It’s the dream of many to spend their golden years relaxing near an ocean or enjoying warm weather, but the top states for retirees — Iowa and West Virginia, according to a new study — are far from either coast and outside the sunbelt.
“While climate was one of the factors we looked at, from day to day, there is a lot more to a safe and happy retirement than whether or not it’s warm outside,” said Richard Barrington, senior financial analyst for MoneyRates and the study’s author.
Barrington stressed that there’s more for retirees than Florida and Arizona — often considered traditional retiree destinations — and that general impressions don’t tell the entire story.
“It pays to look at the data [because] you might overlook some good possibilities,” he said. “You might miss some of the potential drawbacks.”
MoneyRates evaluated the country’s best states for retirees for the 10th year in a row, using 10 data sets across four major categories: economic factors (cost of living, property taxes, and unemployment), crime and safety (violent and property crime rates), lifestyle factors (older population and average temperatures), and health care conditions (nursing facility capability, life expectancy, and health care costs).
There are trade-offs for every location, and Barrington said selecting a retirement destination ultimately comes down to personal priorities, concerns, and circumstances.
Ten best states for retirement
Tied for number one, Iowa and West Virginia might not come to the top of mind for retirement havens, but both score exceptionally high in a variety of cost-related factors — an appealing trait for financially-conscious retirees.
Iowa offers retirees a strong economy — boasting the third-lowest unemployment rate in the country — which may appeal to seniors looking for part-time work after they’ve retired from their primary career. The Hawkeye State also has an extensive nursing care facility network with large capacities to support the state’s older population.
West Virginia leads in affordability with its overall cost of living — 9.1% below the national average — and the third-lowest healthcare costs in the country. Residents in the Mountain State also have the benefit of the fifth-lowest average property tax burden in the country.
Arkansas and Mississippi (tied for No. 3); Florida and Kentucky (tied for No. 5); Connecticut (No. 7); Missouri (No. 8), and Alabama and Rhode Island (tied for No. 9) round out the top 10.
Five worst states for retirement
Those coming up on retirement age should steer clear of the West Coast, according to the study’s findings. Colorado (No. 46); California (No. 47); Washington (No. 48); Nevada (No. 49), and Alaska (No. 50) ranked as the five bottom states for retirees.
The cluster of West Coast states received demerits for high crime rates (Alaska at No. 49 and Nevada at No. 40); poor healthcare conditions, including low life expectancy rates in Alaska (No. 50), Nevada (No. 49), and Washington (No. 46); chilly year-round temperatures (Alaska at No. 50, Colorado at No. 48, and Washington at No. 45); and California’s high cost of living (No. 44), the study found.
‘It’s not just taxes’
Making the decision to relocate in your retirement years is a daunting one. Without a job to tether you to a certain location, the country suddenly opens up to you and different climates or cheaper regions might be more appealing.
“There's always weather, there's always amenities, there's proximity to things that you might have always aspired to be near whether that be beaches or mountains or desert,” James Ciprich, a certified financial planner and wealth advisor with RegentAtlantic Capital, told Yahoo Money. “The environment is key. It's not just taxes.”
Here’s what you should think about when deciding to make a relocation part of your retirement plan.
Rent before you buy
Rather than selling your primary residence when you’re transitioning into retirement and buying a new property with your proceeds, Ciprich strongly recommended renting before buying, especially if you’re planning to buy in an area where you haven’t spent a lot of time.
Renting puts the searchers in a “position of flexibility and leverage” and leaves the door open to other possibilities, Ciprich said, especially if you find yourself somewhere like Florida and can’t bear the summertime humidity or hurricanes.
Renting, as opposed to buying, affords retirees to find a different or nearby area that appeals to their needs more without being tied down to a new home that now has to be sold.
“You're not going to make any money by buying and selling homes,” he said. “That's where realtors make their money — not retirees.”
Too much of a good thing can turn you off
Most people look toward retirement with the romantic notion that with their newfound freedom, they’ll use the time to pursue the hobbies they’ve always wanted. Whatever you see yourself doing during retirement, be it a sport or activity, make sure your new home offers more because variety is healthy.
Ciprich cautioned against moving towards a specific area of the country that offers a limited range of activities and encouraged people to “look a little bit more long term and identify what they want to spend their time doing.”
When identifying a new place to live, ask yourself if the area accommodates current hobbies, while leaving room to accommodate potential future activities.
College towns aren’t just for students
There are options beyond Florida and Arizona for retirees, as Ciprich pointed out, and a new trend that’s emerged is seniors moving to big college towns and mid-sized cities like Austin, Texas, Ann Arbor, Michigan, or Raleigh, North Carolina that boast performing arts centers, museums, sporting events, and university-based hospital systems.
“You have that proximity to not only stimulating activities in retirement, but you also have that proximity to care that might be really something of a concern as people age,” Ciprich said.
Retirement isn’t vacation
Having a favorite vacation destination makes for wonderful memories, but it doesn’t mean it’s a great place to retire.
Soon-to-be retirees should consider their favorite destinations more critically for day-to-day needs instead of vacation needs. Healthcare is a major expense for retirees, so great weather, nearby beaches or mountains, or affordable taxes are selling points, but so is proximity to quality health care.
“Sometimes the best places that we take a vacation to don't necessarily turn out to be the best places to spend your entire retirement,” he said.