Top 10 States to Retire in 2024

Top 10 States to Retire in 2024 – JustForSeniors.com Guide

Selecting the top ten states to retire in the United States involves a comprehensive evaluation based on the previously outlined criteria such as cost of living, healthcare accessibility, climate, community engagement, and more. This list is designed to offer a variety of options catering to diverse preferences and needs. It’s important to note that the “best” state can vary significantly depending on individual priorities and lifestyles.

StateCost of LivingHealthcare AccessClimateTax Friendliness for Retirees
FloridaLower than averageHigh qualityWarm year-roundNo state income tax
TexasVaried; generally affordableRenowned in major citiesWarm, hot summersNo state income tax
ArizonaRelatively lowQuality in major citiesWarm desertModerate; favorable policies
PennsylvaniaAffordableHigh quality in major citiesFour seasonsNo taxes on retirement income
North CarolinaBelow averageGood in major areasMild winters, warm summersReasonable rates
South CarolinaAffordableQuality in major citiesWarm, pleasantAttractive rates, no estate tax
VirginiaVaried; more affordable outside citiesHigh quality near D.C.Four seasons, mild wintersModerate; some advantages
TennesseeLowGood in major citiesMild winters, warm summersNo state income tax, favorable on retirement income
NevadaAffordable outside VegasQuality in larger citiesWarm and dryNo state income tax, low property taxes
IdahoGenerally affordable, rising in some areasGrowing accessFour seasons, mix mild/coldModerate tax rates, lower property taxes

Top 10 States to Retire in 2024 - #1. Florida
  • Cost of Living: Generally lower than the national average, especially in cities away from the more expensive coastal areas.
  • Florida Tax Friendliness:
    • No State Income Tax: Florida does not impose a state income tax, which includes no tax on income from Social Security benefits, pensions, IRAs, 401(k)s, and other retirement income.
    • No Estate or Inheritance Tax: Unlike some states, Florida does not have an estate tax or an inheritance tax, which can be beneficial for retirees looking to pass on assets to their heirs.
    • Sales Tax: Florida has a state sales tax rate of 6%, with localities able to add as much as 2.5%, making the maximum possible sales tax 8.5%. While not the lowest, the absence of a state income tax often offsets the sales tax rate for many retirees.
    • Property Taxes: Florida’s property tax rates are considered moderate. The state offers several exemptions that can lower property tax bills, such as the homestead exemption of up to $50,000 for residents who own and occupy their home as their primary residence. There is also an additional exemption for seniors over a certain age, who meet certain income limitations, which can further reduce the property tax burden.
    • Intangible Personal Property Tax: Florida does not tax intangible personal property, such as investments. This is a benefit for retirees who have investments outside of retirement accounts.
  • Healthcare: High number of quality healthcare facilities, especially in areas with a higher concentration of retirees.
  • Climate: Warm climate year-round, appealing for those looking to avoid cold winters.
  • Community and Lifestyle: High senior population offering a robust network of retirement communities and social activities.
Top 10 States to Retire in 2024 - #2. Texas
  • Cost of Living: Varied across the state but generally affordable in many areas.
  • Texas Tax Friendliness: No state income tax, which can significantly benefit retirees.
    • No State Income Tax: Texas does not impose a state income tax. This means all forms of income, including Social Security benefits, pension incomes, and withdrawals from retirement accounts like IRAs and 401(k)s, are not taxed at the state level.
    • Property Taxes: While Texas does not have a state income tax, it does have relatively high property tax rates compared to other states. However, there are exemptions that can help lower the tax burden for seniors:
      • Over-65 Homestead Exemption: Homeowners who are 65 or older may qualify for an additional exemption on their primary residence’s property taxes.
      • Property Tax Ceiling for Over-65 Homeowners: Once a homeowner qualifies for the Over-65 Homestead Exemption, the school district property taxes on their homestead cannot increase as long as the ownership status remains unchanged. Other types of property taxes can increase, but some districts may also freeze these taxes.
    • Sales Tax: The state sales tax rate in Texas is 6.25%, and localities can add up to 2% to that, making the maximum possible sales tax rate 8.25%. This is relatively high, but the absence of a state income tax often balances this out for many residents.
