When planning for retirement, choosing the right place to live is a central decision. Many factors matter—proximity to family, climate, and the kind of community you prefer—but cost often outweighs the rest. Recent analysis from Bankrate highlights that affordability should be a primary consideration when deciding where to spend your retirement years.
Why senior living affordability matters
Bankrate’s 2024 ranking of the best and worst states for retirement combined multiple data points into five weighted categories to determine overall suitability for retirees. The categories and their weights were:
- Affordability (40%)
- Overall well-being (25%)
- Healthcare quality and cost (20%)
- Weather (10%)
- Crime (5%)
Affordability received the largest weight to reflect the financial pressures many Americans face as they approach retirement. Inflation and rising living costs have reduced people’s ability to save, so stretching retirement income becomes crucial. Bankrate’s affordability assessment used state-level metrics such as cost-of-living indices, combined state and local sales tax rates, average annual property taxes, and homeowners insurance costs.
Top states for retirement
According to Bankrate’s analysis, Delaware ranks as the best state for retirees in 2024. While Delaware has a relatively high cost of living, its favorable tax structure—no state or local sales tax, lower-than-average property taxes, and no taxation of Social Security benefits—boosts its affordability score. Delaware also scored well on measures of community well-being, cultural options, and diversity. Its temperate climate and generally low risk of major natural disasters add to its appeal, although healthcare costs and crime affected its overall score in some areas.
Delaware’s jump from second place in 2023 to first in 2024 underscores how much tax policy and other affordability factors can influence retirement planning. As Bankrate’s lead data reporter noted, despite Delaware’s cost-of-living score, it performs strongly across other affordability metrics such as property taxes, sales taxes, and homeowners insurance.
The rest of the top five states for retirees in 2024—chosen largely for affordability and lower housing costs—are:
- West Virginia
- Georgia
- South Carolina
- Missouri
States with less senior living affordability
At the other end of the spectrum, some states are less favorable for retirees concerned about affordability. Alaska sits near the bottom of the list, with low rankings in affordability, healthcare cost and quality, weather conditions, and crime. Other states at the bottom of Bankrate’s 2024 rankings include New York, Washington, California, and North Dakota.
New York, Washington, and California are known for high living expenses and, in many areas, high property taxes and expensive healthcare—factors that can quickly erode retirement savings. North Dakota’s position reflects colder weather, above-average healthcare costs, and lower-than-average measures of resident well-being.
Additional senior living location considerations
Affordability should be a top priority when evaluating retirement locations, but it isn’t the only one. To make an informed decision, retirees should evaluate personal budgets, spending patterns, and projected retirement income to determine how long savings will last and what lifestyle those savings can support.
Moving from a high-cost state to a lower-cost one can free up retirement dollars, but it’s important that the fiscal benefits align with lifestyle preferences. For example, West Virginia may offer strong affordability, but it won’t satisfy retirees seeking year-round warm, sunny weather.
The quality and availability of healthcare
Access to quality healthcare, including long-term care services, is a crucial factor in selecting a retirement location. Healthcare costs can be unpredictable and may become a major component of retirement expenses. Some retirees choose continuing care retirement communities (CCRCs) or life plan communities to secure access to a continuum of care if needs change.
Tax implications
Taxes vary widely by state and can significantly affect retirement budgets. Differences in property, sales, and income taxes should be evaluated when considering relocation. For those moving into a CCRC, there may also be tax implications or potential deductions related to entry fees or monthly service fees—consulting a tax professional is advisable.
A solid community
Community matters. A supportive, socially active environment benefits emotional and physical health, offering friendships, assistance during illness or mobility changes, and emotional support after the loss of loved ones. Strong community ties can greatly enhance quality of life in retirement.
A balanced approach to choosing a retirement location
Choosing where to retire requires balancing affordability with healthcare access, tax considerations, climate preferences, and community fit. For retirees focused on preserving savings, selecting an affordable location can extend financial security and enable a more comfortable, worry-free retirement. Combining financial clarity with personal priorities will help you choose a retirement destination that supports both your budget and your lifestyle goals.