyzing dozens of data points for each U.S. state, such as living costs, health care costs, overall well-being and more. We kept our methodology the same as last year’s list and ranked states based on five broad categories: affordability (40 percent), overall well-being (25 percent), the cost and quality of health care (20 percent), weather (10 percent) and crime (5 percent).
Those categories serve as a reminder that many things go into deciding where to move in retirement, but we weighed affordability the heaviest in the ranking to reflect the challenges that so many Americans face with their retirement savings and the rising cost of living across the U.S.
Bankrate’s Retirement Savings Surveys over the last few years have consistently found that most Americans feel behind on their retirement savings. At the same time, inflation has pushed the cost of living up by double digits across the country since early 2020, including housing expenses, health care costs and more. That reality is forcing many to find ways to stretch their retirement dollars, shift their retirement plans or do a combination of both.
Key takeaways
Delaware (1), West Virginia (2), Georgia (3), South Carolina (4) and Missouri (5) are the top five states for retirement in 2024.
Alaska (50), New York (49), Washington (48), California (47), and North Dakota (46) landed at the bottom of the rankings for the best and worst states to retire.
In our overall ranking, the best and worst states for retirees are split geographically. The Midwest and the South claim the top five states, while the Northeast and West claim the bottom five states, primarily because of differences in cost of living.
Best and worst states to retire in 2024
Bankrate’s annual Best and Worst States to Retire Study found that Delaware is the best state for retirees in 2024, followed by West Virginia (2), Georgia (3), South Carolina (4) and Missouri (5).
Delaware moved from second to first place this year, and Iowa — our No. 1 state last year — dropped to ninth place. Iowa lost ground mainly due to lower scores in the affordability category, which makes up 40 percent of the ranking. The cost of living, property taxes and homeowners insurance have all risen in Iowa since last year.
In our overall ranking, the best and worst states for retirees are split geographically. The Midwest and the South claim the top five states, while the Northeast and West claim the bottom five states for a second year in a row, primarily because of the differences in cost of living.
Top 5 states for retirees in 2024
Delaware landed in the top spot for the best state to retire in this year. The First State isn’t typically thought of as a retirement haven, but it has many strong selling points for retirees.
Delaware is a tax-friendly state for retirees. It doesn’t have state or local sales tax, and it doesn’t tax Social Security benefits. It also has lower property taxes relative to the rest of the country, averaging roughly $1,939 annually, according to ATTOM data. The state ranks well for racial and ethnic diversity, arts and entertainment establishments per 100,000 residents and overall well-being. Compared to its population, it also has a high share of residents who are 62 and older. Earthquakes, tornados, and hurricanes are also rare, and the climate is temperate. The state’s weaker spots are its cost of living, crime, and cost of health care.
While Delaware is a pricier state to live in, it scores well in all other affordability metrics we considered in the ranking: property taxes, combined state and local sales tax and homeowners insurance. The remaining top five best states to retire are:
2. West Virginia: This small state boasts the best affordability in the nation, based on a low cost of living, low property taxes and affordable homeowners insurance. The state fell in the middle of the pack for wellness. However, it scored the worst of all the states in the quality and cost of health care category due to high health care costs, poor health system performance and fewer health care establishments per 100,000 residents in the state.
3. Georgia: The Peach State has become significantly more affordable since last year, pushing it up from 15th place to third place on our ranking. That’s primarily because Georgia’s cost of living in Georgia has come down significantly, and average homeowners insurance premiums have dropped slightly. The quality and cost of health care in Georgia improved slightly, but overall well-being and crime scores remained poor this year.
4. South Carolina: South Carolina is another Sun Belt surprise that scored higher on affordability this year compared to 2023, pushing it up from 19th place to fourth place in our ranking. It scored well in the weather category and fell in the middle of pack for overall well-being and quality and cost of health care. However, it suffered in one key category: crime.
5. Missouri: Fifth-place Missouri shines for affordability, ranking well for cost of living and property taxes. Affordability carries a 40 percent weight in the ranking, which is why we see Missouri ranked high on our list. However, this state struggles with its quality of health care, overall well-being, crime and natural disasters.