    • Estate or Inheritance Tax: Texas does not levy an estate or inheritance tax, making it financially beneficial for retirees concerned about the wealth they will pass on to their heirs.
    • No Tax on Intangible Personal Property: Texas does not tax intangible personal property like stocks and bonds, which can be advantageous for retirees with significant non-retirement investment portfolios.
  • Healthcare: Large cities like Houston and Dallas have renowned healthcare facilities.
  • Climate: Warm climate, though it can be quite hot in the summer.
  • Community and Lifestyle: Diverse cultural amenities and recreational opportunities.
Top 10 States to Retire in 2024 - #3. Arizona
  • Cost of Living: Relatively low, especially in comparison to neighboring states like California.
  • Arizona Tax Friendliness: Moderate tax rates and policies friendly to retirees.
    • State Income Tax: Arizona does have a state income tax, but it’s relatively low compared to other states. The rates range from 2.59% to 4.50% as of my last update. Social Security income is exempt from state taxes, which is a significant benefit for many retirees. Additionally, income from public pensions is partially exempt, with certain limits.
    • Sales Tax: The state sales tax rate is 5.6%, but cities and counties can add their own taxes, potentially bringing the total sales tax rate higher. While this might affect the cost of living, the overall impact should be considered in the context of Arizona’s other retiree-friendly tax policies.
    • Property Taxes: Property tax rates in Arizona are relatively low compared to the national average. The state offers several property tax relief programs for seniors:
      • Senior Property Valuation Protection Program: Qualifying homeowners aged 65 and older can freeze their property’s value for tax purposes, which can help stabilize their property tax bills.
      • Property Tax Exemptions: Arizona provides property tax exemptions for widows, widowers, and disabled persons, potentially lowering the tax burden for those who qualify.
    • Estate or Inheritance Tax: Arizona does not impose an estate or inheritance tax, which is beneficial for retirees looking to pass on assets to their heirs without the worry of additional state-level taxes.
    • Retirement Income: While Arizona does tax some retirement income, it offers exemptions for Social Security income and has a deduction for pension income, which can lower the taxable income for many retirees.
  • Healthcare: Access to quality healthcare, particularly in Phoenix and Tucson.
  • Climate: Warm desert climate, popular with retirees looking to avoid the cold.
  • Community and Lifestyle: Numerous retirement communities and outdoor activities for active seniors.
Top 10 States to Retire in 2024 - #4. Pennsylvania
  • Cost of Living: Affordable, particularly in smaller cities and rural areas.
  • Pennsylvania Tax Friendliness: Retiree-friendly tax policies, including no taxes on retirement income.
    • No Tax on Retirement Income: Pennsylvania does not tax retirement income for those aged 60 or older. This includes Social Security benefits, pensions, IRAs, 401(k)s, and other retirement plans. This exemption makes it a highly attractive option for retirees looking to maximize their fixed incomes.
    • State Income Tax: The state does have a relatively low flat income tax rate of 3.07%, one of the lowest in the country for states that impose an income tax. However, most types of retirement income are exempt for seniors.
    • Sales Tax: Pennsylvania has a 6% state sales tax, and local jurisdictions can add an additional 2% in Philadelphia and 1% in Pittsburgh. Importantly, food, most clothing, textbooks, drugs, and residential heating fuels are exempt from sales tax, which can further reduce living costs for retirees.
    • Property Taxes: While property taxes in Pennsylvania can be relatively high, the state offers several programs to help seniors:
      • Property Tax/Rent Rebate Program: This program is available to seniors 65 and older, widows and widowers 50 and older, and people with disabilities. Eligibility is income-based, and it can provide significant relief.
      • Homestead Exemption: Available in some areas, this can reduce the taxable value of a home for property tax purposes, offering further savings for homeowners.
    • Estate or Inheritance Tax: Pennsylvania does impose an inheritance tax, with rates ranging from 4.5% for transfers to direct descendants (children/grandchildren) to 12% for transfers to siblings. However, there is no inheritance tax levied on transfers to a surviving spouse or to parents from children aged 21 or younger. There is no estate tax.
