Best and Worst U.S. Cities To Retire Rich

No matter how hard you worked and how much money you accumulated, retirement will be a time of budgeting for most people, because there won’t be any new income coming in, and Social Security benefits are not exceptionally high.

That, and the fact that cost of living varies widely from state to state will play a role in helping retirees determine the best, and worst, states to retire in. 

To help determine where you should retire, GOBankingRates ranked all 50 states on four main factors affecting retirees: taxes, living expenses, healthcare, and Social Security. These four factors were broken down into sets of data points such as state sales tax, median property tax rates, annual property tax paid, median home value, and annual healthcare costs.

If you want to retire rich, click through to see the best places for retirees.

Low taxes, including state sales tax, Social Security taxes, and property taxes, are among the primary factors driving the cities that made it to the top 10 best cities to retire rich. Many of these states also have lower home values than those in the 10 worst states to retire rich.

• State Sales Tax: 6.34%
• Cost of Living: 99.0
• Average Social Security Benefits: $1,835.37

Compared to other states, Pennsylvania’s state sales tax isn’t the highest, but in the top ten, it’s on the higher side at 6.34%. Median property tax rate is also on the higher side, at 1.49%, translating to $3,800 per year in property taxes.

• State Sales Tax: 0.00%
• Cost of Living: 115.1
• Average Social Security Benefits: $1,779.75

Oregon residents have the benefit of no state sales tax, and a higher Social Security Benefits of $1,779.75 per year. However, annual healthcare spend is a bit high here, at $7,128 per year.

• State Sales Tax: 7.43%
• Cost of Living: 96.5
• Average Social Security Benefits: $1,714.89

South Carolina’s average home value is relatively low, at $285,053. With a low median property tax rate of 0.56% homeowners only pay $1,596 in property taxes per year.

• State Sales Tax: 9.25%
• Cost of Living: 88.8
• Average Social Security Benefits: $1,648.37

Alabama has a high state sales tax, but a low median property tax rate of 0.39%, which translates to an extremely low $824 per year.

• State Sales Tax: 5.75%
• Cost of Living: 103.1
• Average Social Security Benefits: $1,845.66

Average Social Security Benefits are on the higher side in Virginia, at $1,845.66. While cost of living is a bit over the national average, but neither state sales tax nor median property tax rate are the highest on this list.

• State Sales Tax: 6.00%
• Cost of Living: 92.7
• Average Social Security Benefits: $1,814.00

The average home value in Michigan is $226,907, and the property tax rate of 1.38% equals a relatively low $3,131 per year.

• State Sales Tax: 7.00%
• Cost of Living: 91.5
• Average Social Security Benefits: $1,777.13

In Indiana retirees will be glad to know that the annual healthcare spend is $6,953 and the cost of living is almost 10% below the national average.

• State Sales Tax: 6.00%
• Cost of Living: 119.5
• Average Social Security Benefits: $1,952.64

The average home value in Maryland is $410,731 and the median property tax rate is 1.04%, which translates to $4,272 per year.

• State Sales Tax: 5.36%
• Cost of Living: 92.8
• Average Social Security Benefits: $1,797.81

In Wyoming, like many states on this list, there is no tax on Social Security Benefits, which are just shy of $1,800 per year. Healthcare spending annually here is $6,932 and the cost of living is 7.2% lower than the national average.

• State Sales Tax: 0.00%
• Cost of Living: 102.6
• Average Social Security Benefits: $1,942.75

Delaware takes the No. 1 spot even though the cost of living index is a tad bit above the national average, because the average social security benefits here are the highest, and there’s no state sales tax. Additionally, the median property tax rate is low, at just 0.59%, but the average home value is relatively high, at $373,034.

One of the common themes that the 10 worst cities to retire rich have in common is a higher cost of living that is above the national average, sometimes significantly above, like Hawaii and Massachusetts.

• State Sales Tax: 6.30%
• Cost of Living: 114.9
• Average Social Security Benefits: $1,833.32

Vermont has a high median property tax rate of 1.82%, which has homeowners paying an average of $6,323 annually in property taxes.

