If you’re looking for a place where your retirement funds will go the furthest, consider moving to a state that won’t tax your income. Of course, taxes shouldn’t be one of the only factors to consider when deciding where to retire. But moving to a state with no income tax could leave you with more money to cover other costs in retirement.
There are seven states with no income tax on wages, earnings or investment income: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. New Hampshire and Tennessee also don't tax wages but do tax investment income. If any of the no-income-tax states sound appealing, the question then is: Which city is the best to retire to in each of these no-tax states?
To pinpoint the best places to retire, GOBankingRates identified the three largest cities in each no-income-tax state and considered four factors:
- Percentage of the population 65 and older
- Median monthly rent
- Monthly cost of basic utilities
- Cost of a meal at an inexpensive restaurant
Best City to Retire in Alaska: Juneau
- Percent of the population 65 and older: 8.4%
- Median rent per month: $1,837
- Utilities: $295
- Meal at inexpensive restaurant: $15
If you want to save money in retirement, Alaska is a great choice. However, keep in mind that senior care might cost you a small fortune — it's one of the most expensive states for senior care services.
Still, retiring in Alaska can be financially beneficial. Not only can you escape state income tax by living in Alaska, but also you can get paid for living in this state thanks to its oil wealth. Residents receive an annual dividend from the Alaska Permanent Fund, which was created in 1976 to share the state’s oil income with people who’ve been a resident for at least a year before applying. The dividend currently is $1,100.
Why You Should Retire in Juneau
Juneau, the state capital, has the highest percentage of adults 65 and older among the Alaskan cities we surveyed. And the median rent is lower here than in the state’s largest city, Anchorage.
Despite its remoteness, retiring in Juneau does have its perks. For example, it’s a great place for retirees who love the outdoors and history. Popular activities include whale watching, glacier sightseeing and exploring the city's historic downtown district. Plus, Juneau is one of the wealthiest cities in the country.
Best City to Retire in Florida: Tampa
- Percent of the population 65 and older: 11%
- Median rent per month: $1,542
- Utilities: $125
- Meal at inexpensive restaurant: $14
In general, Florida is one of the best retirement states. It's a haven for retirees because it's tax-friendly and offers a warm climate. Plus, it's home to some of the best retirement communities in America.
But if you’re trying to choose the best city for retirement in the Sunshine State, Tampa is the better retirement choice than Miami or Jacksonville.
Why You Should Retire in Tampa
Located on Florida's Gulf Coast, Tampa is a dream for retirees who enjoy being on the water. Plus, the median rent in Tampa is about $700 cheaper than in Miami, and the cost of monthly utilities is about $40 less than in Jacksonville. In fact, Tampa stands out as one of the top cities in the U.S. where your retirement nest egg stretches furthest because of its affordable cost of living.
Best City to Retire in Nevada: Henderson
- Percent of the population 65 and older: 14.3%
- Median rent per month: $1,500
- Utilities: $100
- Meal at inexpensive restaurant: $10
This suburb of Las Vegas is Nevada’s second-largest city. Although the median rent is about $100 higher in Henderson than in Las Vegas, utilities and the cost of a meal at an inexpensive restaurant are cheaper.
Why You Should Retire in Henderson
Henderson caters to older adults with its senior-living neighborhoods and Heritage Park Senior Facility that offers classes, programs, social and wellness services. It also has a recreation and aquatic complex, a 180-mile trail system and award-winning healthcare facilities.
Retire in Paradise: The Cost to Retire in Las Vegas and Other Premium Travel Destinations
Best City to Retire in South Dakota: Aberdeen
- Percent of the population 65 and older: 16.4%
- Median rent per month: $600
- Utilities: $145
- Meal at inexpensive restaurant: $11
South Dakota might not come to mind as one of the best places to retire. However, it was the top moving destination in 2016 with the highest percentage of people — including retirees — moving there than any other state, according to United Van Lines 40th Annual National Movers Study.
Why You Should Retire in Aberdeen
Not only is it one of the best places to retire for under $1,000 a month, Aberdeen actually has the highest percentage of adults 65 and older of any city we surveyed. This small city in northeastern South Dakota also has the cheapest median rent of any city on our list.
Aberdeen also boasts a senior center that provides recreation and support services. And, it offers plenty for outdoor enthusiasts to do, including hunting and fishing.
Best City to Retire in Texas: San Antonio
- Percent of the population 65 and older: 10.4%
- Median rent per month: $1,450
- Utilities: $130
- Meal at inexpensive restaurant: $11
Of the three largest cities in Texas, San Antonio has the highest percentage of adults 65 and older. It’s also the most affordable big city in the state — with the lowest median monthly rent, lowest monthly utility cost and cheapest meal at an inexpensive restaurant. In fact, a separate GOBankingRates study found San Antonio ranks as one of the cheapest big cities to retire.
Why You Should Retire in San Antonio
San Antonio has plenty to offer retirees. It has four adult and senior centers, eight municipal golf courses, more than 140 miles of trails in city parks, and free arts and culture events.
Are You Really Ready to Retire? Ask Yourself These 21 Questions First
Best City to Retire in Washington: Spokane
- Percent of the population 65 and older: 12.8%
- Median rent per month: $1,250
- Utilities: $120
- Meal at inexpensive restaurant: $12
This city in eastern Washington offers more affordable living costs for retirees than the state’s two other largest cities. The median monthly rent and cost of utilities are cheaper here than in Seattle and Tacoma.
Why You Should Retire in Spokane
Not only is Spokane one of the most affordable places to retire in Washington, but also it’s one of the 50 cheapest places to retire in the U.S., a separate GOBankingRates study found. Plus, it has the highest percentage of adults 65 and older among the three cities surveyed in Washington.
Best City to Retire in Wyoming: Casper
- Percent of the population 65 and older: 12.9%
- Median rent per month: $1,050
- Utilities: $121
- Meal at inexpensive restaurant: $10
Although Cheyenne, Wyoming’s capital, has a slightly larger population of older adults, Casper might be a better place to retire because the median monthly rent and cost of utilities are lower. In fact, another GOBankingRates survey found that Casper is one of the best places to retire if you’re living on a fixed income.
Why You Should Retire in Casper
You might also want to consider retiring to this mountain town if you want to maintain an active lifestyle. Casper offers plenty of outdoor recreation — boating, fishing, hiking, skiing and more. It also has a thriving arts and culture scene.
Methodology: To identify the best city for retirees in states with no income tax, GOBankingRates looked at four factors in the three largest cities in each state: 1) Percentage of the population 65 and older, based on 2010 Census Bureau data; 2) Median monthly rent on homes, sourced from Trulia on Aug. 4, 2017; 3) cost of monthly utilities, sourced from Numbeo on Aug. 1, 2017; and 4) cost of a meal at an inexpensive restaurant, sourced from Numbeo on Aug. 1, 2017.