  • Healthcare: Access to high-quality healthcare systems, especially in Philadelphia and Pittsburgh.
  • Climate: Four distinct seasons, appealing to those who enjoy a variety of weather.
  • Community and Lifestyle: Rich historical and cultural amenities.
Top 10 States to Retire in 2024 - #5. North Carolina
  • Cost of Living: Below the national average in many areas.
  • North Carolina Tax Friendliness: Reasonable tax rates for retirees.
    • Flat Income Tax Rate: North Carolina has a flat state income tax rate, which was 4.99% as of my last update. This simplifies the tax system and applies to most types of income, including retirement income.
    • Social Security Exemption: Social Security retirement benefits are exempt from state income taxes in North Carolina, which can significantly reduce the tax burden for many retirees.
    • Retirement Income Taxation: While North Carolina taxes other forms of retirement income (such as from IRAs and 401(k)s) at the flat state rate, the exemption for Social Security benefits often offsets a significant portion of the overall tax liability for retirees.
    • State and Local Sales Tax: The combined state and local sales taxes in North Carolina can range from about 6.75% to 7.5%, depending on the locality. This is relatively moderate and comparable to many other states.
    • Moderate Property Taxes: Property tax rates in North Carolina are relatively moderate, with the exact rate varying by county and municipality. The state’s average effective property tax rate is below the national average.
    • No Estate or Inheritance Tax: North Carolina does not impose an estate or inheritance tax, making it more attractive for retirees concerned about the financial legacy they leave to their heirs.
    • Homestead Exemption for Seniors: North Carolina offers a homestead exclusion for qualifying seniors (age 65 and older) and disabled persons, which can exclude a portion of the home’s value from property taxes. To qualify, the homeowner’s income must fall below a certain threshold, which is subject to change.
  • Healthcare: Good access to healthcare, particularly in the Research Triangle area.
  • Climate: Mild winters and warm summers.
  • Community and Lifestyle: Diverse environments from mountains to beaches, appealing to a range of outdoor enthusiasts.
Top 10 States to Retire in 2024 - #6. South Carolina
  • Cost of Living: Affordable, with a cost of living below the national average.
  • South Carolina Tax Friendliness: Attractive tax rates for retirees and no state estate tax.
    • Progressive Income Tax Rates: South Carolina has a progressive income tax system, with rates ranging from 0% to 7%. However, retirees benefit from significant deductions and exemptions that can lower their effective tax rate.
    • Retirement Income Deductions: South Carolina offers a substantial deduction on retirement income, including Social Security benefits, which are not taxed by the state. Additionally, residents who are 65 years or older can deduct up to $15,000 ($30,000 for married couples) of their retirement income from any source, provided it’s included in their federal taxable income.
    • Military Retirement: Military retirement income is also eligible for special deductions, further reducing the tax burden for veterans.
    • State Sales Tax: The state sales tax rate is 6%, with local jurisdictions allowed to add up to 3% more. While this places the total potential sales tax rate at 9%, essential items like groceries are taxed at a lower rate, and prescription drugs are exempt.
    • Senior Citizen Sales Tax Exemption: South Carolina does not offer a general sales tax exemption for seniors. However, the lower tax on groceries and exemption for medications provide some relief.
    • Relatively Low Rates: Property taxes in South Carolina are among the lowest in the United States. The state’s average effective property tax rate is quite favorable when compared to the national average.
    • Homestead Exemption: Homeowners who are 65 years old or older, are totally and permanently disabled, or are legally blind may qualify for the Homestead Exemption, which exempts the first $50,000 of the fair market value of their home from all property taxes.
    • No Estate or Inheritance Tax: Like many tax-friendly states for retirees, South Carolina does not levy an estate or inheritance tax, making it a more attractive option for those concerned about their financial legacy.
  • Healthcare: Quality healthcare services in major cities.
  • Climate: Warm climate and pleasant year-round weather.
  • Community and Lifestyle: Popular coastal areas and a growing number of retirement communities.
Top 10 States to Retire in 2024 - #7. Virginia
  • Cost of Living: Varied, with more affordable options in rural and suburban areas.
  • Virginia Tax Friendliness: Moderate; offers some tax advantages for retirees.
