Congrats! Your kids are out of the house, your mortgage is paid off, and you’re ready to call it quits. The only problem is: where should you retire?
For those of us who want to retire in America, there are seven glorious states that have no state income taxes: Washington, Texas, Nevada, North Dakota, Alaska, Wyoming, and Florida. It makes sense for retirees with means to kiss their families goodbye and relocate – especially if their home state is severely mismanaged e.g. California and Illinois.
But money isn’t everything in retirement because there’s no point having money if you can’t spend it on fabulous shows, scrumptious foods, and cappuccinos outside on a warm, sunny day. San Francisco would rank right up there as an ideal place to retire if it wasn’t so darn expensive. Many of us won’t have unlimited funds when we reach retirement age so we must make sacrifices.
In terms of deciding the best states for a fantastic lifestyle, it’s impossible to say with conviction which ones rank the highest given the decision is so subjective. We’re probably all a little biased anyway. To find an objective solution, we must simply follow the money.
Millionaires have the highest ability to live anywhere they want. They don’t have to be cold during the winter nor do they need to live in the boondocks to save money unless they long for peace and quiet. Let’s simply track the number of millionaires per 1,000 households by state to come up with an objective list of the top lifestyle states.
All we have to do is see which states have the lowest taxes and the most millionaires to come up with our best states for retirees. Take a look at the charts and see if you can come up with the list without looking at the final chart.
TOP 10 STATES WITH THE LOWEST TAXES
THE TOP 25 STATES WITH THE MOST MILLIONAIRES
THE TOP RETIREMENT STATES
The top states for retirees reside on both lists. It’s interesting to see that low-tax states Wyoming, North Dakota, and Texas don’t make the top 25 states with the most millionaires. Clearly there must be lifestyle issues that more than weigh down the benefits of lower taxes, otherwise these states would have more millionaire residents.
Based on our analysis, Florida, Alaska, Delaware, Colorado, Nevada and Washington are the best retirement states due to a combination of low taxes and great lifestyles. This ranking cannot be more objective no matter how much you think Texas BBQ is the best food on Earth.
Delaware is probably the biggest surprise on the list (When was the last time a friend said they’re going on a vacation to Delaware?), followed by Wyoming not making the list given it is the #1 lowest tax state. If you’ve ever been to Jackson Hole, you’ll agree Wyoming is a lovely place.
Personally, I’m biased towards my home state of Hawaii. There’s a reason why Hawaii has the most number of millionaires per household – it’s an absolutely magical place. Not only are the beaches, sunshine, and hikes free, housing costs at least 20% less than San Francisco. Sure the traffic in Honolulu can be rough, but you’re retired, so there’s no need to go to work.
If none of the states on our proprietary list suit your fancy or if you simply can’t afford to retire in America, then consider retiring abroad. A couple can live like royalty in Chiang Mai, Thailand for $2,000 a month.
Readers, what states do you think are the best retirement states based on a combination of low taxes and a great lifestyle? Do you agree with this simple, yet logical analysis?
Photo: Mega yacht in Honolulu, HI.