This Is The Best State To Retire In (& It's Not Florida)

When you think about where people in the United States retire, the Southern state of Florida likely comes to mind. And, according to a 2022 study by moving company HireAHelper, that would be a good guess, as Florida was indeed the top destination for U.S. retirees in its survey, accounting for 11.8% of all out-of-state relocations. The Sunshine State's warm weather is one likely reason for its retirement popularity, but another is taxes. Florida is one of only nine states without an income tax, meaning that no matter where a retiree's income comes from — a retirement account, part-time job, etc. — Florida won't tax it. This all said, though, Florida isn't the best place in the U.S. to retire, at least according to Bankrate. Per its state rankings, the best state for retirees is Iowa.

In its study, Bankrate found Iowa offered retirees a strong combination of cost of living (No. 3 for affordability), quality and affordable health care (No. 12), and low crime (No. 12). Specifically, the cost of housing put Iowa at No. 3 in Bankrate's study for affordability, with a median home price of $223,400 (per Redfin data), 42.4% below the U.S. median home price. To further compare, it's also 44.7% lower than Florida ($404,100) and 72% lower than California ($799,500). As Bankrate also noted, Iowa's cost of living index is the eighth best in the United States.

For well-being and weather conditions, Iowa ranked more in the middle of the pack in Bankrate's study — Nos. 31 and 38, respectively. Bankrate also noted that if you're looking for diversity, Iowa doesn't offer the kind of cultural mix that a state like Delaware — No. 2 overall — provides. But, in its calculation, affordability was the most important element for the best and worst states for retirees, accounting for 40% of a state's overall ranking. This was followed by overall well-being at 25%, quality and cost of health care at 20%, weather at 10%, and crime at 5%.

Affordable living is definitely a major factor for retirees, which, again, may explain why Florida, with its lack of state income tax, remains such a draw for retirement-aged people. With this said, Floridians do pay property tax. As for taxes in Iowa, it seems the state is rising in the rankings, per Iowans for Tax Relief. Per data from the Tax Foundation, Iowa now ranks 22nd in the nation for individual income tax and 15th in sales tax, though it's in the bottom fifth for property tax (41st).

Relocating to a new city in retirement is a major decision, and, as Bankrate noted, it's important to look down the road to make a truly informed one. As Larry Sprung, a financial adviser and founder of Mitlin Financial, told Bankrate on the topic of retirement planning, "If you're going to uproot and relocate to another area, you have to make a decision not only about the way things look today, but whether a place is going to be sustainable and less expensive over the long term."

Retirees typically live on a fixed budget, so taking into account the costs of living, then comparing state to state, can give you a better idea of how far your money can take you. One consideration, of course, is also when Social Security benefits begin. Though you can start receiving benefits starting at age 62, to get your full retirement benefits, you need to wait until age 67 (for anyone born after 1960). So, as people wait on their benefits, they may continue to work full time, which, ultimately, will delay their retirement and any subsequent relocation.

According to Gallup's annual Economy and Personal Finance survey for 2022, people are retiring later today than did in the 1990s. The average retirement age of those surveyed is now 61 versus 57 in 1991 (when the survey was first conducted). Not only this, but Gallup also found that people are predicting they'll retire much later. The average expected retirement age of respondents was 66 in 2022, six years higher than in 1995.