    • Progressive Income Tax Rates: Virginia has a progressive income tax system, with rates ranging from 2% to 5.75%. This structure means that tax liability increases with income, which could impact retirees depending on their total retirement income.
    • Social Security Exemption: Social Security income is not taxed in Virginia, aligning it with many other retiree-friendly states. This exemption can significantly benefit retirees relying primarily on Social Security for their income.
    • Deductions for Seniors: Virginia offers a deduction of up to $12,000 for taxpayers who are age 65 or older, depending on their income level. This deduction can help lower the effective tax rate for many retirees.
    • Moderate Sales Tax: The state sales tax rate in Virginia is 5.3%, with local jurisdictions able to add up to 0.7%, making the total sales tax rate as high as 6%. Food for home consumption is taxed at a reduced rate of 2.5%, which includes both state and local taxes.
    • Local Rates Apply: Property taxes in Virginia are administered by local governments and can vary significantly across the state. The rates are generally considered moderate, but exact amounts depend on the specific locality.
    • No Estate or Inheritance Tax: Virginia does not impose an estate or inheritance tax, which is a favorable policy for retirees concerned about the financial legacy they leave to their heirs.
    • Senior Tax Relief Programs: Some localities in Virginia offer property tax relief or deferral programs for seniors and disabled individuals, based on age, income, and/or disability status. These programs can substantially reduce property tax burdens for eligible residents.
  • Healthcare: High-quality healthcare facilities, especially in northern Virginia near Washington, D.C.
  • Climate: Four seasons with relatively mild winters compared to the Northeast.
  • Community and Lifestyle: Rich in American history and cultural offerings.
Top 10 States to Retire in 2024 - #8. Tennessee
  • Cost of Living: Low cost of living and housing costs.
  • Tennessee Tax Friendliness: No state income tax and favorable tax treatment on retirement income.
    • No Personal Income Tax: Tennessee stands out for not levying a personal income tax on wages and salaries. It previously taxed interest and dividend income through the Hall Income Tax, but this tax was completely phased out as of January 1, 2021, enhancing its appeal for retirees with investment income.
    • Taxation of Retirement Income: Given the absence of a state income tax, retirement income—including Social Security benefits, pension income, and withdrawals from retirement accounts like 401(k)s and IRAs—is not taxed at the state level, providing significant savings for retirees.
    • High Sales Tax Rates: Tennessee compensates for its lack of income tax with one of the highest combined state and local sales tax rates in the United States, exceeding 9% in many areas. While this might impact overall living expenses, the absence of income tax often offsets the higher sales tax burden for many retirees.
    • Groceries: Grocery items are subject to sales tax in Tennessee but at a reduced state rate, offering a slight relief in day-to-day expenses.
    • Property Tax Rates: The property tax rates in Tennessee are relatively moderate on a national scale, with rates varying significantly across different counties and cities.
    • Tax Relief for Seniors: Tennessee offers property tax relief for homeowners 65 and older on their primary residence, subject to certain income restrictions. This program can substantially reduce the property tax liability for eligible seniors, making it more affordable to own a home in retirement.
    • No Estate or Inheritance Tax: As of the last update, Tennessee does not impose an estate or inheritance tax, further solidifying its status as a tax-friendly state for retirees and those planning their estates.
  • Healthcare: Good healthcare facilities, especially in cities like Nashville and Memphis.
  • Climate: Generally mild winters and warm summers.
  • Community and Lifestyle: Music, culture, and outdoor activities abound.
Top 10 States to Retire in 2024 - #9. Nevada
  • Cost of Living: Affordable in many areas outside of Las Vegas.
  • Nevada Tax Friendliness: No state income tax and low property taxes.
    • No Personal Income Tax: One of Nevada’s most significant advantages is its lack of a state income tax. This means all forms of income, including Social Security benefits, pension incomes, and withdrawals from retirement accounts like 401(k)s and IRAs, are not taxed at the state level.
    • Sales Tax Rate: Nevada has a relatively high state sales tax rate, which can vary depending on the county. The state base rate is 6.85%, with total rates including local surcharges ranging up to approximately 8.265%. While higher than some states, the absence of a state income tax may offset the impact of sales taxes for many retirees.