Bottom 5 states for retirees in 2024
Several pricey Western and Northeastern states landed in the bottom five this year. Alaska held last place has been ranked the worst for the second consecutive year. The state was dragged down by back-of-the-pack scores in affordability, quality and cost of health care, weather and crime. The remaining four worst states for retirement were:
New York (49)
Washington (48)
California (47)
North Dakota (46)
6 important considerations before relocating for retirement
Considering a retirement move? Here are six factors you should consider before deciding where to settle down, according to retirement and financial experts:
1. The state of your finances
Before relocating for retirement, experts recommend taking inventory of your finances and calculating whether you can afford a move. According to David John, retirement expert and senior policy advisor at AARP, the first step is knowing your budget and spending habits.
“Most of us think that we actually know that [spending habits] just simply by looking and seeing what happens in our bank account,” John says. “But the reality is that in many cases, there are things that we buy and they’re not necessarily expenses that we really need.”
The second step is understanding how much retirement income you will have and how long those funds will last, including Social Security, retirement savings and other assets like your home.
You can start receiving your Social Security retirement benefits as early as age 62, but John recommends that retirees delay claiming their benefits to lock in a higher monthly payment for life. In addition to an annual inflation adjustment, Social Security benefits increase 8 percent every year you delay past full retirement age, up until age 70.
“The more of your retirement income that comes from Social Security, the more protected you’ll be from future inflation,” he says.
Once you have taken inventory of your finances, Bankrate’s retirement calculator may be a good starting point to see if you’re on track toward a secure retirement. If you’re behind on your retirement savings, calculate how much more you need to reach your goal and start putting together a savings plan.
???? Money tip: A quick, easy way to estimate the total amount you’ll need to retire comfortably is using the 25x rule. The calculation is simple — all you have to do is multiply the annual income you think you will need in retirement by 25. However, this approach isn’t a silver bullet, and it should only be a starting point for estimating how much you’ll need to save for a comfortable retirement.
Preparing your finances and mapping out a plan for your retirement is typically complicated, according to Betty Wang, CFP and founder of BW Financial Planning. Those who are approaching retirement age may benefit from seeking professional help from a financial advisor.
There’s just a lot of pieces moving, and it takes a lot of thought and putting numbers to it. This is when it’s a really good time to partner with a financial advisor.
— Betty Wang, CFP, Founder of BW Financial Planning
2. Sense of community
Community is critical when choosing a place to retire, and it’s a factor that often doesn’t get enough attention in the decision-making process. If you’re considering relocating for retirement, Kerry Hannon, retirement expert and Author of ‘In Control at 50+: How to Succeed in the New World of Work,’ recommends testing the place out for three to six months before committing. See if you can easily join groups and meet people you can connect with, whether it’s joining a pickleball league or a volunteer organization.
“Having that sense of community and human connection is huge to healthy aging,” Hannon says. “Isolation and loneliness are not something you want to move toward, so look for your community.”
3. Cost of living
Moving to a more affordable place can be an effective way to stretch your retirement savings in today’s economy. However, whether somewhere is considered “affordable” to you likely depends on where you’re moving from.
For example, from a financial standpoint, moving from New Jersey to Georgia may be a cost-effective move for an older couple who’s built significant equity in their home. They could take advantage of the equity built up in their New Jersey home and pay cash for a cheaper home in Georgia to avoid taking on another mortgage. However, that likely won’t be an effective strategy if you’re moving from a lower-cost state to a higher-cost state.
If you can sell your place, downsize to an area with a lower cost of living and pay cash, that might make it a great move for you.
— Kerry Hannon, Retirement Expert and Author of "In Control at 50+: How to Succeed in the New World of Work"
You should also consider what you’re willing to give up for a more affordable lifestyle in retirement. Many of the most affordable places in the country — primarily in the Midwest and Sun Belt — don’t offer as comprehensive health care services, don’t have as many arts, entertainment and recreation establishments or are prone to more natural disasters and rising temperatures.
Over the last few years, the cost of living has also risen significantly in places that have historically been popular retirement destinations due to inflation and rising homeowners insurance rates, especially in cities along the coast, in Tornado Alley or near wildfire areas.
If you’re planning to uproot for retirement, financial experts say you have to consider the potential future costs of living in that area to ensure it’ll be sustainable and affordable over the long term.
4. Quality, cost and proximity to health care
Other than housing, Hannon says health care will likely be your biggest cost in retirement. According to a Fidelity analysis of Census Bureau data, a 65-year-old who retired last year can expect to spend roughly $157,500 in health care and medical expenses throughout retirement.