• State Sales Tax: 7.00%
• Cost of Living: 110.5
• Average Social Security Benefits: $1,864.59

The state does not tax benefits for people who have reached full retirement age as defined by the Social Security Administration (between 66 and 67, depending on year of birth) and have an adjusted gross income (AGI) below $95,800 if their filing status is single or head of household or $119,750 for a couple filing jointly.

• State Sales Tax: 8.82%
• Cost of Living: 134.5
• Average Social Security Benefits: $1,745.42

While the property tax rate in California is not super high, at 0.73%, the average home value is more than double the national average, at $754,949, leaving California retirees to pay an average of $5,511 per year in property taxes.

• State Sales Tax: 4.44%
• Cost of Living: 179
• Average Social Security Benefits: $1,793.89

Hawaii is, in some ways, a conundrum when it comes to retiring. The cost of living is a whopping 79% higher than the national average overall, however its state sales tax and median property tax rate are low. Still, it also has one of the higher annual healthcare spends, at $8,324 per year.

• State Sales Tax: 6.35%
• Cost of Living: 113.1
• Average Social Security Benefits: $1,990.10

Retiring in Connecticut, where cost of living is 13.1% higher than the national average, and annual healthcare spend is $7,712 might not be ideal.

• State Sales Tax: 7.72%
• Cost of Living: 94.2
• Average Social Security Benefits: $1,664.65

The average home value in New Mexico is an affordable $289,594. Median property tax rate here is also low, just 0.66%, which leaves residents paying less than $2,000 annually in property taxes.

• State Sales Tax: 8.33%
• Cost of Living: 88.4
• Average Social Security Benefits: $1,697.30

Missouri also taxes Social Security Benefits, but that will end in 2024, which is good, as these benefits are on the lower side already.

• State Sales Tax: 6.95%
• Cost of Living: 90.1
• Average Social Security Benefits: $1,815.60

Nebraska is one of the few states that still does apply some taxes to Social Security benefits. They don’t tax these benefits for couples filing jointly with an adjusted gross income (AGI) below $61,760 and for singles with an AGI below $45,790. Above those levels, a portion of Social Security income is taxable, but that will decline annually as the state phases out taxation of benefits.

• State Sales Tax: 8.52%
• Cost of Living: 125.1
• Average Social Security Benefits: $1,798.76

The Big Apple’s average home value is $411,285, and with the median property tax rate at 1.38%, New York retirees who own a home are paying $5,676 in annual property taxes, as well as a high state sales tax.

• State Sales Tax: 6.25%
• Cost of Living: 148.4
• Average Social Security Benefits: $1,907.00

The No. 1 worst state to retire rich is the New England state of Massachusetts, where the cost of living index is almost 50% higher than national average. While Social Security benefits are also higher than other states, everything runs more expensive here.

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Joel Anderson contributed to the reporting for this article.

Methodology: GOBankingRates ranked all 50 states on four main factors affecting retirees: taxes, living expenses, healthcare, and Social Security. These four factors were broken down into sets of data points. In the taxes category, we examined: (1) average state sales tax rates, sourced from The Tax Foundation; (2) median property tax rates, sourced from The Tax Foundation; (3) estimated annual property tax based on the median home value, sourced from Zillow; and (4) state taxes on Social Security benefits, sourced from AARP. In the living expenses category, we examined: (5) the median value for single-family residences as of 05/2023, sourced from Zillow; and (6) each state’s cost of living index value, where the U.S. average is 100, sourced from the Missouri Economic Research and Information Center (MERIC). To capture (7) healthcare costs in each state, we multiplied the Consumer Expenditure Survey’s estimate of total annual spending on healthcare by people 65 and up by each state’s healthcare cost index according to MERIC. To capture the impact of Social Security, we ranked states on (8) their average monthly benefit payment for retirees. For all the factor above except the average Social Security payment, smaller values (lower taxes, lower living expenses, lower healthcare costs) were scored as more desirable. For Social Security, higher payments were scored as more desirable. Our final ranking was determined by each state’s cumulative score on all of the above factors, with #1 being the overall best state to retire rich and #50 being worst. Factors 4 and 7 were weighted double to create each state’s final score. All research was conducted on and is up-to-date as of 06/12/2023.