    • Moderate Property Taxes: Property taxes in Nevada are among the more reasonable in the country. The state employs a property tax cap to limit annual increases in taxable value, ensuring that property taxes remain relatively stable for homeowners.
    • Property Tax Assistance for Seniors: Nevada offers property tax assistance programs for seniors 62 and older with certain income limits. These programs can provide refunds or rebates on a portion of the property taxes paid, offering additional financial relief to qualifying seniors.
    • No Estate or Inheritance Tax: Nevada does not impose an estate or inheritance tax, making it financially advantageous for estate planning and leaving a legacy to heirs without the burden of additional state-level taxes.
    • Intangible Personal Property Tax: Nevada does not tax intangible personal property, such as stocks and bonds. This is beneficial for retirees with significant investments outside of retirement accounts.
    • Cost of Living: Despite the tax benefits, it’s important for retirees to consider the overall cost of living in Nevada, which can vary significantly from the rural areas to more urban centers like Las Vegas and Reno. Housing costs, in particular, can be higher in popular retirement destinations.
  • Healthcare: Access to quality healthcare in larger cities.
  • Climate: Warm and dry climate, which can be ideal for those with certain health conditions.
  • Community and Lifestyle: Entertainment and recreational activities, especially in and around Las Vegas.
Top 10 States to Retire in 2024 - #10. Idaho
  • Cost of Living: Generally affordable, though some areas are seeing rising costs.
  • Idaho Tax Friendliness: Moderate tax rates, but lower property taxes in many areas.
    • Progressive Income Tax Rates: Idaho has a progressive income tax system, with rates ranging from 1.0% to 6.5% across seven brackets. Retirement income, including Social Security benefits, pensions, and withdrawals from retirement accounts, is subject to state income tax. However, Social Security benefits are exempt for taxpayers who qualify based on their income level, offering some relief for lower-income retirees.
    • Deductions and Credits: Idaho allows for certain deductions and tax credits that can reduce the overall tax burden for seniors. For instance, there is a grocery credit that offsets the sales tax paid on food, which is available to all residents, including retirees.
    • General Sales Tax: The state sales tax rate in Idaho is 6%. In addition, local jurisdictions can impose additional sales taxes, which can slightly increase the overall sales tax rate in some areas. Groceries are taxed at the same rate as other goods, but the aforementioned grocery credit helps mitigate this cost for residents.
    • Property Tax Rates: Property taxes in Idaho are relatively moderate and are based on the assessed value of the property. Rates vary by county and city.
    • Circuit Breaker Program: Idaho offers a property tax reduction program for qualified seniors aged 65 and older, disabled individuals, widows, and widowers, among others. This program, often referred to as the “circuit breaker,” provides a reduction in property taxes on the primary residence and up to one acre of land for those who meet certain income guidelines.
    • No Estate or Inheritance Tax: Idaho does not impose an estate or inheritance tax, which is beneficial for retirees concerned about the legacy they leave to their heirs.
  • Healthcare: Growing access to healthcare facilities.
  • Climate: Four seasons with a mix of mild and cold weather.
  • Community and Lifestyle: Natural beauty with plenty of outdoor activities for nature lovers.

When considering these states, it’s crucial to visit and experience them firsthand, if possible, to determine the best fit based on personal preferences and lifestyle needs. Each state offers a unique blend of benefits, and the ideal choice varies from person to person.

In conclusion, choosing the right state for retirement is a multifaceted decision that depends on a range of factors including cost of living, healthcare access, tax policies, climate, and personal lifestyle preferences. The “Top 10 States to Retire” list highlights destinations that offer a blend of financial benefits, quality of life, and diverse environments to meet the needs and desires of retirees.

From the sunny beaches of Florida to the serene landscapes of Idaho, each state presents unique advantages and opportunities for a fulfilling retirement. It’s essential to consider your priorities and conduct thorough research, including visits and consultations with financial advisors, to make the best choice for your golden years. Remember, the ideal retirement location is not just about affordability or tax savings; it’s about finding a place where you can enjoy life to the fullest, surrounded by the amenities, climate, and community that make you happiest.

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