Top 5 Retirement States for Middle-Class Americans

Senior couple, smile and outdoor in nature park showing love, care and happy on a retirement holiday on summer day.
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Only 21% of middle-class Americans believe they’ll have a comfortable retirement. But, if you move to a budget-friendly state with many amenities tailor-made for retirees, that could make your retirement a lot more cozy without breaking the bank.

Some states have great retirement activities and vibrant senior communities, along with a reasonable cost of living, sunny weather, advanced healthcare, and low taxation. 

In this article, GOBankingRates will consider all these factors to determine the top six retirement states for middle-class Americans.

1. Tennessee

Tennessee does not tax Social Security benefits, pension income or wages, while property taxes remain among the lowest in the country. This combination allows retirees to maximize their savings and focus on enjoying life.

From Nashville’s musical heritage to the serene beauty of the Smoky Mountains, Tennessee offers a mix of vibrant urban culture and peaceful rural retreats. It’s a state where retirees can find both excitement and tranquility.

Bill Boersma, a life insurance consulting expert, explains the financial advantages retirees can expect.

“Tennessee allows middle-class retirees to stretch their dollars further — a crucial element in ensuring that financial strategies align with life expectations, much like optimizing a life insurance portfolio to perform effectively,” he said.

This means retirees can enjoy their golden years with fewer financial concerns while taking advantage of the state’s rich cultural and natural offerings.

Retirees in Tennessee also benefit from some of the nation’s lowest healthcare costs, making medical care accessible and affordable. Cities like Knoxville and Chattanooga boast hospitals with specialized geriatric services. 

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The Volunteer State’s slower pace of life and many opportunities for outdoor recreation create an environment that promotes better well-being for its senior residents.

2. Florida 

“Florida offers a trifecta of financial benefits: No state income, estate, or inheritance tax,” said Alex Bradford, CEO at Rain App.

“This helps retirees maximize their Social Security and retirement income, which means less stress about money and more opportunity to live the comfortable lifestyle they’ve worked for.”

One of the top factors that makes Florida great for retirement is its extensive healthcare network. Some of the nation’s best-ranked hospitals and geriatric care centers are in cities such as Tampa and Orlando. 

The state’s healthcare infrastructure is broad enough to match the retirees’ changing needs and everything from preventive care to specialized service.

Plus, it is also known for its retirement communities, which provide the convenience of a full range of amenities, including fitness centers, organized activities and social clubs to encourage a sense of belonging.

Naples and Sarasota are also cities well known for their retiree-friendly neighborhoods, which make it easy to make friends and be socially active. Art shows, farmer’s markets and volunteer opportunities give retirement life vibrancy and keep residents socially connected and active.

“This warm climate supports year-round outdoor activities that help the residents maintain healthy, active lifestyles,” said Brandon Blakeley, co-founder at Mirador Living.

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“These communities add a great deal to the quality of life in Florida through social engagement, amenities and security designed to meet the needs of older adults.”

3. Texas

The Lone Star State has no state income tax and has plenty of affordable housing options, making it possible for retirees to live a high quality of life without breaking the bank.

Austin, Dallas and Houston are home to some of the country’s biggest museums, parks and entertainment, appealing to retirees looking for an active lifestyle. 

From country music festivals to state fairs, retirees have plenty to do and see during their golden years. Along with milder winters, seniors can enjoy outdoor activities throughout the year.

Boersma detailed the financial planning opportunities Texas provides.

“Texas allows retirees to reassess their living conditions and finances with a focus on sustainable growth, echoing how a progressive, nuanced approach can maximize return on invested capital in insurance portfolios,” he said.

Here, retirees benefit financially and have access to a vibrant social scene with decent healthcare, making for a great retirement experience.

4. South Carolina 

The Palmetto State stands out for its pleasant weather and affordable cost of living, which is 6% below the national average.

Its property tax rate is notably low at 0.52%, approximately half the national average. Middle-class retirees older than 65 are exempt from property tax, and you can deduct up to $50,000 from your home’s taxable value. 

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Retirees within the same bracket can deduct up to $10,000 from their retirement income. The Social Security benefits are not taxable at all.

Anyone aged 60 and above is free to take tuition-free classes at any of their state colleges and universities. Adding to its appeal, South Carolina boasts a cost of living that supports retirement funds’ sustainability.

“South Carolina takes the lead here… with a cost of living that easily supports the sustainability of retirement funds, great access to quality and affordable health care services, and a favorable climate for retirees,” said Mafe Aclado, the general manager of Coupon Snake.

Acquiring a home in this Southern state is more affordable, as well. As of Oct. 31, 2024, its median home value is $296,987, lower than the national average of $420,400.

South Carolina remains an excellent choice for retirees seeking a laid-back lifestyle with plenty of recreational activities and budget-friendly living.

5. Arizona

Arizona is tax-friendly for retirees, making it one of the best retirement states for middle-class Americans. The state offers tax exemptions on retirement income, including pensions and any distributions from retirement accounts. 

Arizona does not tax Social Security benefits, providing retirees with less financial strain. Additionally, the state does not impose an inheritance tax, ensuring that retirees’ estates can be passed on without this burden.

“Arizona has micro-communities focused on interests like wellness and arts,” said Silvia Lupone, a retirement financial planner and real estate specialist for retirees. “Affordable areas such as Green Valley offer workshops and social groups, creating a warm, purpose-driven community feel.”

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Without forgetting, healthcare services in Arizona are all a plus for retirees. Dentistry and doctor check-ups are 5% lower than the national average, per RentCafe.  

The Grand Canyon State is a perfect option for middle-class retirees who prefer year-round sunshine. Retirees can enjoy recreational activities like biking and hiking thanks to Arizona’s mountain ranges and several trails. The state is also a haven for golfers because of its 370 golf courses.

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