Retirement: Where to Live for the Best Services & Quality of Life

This article is a compilation of the research I have undertaken on some of the most popular places for retirees within America. Some of the questions I address here include: Which are the best states for retirees? What advantages are there to moving away from one’s home and community, to a neighborhood that could be better suited for the next stage in life? Here we take a look at this issue from the financial side.

In 2017, the AARP, deemed these states the cheapest (with 1. being the least expensive) as of 2017 here are the cheapest cities to retire to in the US starting with the most inexpensive:

• Birmingham, Alabama
• Detroit, Michigan
• Jackson, Mississippi
• Memphis, Tennessee
• Toledo, Ohio
• Brownsville, Texas
• Augusta, Georgia
• Cleveland, Ohio
• Akron, Ohio
• Montgomery, Alabama.

Here we will delve into more detail on Alabama and Ohio since they are featured more than once in the above list. We will also take a less detailed look at the other states.

With a population of 4.8 million and a 13% lower than average cost of living (the fourth cheapest in America) Alabama makes for an attractive retirement option. The 2019 estimated figure needed to retire is $1,099,832 (with $6,249 spent on healthcare and $43,993 overall annually). With this though it should be noted that utility bills are not the cheapest with an estimated $3,790 per year.
When it comes to the IRS, pensioners thrive in Alabama. One example of this is the state income taxation exemption of full Social Security income. Here is a comprehensive list of Income Exempt from Alabama Income Taxation.

In Ohio, the cost of living is 6.9%, below the national average. In Akron, Ohio (ranked Number 9 in our list), there are many senior discounts and the cost of living there is less than $75 a day!

Plus, Social Security retirement benefits are fully exempt from state income taxes in Ohio. Pension incomes are taxed as regular income, but there are credits available. In addition, Forbes ranked Cincinnati as the fifth most affordable metropolitan region to live in with healthcare costs significantly below average at 0.2%. There is another benefit to living in Ohio… or to moving there before retirement. As one couple found, moving to Ohio before becoming a pensioner can actually “supercharge” retirement savings. In addition, the senior activities offered in the state which are inexpensive and housing costs are 21 percent lower than the national average.

The advantage of retiring to Michigan is that money goes farther. Being on a pension usually translates to a lower, fixed income. To facilitate long-term stability, being in a state like Michigan can be invaluable. plus, the cost of living there is 8 percent lower than comparable US states (such as Chicago).

According to a partner at Mississippi firm Medley & Brown Financial Advisors Tim Medley, Mississippi charges no income tax on certified retirement income such as 401(k)s and IRAs. Plus, housing prices are less expensive than comparable states and cost of living is low. Sales taxes are average and property taxes low. in fact, overall it has been stated that: “Mississippi residents benefit from the lowest per capital tax burden in the nation.”

Sales taxes in Tennessee can be high but property taxes are relatively low. However, with a population of 6.5 million (15% over 65) and cost of living 12% below the national average, it definitely makes a good fiscal option for retirees. State income taxes are also not levied so retirement income is actually worth a lot more.

Texas has great tax laws, making finances easier for everyone. In fact, “Texas is one of just seven states that refrains from taxing personal income, interest income, and dividend income.” In addition, “he state sales tax in Texas is a mere 6.25 percent (with food, prescription drugs, and non-prescription drugs exempt), and local additions are limited to 2 percent, so the sales tax maxes out at 8.25 percent. Furthermore, there’s no inheritance or estate tax.”

Georgia

In Lauren Perez’s article on retirees, she found Georgia to have “the highest percentage of seniors as part of the population in this top 10 at 18.3%.”

Augusta, Georgia has a very low cost of living and a median home value of less than $100,000. there is a state income tax but Market Watch has determined tax rules to be favorable to retirees.