Where people retire will have economic implications on their incomes and ultimately lifestyle. Granted, family, friends and weather are also important issues. Household finances, however, will impact the economic comforts of retirees.
Kiplinger has evaluated and ranked the 15 worst states in which to retire from a financial perspective. Factors included:
- Average Health Care Costs – based on data from HealthView Services and includes Medicare, supplemental insurance, dental insurance and out-of-pocket costs for a 65-year old couple (both retired) expected to live to 87 and 89, husband and wife, respectively. This works out to an average $8,400 per person per year or $387,731 total in retirement per couple.
- Ranking of state’s economic health by Mercatus Center at George Mason University, including revenue sources, debts, budgets, ability to fund pensions
- Health of each state’s population aged 65 and up including 35 factors ranging from bad habits (smoking, for example) to hospital quality and home care nursing
- Household incomes and poverty rates from U.S. Census Bureau plus other related demographic information
So where are the 10 worst states to retire according to Kiplinger? While the usual suspects were included, Montana was a surprise to me.
To read the entire report of the 15 worst states with state-specific details click http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement-2016/index.html
To read more on Kiplinger’s state tax ratings click http://www.kiplinger.com/tool/retirement/T055-S001-state-by-state-guide-to-taxes-on-retirees/
As said before, where one retires is not exclusively an economic issue. Family, weather, friends are often more important. Freddie Mac released a study this week of homeowners aged 56 and up in which 63 percent of respondents hope to age in place, if possible. When, however, finances are considered, then some states can be financially challenging for retirees.
Another stand-out metric, at least to me, was the cost of healthcare for retirees averaging $8,400 per person per year or $387,731 per couple over their entire retirement.
For me, wherever I retire in the future will not have a state income tax. Some of the states even impose a state income tax on Social Security benefits. Be certain to read the details included in the Kiplinger article. Also high on my list is a state that is solvent and has sound fiscal policy allowing ongoing spending on infrastructure. Finally, having been raised on a ranch in Southwestern Colorado and feeding tons of hay in the winter at sub-zero temperatures, I also want to avoid any location that has material snow fall and cold. The ranch in the Texas Hill Country is looking pretty good right now for the future.
What other factors do you believe will impact your retirement location decision?