Editor's note: Where will you go when you retire?
A lot of factors play into your decision of where to live when you stop working. You may want to stay near your family. You may want to pick up and move to Florida. As it turns out, retiring in Florida is one of the smartest decisions you can make…
Dr. David Eifrig – editor of Retirement Millionaire and a two-time retiree – and his team spent the last year researching and traveling the country to find the best places to retire in the U.S. They based their analysis on the climate, access to health care, and various financial factors.
In today's edition of our weekend Masters Series – originally published in the July issue of Retirement Millionaire – "Doc" reveals the top three states (Florida is one) where your money will go the farthest in retirement.
The Top Three Places to Retire in the U.S.
By Dr. David Eifrig, editor, Retirement Millionaire
Many folks struggle with the issue of where to retire.
It's hard to know what the right thing to do is when the time comes – stay where you lived when you worked or move somewhere else to "retire." (I believe people should continue to "work" for a long time even after retiring the first time or two.)
So if you are contemplating retirement for the first time, lots of factors play into your decision... access to health care, weather, cost of living, and even the social climate. Moreover, among the most important are financial issues.
If you're close to retirement or considering it... you should think about the financial implications of where you're living. Who wants to choose between what they enjoy in life and running out of money?
Plenty of magazines claim to know the best place to retire... The pages are full of picturesque photos – probably showing you one of the few days a year when a town in Minnesota is sunny and warm. Or a small town in Florida in the middle of a non-humid, breezy winter day.
That's why, when we decided to search for the best places to retire in the U.S., we studied places thinking that retirees are looking, first and foremost, for a place to live where money can go the furthest... While other factors are important, people should know their money will last.
Although we've looked and continue to check places outside the U.S., our biggest assumption for this research was that most people don't want to – or can't – live outside the U.S. For many, the cost to move is too steep, and it would take them too far away from their families.
Starting from 50 states and considering just overall cost-of-living expenses, we narrowed our list to 14 states. Then, we spent time in these places. With "boots on the ground" in our top states, we wanted to be sure we weren't missing anything.
Finally, we spent hours sifting through hundreds of e-mails sent by subscribers offering their personal suggestions and ideas on each state. We've compiled all of our research into a report called "Places to Retire." Today, I wanted to share some of our top findings...
After accounting for the tax impacts, housing costs, the culture, and the climate of each state, we narrowed the list to our top three: Florida, Tennessee, and Wyoming. You can see how the taxes look below…
|
State
|
Income Tax Min/Max
|
Social Security Exempt?
|
Sales Tax Min/Max
|
Inheritance Tax
|
Estate Tax
|
||
|
Florida
|
None
|
None
|
Yes
|
None
|
6%
|
None
|
Limited to Federal tax
|
|
Tennessee
|
None
|
None
|
Yes
|
None
|
7%
|
5.5%-9.5%
|
Limited to Federal tax
|
|
Wyoming
|
None
|
None
|
Yes
|
None
|
4%
|
None
|
Limited to Federal tax
|
Florida, as you may have heard, is the quintessential retirement state. Its reputation is well-earned. Florida does a good job of inviting retirees to move there. Tax rates are low, and housing isn't too expensive in most areas.
Florida also doesn't collect state income tax. If you live in a state that taxes you 4%-10% on your income, moving to a no-income-tax state is like getting a raise. And when withdrawing money from retirement accounts, it's an even better feeling knowing you're not paying on taxes that you might have otherwise paid years ago.
Of course, if you like the beach, sunshine, and warm weather, Florida is perfect.
When people think of Florida, they worry about tropical storms and hurricanes. While tropical storms are common across the state, some towns (like Amelia Island and Fernandina Beach) don't see hurricanes often, if at all.
The northern part of Florida also has four seasons. You can occasionally even see snow in the winter, and the summers are milder than in southern Florida.
But if you like warm temperatures and opportunities to swim all year round... you can't beat the south of Florida.
Tennessee is second on our list as a retiree-friendly state. It also charges no income or Social Security taxes. Average housing costs are in the mid-$200,000s (the cheapest of our top three).
You get the standard four seasons in Tennessee. One of my favorite advantages of living in Tennessee is the scenery. Here you can have almost any kind of scenery you want – mountains, rivers, lakefronts, and even some cosmopolitan city life.
Just driving across the state is enough to make you want to stay. East Tennessee encompasses part of the Blue Ridge Mountain range. Much of the land is mountainous and rocky – perfect if you're a hiker. One of the major cities in East Tennessee is Chattanooga, the fourth largest city in the state with a population of just 167,674. Chattanooga has been revitalizing its downtown area for years... working to attract tourists and entice residents to move into the city.
West Tennessee offers a variety of culture. It's home to the largest city in the state – Memphis (as of the 2010 census).
Middle Tennessee is where you'll find streams and valleys, and many of the state's colleges – including Vanderbilt. And it's home to the state's capital – Nashville (which has 601,222 people).
Going further northwest... Wyoming ranks third on our list. It's easy on your wallet. There are no income or Social Security taxes. And the state sales tax is a low 4%.
Wyoming is a state you might never have considered retiring to unless you've been fortunate enough to visit. It's a perfect retirement spot for anyone who wants to get away from the busy lifestyle you'll find most other places. As the least-populated state in the U.S., there's plenty of room for you to enjoy a quiet and relaxed retirement.
But Wyoming doesn't lack culture or activities.
If you love being outdoors, you have plenty of opportunities for hiking, skiing, fishing, boating, and more. Jackson Hole, Wyoming (where my uncle has a house) is one of the best places in the world to ski.
Cheyenne – the state's capital and largest city (with just barely 60,000 residents) – is great for people who want a little more nightlife or culture than the rest of the state offers. But don't imagine places staying open too late... this is still a small town. Cheyenne features some good restaurants, museums, and occasional entertainment options.
Remember, we looked at the whole country and came up with 14 great states to retire. The good news is you may already live in one of these states. They all offer an excellent quality of life without putting you in the poorhouse, like the remaining 36 will.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig
Editor's note: Dr. Eifrig and his team at Retirement Millionaire are currently working on a report detailing the 14 best states to retire in the U.S. They analyze each state for tax impacts, housing costs, culture, and climate to determine the top places for you and your money. To lock in your free copy of this report, sign up for Retirement Millionaire.
As part of your trial subscription, we'll send you a physical copy of Dr. Eifrig's book The Doctor's Protocol Field Manual. In it, he shares the three most important life-saving techniques every adult should know… an easy way to get all the nutrients you need when food supplies are short… and other practical survival tips (like where to sit on an airplane).