Medical and health care costs vary widely throughout the country, which is why it’s important to consider the out-of-pocket health care costs after Medicare wherever you retire. Look for places with reasonable health care costs, as that can lead to sizable savings for you in retirement.
You should also have a good grasp on whether the area provides the quality of the health care you need. Bankrate’s study found that several Western states — including Colorado, Washington, Utah and Oregon — rank at the top for quality and cost of health care.
Access to high-quality health care matters, too. If the nearest hospital is far from to where you want to settle down in retirement, Hannon says that’s something to consider, especially if you plan to go in regularly for health visits.
“You might live somewhere that is beautiful, but maybe it’s very remote and the nearest hospital is an hour away,” Hannon says. “You’re going to have to be helicoptered or transported to get to a medical center, so that should be an important consideration.”
5. Taxes
Consider how you’ll get taxed in the city and state you’re interested in moving to for retirement. Many states that have no income tax have higher property taxes or higher sales tax, which is why Hannon and Wang both recommend getting a full picture of what taxes would look like for you in that area. The best way to do that is by talking to an expert who understands taxes in the city and state in which you want to retire.
No state has zero taxes: You may want to move to Florida because it has no income tax, but you may end up spending significantly more on homeowners insurance, according to Hannon. The average cost of homeowners insurance in Florida was $5,533 as of July 2024, the highest among all states in the country, according to Bankrate’s Quadrant data.
“Get a real beat on what the tax picture would look like for you,” Hannon says.
6. Climate
It’s tempting to opt for warm, sunnier states with milder winters, like Florida, Arizona and South Carolina, but with natural disasters and temperatures on the rise, you may be shelling out more on electric bills and homeowners insurance in those places.
Many insurers are changing their rates, raising deductibles and excluding certain natural disasters because of the increasing rate of extreme weather. In Florida, three major insurance companies have voluntarily stopped offering homeowner insurance policies over the last two years, which may be partly driving up the cost of homeowners insurance in the state.
Your air conditioning is going to be costly if you want to move toward a coastal community, and your property insurance is going to be higher as we see more of the impacts of climate change.
— Kerry Hannon, Retirement Expert and Author of "In Control at 50+: How to Succeed in the New World of Work"
How your state ranks for retirement
Methodology
Bankrate examined several public and private datasets related to the life of a retiree in all 50 states, excluding the District of Columbia. The study examined five categories (weightings in parentheses): affordability (40 percent), overall well-being (25 percent), quality and cost of healthcare (20 percent), weather (10 percent) and crime (5 percent).
Affordability was calculated using the following metrics at the state level: cost of living index from the Council for Community and Economic Research as of the first quarter of 2024, 2023 combined state and local sales tax rates from the Tax Foundation, 2023 average annual property taxes from ATTOM and the average cost of homeowners insurance from Bankrate’s Quadrant data as of June 2024.
For wellness rankings at the state level, Bankrate analyzed 2022 data from the U.S. Census Bureau, including the number of arts, entertainment and recreation establishments per 100,000 residents for each state and adults 62 and older per 100,000 residents for each state. Racial and ethnic diversity index data is as recent as 2020 from the Census Bureau. Bankrate also factored in Sharecare’s 2022 community well-being index. Sharecare’s community well-being index measures various wellness factors, including access to healthcare, food, physical health and economic security.
Bankrate considered three key metrics to measure healthcare quality and costs at the state level. One of those metrics was healthcare establishments per 100,000 residents for each state for 2022 based on Census Bureau data. We analyzed each state’s health system performance based on 2022 data from The Commonwealth Fund, as well as the cost of healthcare per 100,000 residents for each state from the Census Bureau.
For weather rankings at the state level, Bankrate analyzed two decades of average annual temperature data from the National Oceanic and Atmospheric Administration (2000-2023). Bankrate also analyzed NOAA data for average tornado strikes between 2013 and 2022 and hurricane landfalls between 2000 and 2023, along with earthquake reports from the U.S. Geological Survey between 2010 and 2015.
To measure crime at the state level, we aggregated rates of property crimes and violent crimes per 100,000 residents for each state using the FBI’s 2022 Crime Explorer. Crime data for all 50 states are derived from both National Incident-Based Reporting System (NIBRS) and Summary Reporting System (SRS) reports voluntarily submitted to the FBI. It includes data submitted as of May 1, 2023. Several states had less than 60 percent of their law enforcement agencies reporting information to NIBRS in 2022, which is a limitation and may impact the results of the study.