If you’re on a fixed income — like most people in retirement — controlling your expenses becomes more important than ever.
One way to do that? Living somewhere with a lower cost of living. That’s part of the thinking behind WalletHub’s recent ranking of “2022’s Best States to Retire.”
While their ranking incorporates “47 key indicators of retirement-friendliness,” we’re just going to highlight the best states in one category: affordability.
Here are the states deemed most affordable for retirees.
10. North Carolina
North Carolina was middle-of-the-pack (No. 26) in WalletHub’s quality of life ranking but is one of the most affordable states.
One factor in that affordability is taxes. As we mention in “26 States That Won’t Tax Your Social Security This Year,” the state does not tax Social Security benefits and has a flat income tax rate of 5.25%.
Virginia isn’t just for lovers — it’s also for retirees. Not only one of the most affordable states in WalletHub’s estimation, it also ranked No. 7 for quality of life and No. 13 for health care. (We noted in 2021 that Virginia has the largest share of hospitals given an “A” rating for safety in the U.S.)
Taken together, that was enough to put it at No. 2 in WalletHub’s overall ranking of best states to retire in.
WalletHub’s study found that Georgia has one of the lowest percentages of the population that’s age 65 and older, but it is nonetheless a relatively affordable state for retirees.
A separate study from Bankrate in 2021 rated Georgia as the best state for retirees based on affordability, wellness, weather and other factors.
Louisiana ranked well for affordability, although it placed No. 41 in WalletHub’s overall ranking of states to retire in. Social Security benefits are exempt from state taxes here, while normal income tax rates are 2%-6%.
Delaware has the second-best “taxpayer” ranking behind Alaska, according to WalletHub, and one of the highest shares of the population that’s age 65 and older. Residents in Delaware may be able to exclude a certain amount of retirement income from taxes, and the state does not tax Social Security benefits, according to the Delaware Division of Revenue.
Not only does Nevada not tax Social Security benefits, it also has no personal income tax. Those factors likely contributed to WalletHub giving the state the fourth-best “taxpayer” ranking.
Florida is famous for its retirees, so it’s no surprise WalletHub found it to be the state with the highest percentage of the population aged 65 and older. The state also ranked No. 5 for quality of life. Florida is another state where retirees won’t contend with taxes on Social Security benefits or personal income.
3. South Carolina
Despite ranking below average in the other categories of WalletHub’s study, South Carolina’s high score on affordability helped give it the No. 12 position overall among the best states to retire in.
One small downside? South Carolina residents get more spam phone calls than almost any other state, as we reported in “5 States That Get the Most Robocalls.”
Tennessee ranks 39th overall as a place for retirees, according to WalletHub, but it takes the No. 2 spot for affordability. As we explain in “5 States Cutting Taxes for Next Year — and 2 Raising Them,” the state does not tax any kind of income anymore.
WalletHub gave Alabama the lowest ranking for health care but the best for affordability. Some other things Alabama has going for it: some of the lowest property taxes in the country and no taxes on Social Security benefits and certain other sources of retiree income.
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