One Of The Best States For Retirees Is Known For Low Taxes And Outdoor Activities

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There are plenty of reasons to consider retiring to the Centennial State. For starters, Colorado provides a tax break for people who are at least 55 years old and receive a pension/annuity — and for widowed spouses and orphaned children. If under the age of 65 at year's end, a qualified taxpayer can also deduct the smaller of $20,000 or their federally taxable pension or annuity income. If older than 65, this number increases to $24,000. Plus, Colorado is a state that doesn't tax Social Security benefits, and, of the states that charge sales tax, is the state with the lowest sales tax rate – 2.9% in 2025. 

The Colorado Office of Economic Development & International Trade lists another monetary reason to consider moving to Colorado: on average, people pay 4.2% less for their healthcare in the state. Plus, U.S. News & World Report noted that eight of the state's hospitals meet high standards and are recognized as Best Regional Hospitals. The No. 1 ranked hospital in the state is Aurora's UCHealth University of Colorado Hospital, which is nationally ranked in four different adult specialties.

With that said, people moving to Colorado will likely need to consider the real estate market, with Zillow showing the average state home value at $549,409. However, prices vary by location with a highly affordable suburb of Colorado Springs, Pueblo, boasting an average home value of $292,207, and the western city of Grand Junction coming in at $423,215. According to Real Estate Statistics, the 2025 average monthly cost for utilities in the state is $507.92. 

Simply being outdoors in Colorado can surround you with natural beauty, which is one reason why people of all levels of experience flock to the Centennial State to ride their bicycles — a state with an average 300 days of sunshine each year and majestic mountain peaks, shimmering waterways, and eye-catching greenery. Because so many people bike in Colorado, numerous biking clubs exist — which makes it a natural way to make new friends in a new place — another potential bonus of retiring there. If interested in an e-bike, prices can range from $800-$3,000+ in 2025, but Colorado residents can receive a $450 discount, granted by the Colorado Energy Office and the Colorado Department of Revenue. If preferring to hike through the beauty of Colorado's state parks, residents with Colorado plates on their cars can buy a season pass for just $29.

An annual celebration to look forward to is the Colorado State Fair, a late summer extravaganza with free entry on certain days for seniors aged 60 and up. They also offer days where a single price (in 2025, it's $15) covers all of the day's planned events including a rodeo, concert, carnival, and more. Fair foods cost extra but, on Fridays, each food vendor offers one menu item for $5 through 5 p.m.

Although grocery prices are increasing overall in the United States, according to consumer research journal Consumer Affairs, the percentage of year-over-year increases has varied significantly by state, with Pennsylvania topping the list at 8.2%, as of November 2024. At the bottom was Colorado, at just 2.9%. Using a monthly grocery bill of $750 as an example, Pennsylvanians grocery costs would increase $61.50 a month while, in Colorado, the increase would be $21.75. This means that residents of Colorado save roughly $477 a year compared to those in Pennsylvania. Plus, the costs of three pantry staples (beans, grains, and pasta) actually decreased by nearly 2% between 2022 and 2023 in Colorado. 

Where you do your grocery shopping can also make a significant difference. In a study of more than 2,000 grocery stores, NetCredit found that the most cost-effective choice in Colorado was Target. As of June 2025, the retailer charged a whopping 15.69% less for groceries than the state average and, as of August 2025, Target lists 29 stores in the state. Meanwhile, Family Dollar also charged 10.5% less than average state prices, while Save A Lot charged 6.5% less. For those looking to splurge and eat out, there are specific ways to save money on restaurant meals to keep in mind, like checking out daily specials, passing on appetizers and desserts, and avoiding restaurants known for pricey menus. Look for places that offer senior discounts, which may be offered on certain days or during times of the day.