Monday, May 6, 2013

The 10 Best States for Retirement

The 10 Best States for Retirement

A new analysis shows where the best states for retirement are in the U.S., and it includes none of the usual suspects. The South and the upper Midwest dominate the top 10, led by Tennessee and Louisiana. ...
U.S.News & World Report LP

 

The 10 Best States for Retirement

A new analysis shows where the best states for retirement are in the U.S., and it includes none of the usual suspects.
The South and the upper Midwest dominate the top 10, led by Tennessee and Louisiana. Further down the list are Arizona (no. 33 out of 51), California (48), and Florida (19), three states known as retirement hotspots. Consumer finance site Bankrate.com compiled the list by considering data that seniors would likely consider in choosing a place to retire, such as climate, tax rates, cost of living, access to health care, and crime rates.
[READ: What Are Your Real Retirement Costs?]
Here are the top 10 states in Bankrate's analysis:
1. Tennessee
2. Louisiana
3. South Dakota
4. Kentucky
5. Mississippi
6. Virginia
7. West Virginia
8. Alabama
9. Nebraska
10. North Dakota
It's not often you hear seniors say they're retiring to Memphis, Tenn., or the French Quarter, and Chris Kahn, the analyst at Bankrate.com who prepared the rankings, acknowledges that the results of the analysis are, in his words, "surprising." However, he says that the results give good guidance on places that fulfill basic needs that many retirees have, while some top retirement destinations do not fulfill all of these criteria.
[READ: Obama Budget Proposes Cap on Retirement Savings]
The questions of where taxes and crime rates are lowest and health care is most accessible are "the basic questions that I think everyone should ask," Kahn says. "Some of the states you would expect to be in our top, like Florida, are great. Florida has beaches and year-round sunshine and everything that you would expect, but also a relatively high cost of living [and] a relatively high crime rate."
Still, if Tennessee is a warm, low-cost place, why haven't retirees already flocked there? In part, it's because people take many other, unquantifiable factors into account in deciding where to retire.
"They don't necessarily want to go where it is going to be easiest for them financially and for their health care," Kahn says. He points out that people also consider many other factors, like where their children and grandchildren live, where their friends are retiring, and which places have the best recreational options, like golf courses, when deciding where to live out their golden years.
This is also an illustration of the strengths and limitations of rankings. (It should be noted here that U.S. News does its own ranking of the best places to retire.) Bankrate's system foregrounds economic, health care and climate factors, but it's not likely that all retirees will use Bankrate's exact mix of criteria to determine where to retire, so retirees might disagree when they hear that North Dakota beat out Florida. Even if North Dakota is, objectively, a better place to go financially, the cold and the remoteness of much of the state may keep many retirees away.
[READ: Two-Thirds of Middle-Age Workers Say They Can't Afford to Retire]
Still, a ranking system can like Bankrate's can uncover good options that consumers may not have considered. And the massive wave of Baby Boomers entering retirement will be looking for options. Kahn says he foresees people seeking out new places to retire.
"I think population has been moving east to west and north to south for a long time," Kahn says. "You're going to see different kinds of migration patterns." Maybe even to Appalachia and the Dakotas.


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The 10 Best States for Retirement

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