Retirement should be a time to relax, enjoy your golden years, and finally reap the rewards of decades of hard work. But not all states offer the same quality of life for retirees, especially baby boomers, who are now turning 60 to 78 and make up nearly 21% of the U.S. population.
Rising healthcare costs, inflation, and housing shortages are hitting this generation hard. According to the Bureau of Labor Statistics, the average retiree household spends over $52,000 per year, with housing and medical expenses being the largest burdens.
While some states offer tax breaks, affordable living, and strong healthcare systems, others fall short, making them less-than-ideal places to settle down. Here are 17 states that may leave boomers struggling more than thriving in retirement.
New Jersey
New Jersey is always at the top of the list of “worst retirement states,” because it brings a devastating one-two punch to retirees: the nation’s highest property tax rate, 2.23% and a high income tax rate of up to 10.75%. Homeowners themselves spend a median of $9,345 a year on property taxes alone, so even mortgage-free retirees have a lot of housing costs.
The state’s overall cost of living is 22% above the national average, and healthcare costs are 25% above average. Though it offers excellent healthcare access and proximity to central cultural centers, its cost generally outweighs these benefits for thrifty retirees.
Hawaii
Paradise living comes at a price. Hawaii demands the most retirement savings in the nation, a staggering $2 million, the highest among all states. Though Hawaii boasts pleasant weather and low crime, the economic situation is dire. As one retirement report noted, “for many, necessities can start to feel like luxury expenses”.
The remoteness factor also means less access to healthcare than in states on the mainland, adding another hurdle for older residents.
New York
The Big Apple and the surrounding areas take a heavy toll on retirement savings. New York requires more than $1.037 million for a secure retirement, along with a 10.9% income tax and a1.6% property tax rate. A whopping 14.3% of the elderly live below the poverty line, and nearly one in five work past retirement age out of economic necessity.
Safety concerns contribute to the economic strain, with higher violent and property crime rates than in the country. Martin A. Smith, managing principal of Wealthcare Financial Group, warns that “retirees often face a whole range of surprising financial problems that can derail even the best-planned budgets.”
Massachusetts
Massachusetts is one of the least affordable retirement areas, with nearly $1.28 million to maintain a comfortable life. The state charges a 9% income tax and a 1.11% property tax rate, and an alarming 24% of seniors continue to work, which suggests necessity rather than desire.
Despite excellent healthcare access and plenty of green spaces, the 10.8% senior poverty rate hides the financial struggle most seniors endure in affording such a high-end lifestyle.
California
California’s sun-kissed reputation is paired with storm clouds of cost. The state possesses the nation’s highest income tax at 13.3%, and retirees need approximately $1.157 million to maintain their standard of living. One elderly person in ten is living in poverty, and the crime rate in the state is 31% above the national rate.
Recent data show that California’s housing costs and sales taxes impose even greater burdens on fixed incomes, making the Golden State less affordable for most retirees.
Kentucky
Kentucky ranks high on many “worst retirement” lists based on health care costs, 20% above the national average, even with overall lower costs of living. The state also has significant healthcare infrastructure problems, with subpar provision of quality medical care for seniors.
Kentucky’s life expectancy is lower than the national average, with recent data showing it to be 72.3 years, the fifth-lowest among U.S. states. WalletHub ranks Kentucky 38th in the nation for retiree-friendly tax policies, citing the state’s poor financial situation for seniors.
Mississippi
Mississippi presents a mixed retirement picture, with its low cost of living offset by severe poverty. The median household income of approximately $46,000 is 20-24% less than the national average. Health care is inexpensive but underfunded, which bodes ill for access and quality.
The state’s life expectancy of 71.9 years is a warning of potential health disparities, since the state capital, Jackson, has high violent crime rates.
Arkansas
Arkansas offers cheaper living at the expense of huge disadvantages. Arkansas’s median household income is the fifth lowest in the nation. Arkansas was also far below the 2016 national median household income of $59,309. Enormous poverty rates, crime rates, and incarceration rates paint a difficult picture for retirees.
Medical facilities remain underfunded, and a life expectancy of 73.8 years suggests underlying medical inequalities that can affect the quality of retirement.
Louisiana
In 2023, Louisiana’s median household income was $57,852, which is lower than the national average. Specifically, the median household income in Louisiana is 25.1% lower than the US median, according to USAFacts. While the cost of living is 21% lower than national averages, there are compromises in quality and access to healthcare.
The state’s life expectancy is 73 years, and the underfunded healthcare system leaves retirees uncertain about long-term care.
Washington
Washington State also faces rising costs, in part due to immigration from California, which adds complexity for retirees. Living costs are 12% above the national average, and medical costs are 15% above average.
There is a decent life expectancy of 78.2 years, but the unstable weather and an economy in flux make retirement planning tenuous.
Alaska
Alaska consistently sits at the tail end of retirement state lists due to record healthcare costs and inclement weather. The state’s remoteness equates to limited access to specialist care, but exceptionally high living costs. Healthcare facilities are behind the aging population, making Alaska particularly challenging for retirees with healthcare needs.
Illinois
Illinois has severe issues with high taxation and pension system woes. The state’s fiscal woes have raised questions about public pension stability, and the high crime rates in urban communities pose safety concerns for retirees. Tax burdens remain high, and the state’s fiscal woes could affect future retiree benefits and services.
Rhode Island
Rhode Island’s cost of living is 13% higher than the US average, and the state has fewer medical facilities and hospitals per population. Fewer healthcare facilities mean elderly residents face access issues. Retirement is complicated by high costs and limited medical facilities, despite the natural beauty and oceanfront land.
West Virginia
West Virginia ranks 46th in the nation for elderly care, with poor results, high costs, and low access. West Virginia’s healthcare system is not particularly efficient in caring for its aging population, presenting significant concerns for retirees who require medical care.
Even with the state’s lower cost of living, trade-offs in healthcare quality pose significant retirement-planning concerns.
Connecticut
Connecticut boasts high costs and heavy taxation that burden retirees. The proximity to high-cost metropolitan cities is the reason for the cost, with few benefits for retirement-age residents. Medical costs and overall costs are in conflict, and many retirees are unable to pay on fixed incomes.
Vermont
Vermont combines high taxes with cold climates and rural isolation problems. The state’s remote areas can limit seniors’ access to health care and other essential services. While offering natural beauty, the functional difficulties of winter weather and sparse infrastructure create retirement challenges.
Oregon
Oregon is experiencing shifting economic conditions, with rising costs, partly due to relocation from California. The cost of living is 12% above national standards, and healthcare costs are 15% above average. Despite high life expectancy ratings, the shifting cost trend calls into question long-term retirement planning.
Key Takeaways
The retirement landscape has changed radically for baby boomers from previous generations. Although these 17 states pose major challenges to retirees, keep in mind that effective retirement planning is far more than a geographic imperative. Think about your priorities, your health needs, how close your family will be, and your finances when making this important decision.
The American dream of an easy retirement is within reach; it simply takes some careful planning, sensible expectations, and sometimes, a willingness to consider non-traditional places. Your golden years must be spent indulging in the fruits of your labor, not stressing over how to make ends meet.
