While Florida is often considered a popular retirement destination due to its warm climate and lack of state income tax, it isn't the absolute cheapest state to spend your golden years in.
Rather, Alabama is the most affordable state to retire in, according to WalletHub's "2023 Best States to Retire." The analysis compared all 50 states across three key categories: health care, quality of life and affordability.
For the affordability metric, WalletHub used data from the Council for Community and Economic Research, the U.S. Census Bureau and other various agencies. The ranking factored in elements such as general tax-friendliness, adjusted cost of living and annual cost of in-home services.
While Alabama ranked first in affordability, it ranked 44th in quality of life and 50th in health care.
But if money is your main concern, $1 million in retirement savings would be enough to sustain you for 22 years in Alabama, according to GoBankingRates data. However, that falls just shy of the typical 25 years or more that retirement can last.
On the other hand, that same amount in retirement savings would run out much quicker in a more expensive state. In Hawaii, a $1 million retirement fund would be empty in a little over 10 years — the fastest of any state, according to GoBankingRates.
Despite ranking ninth in affordability, Florida came in at No. 4 for quality of life. Residents of the Sunshine State bear the sixth-lowest tax burden in the country, according to WalletHub, but Florida's cost of living has steadily risen over the past few years. A $1 million retirement reserve would last about 18 years there, per GoBankingRates.
Here are the 10 cheapest states to retire in, according to WalletHub:
- Alabama
- Tennessee
- West Virginia
- South Carolina
- Wyoming
- Delaware
- Georgia
- Arkansas
- Florida
- Mississippi
While affordability can be an important aspect to consider when deciding where to retire, there are many other elements to factor in as well.
"The state that you live in should be a place that meets your new goals for this period of life," Dawn Carr, a professor and faculty associate at Florida State University's Pepper Institution on Aging and Public Policy, says in WalletHub's study.
The state that you live in should be a place that meets your new goals for this period of life.
Dawn Carr
professor and faculty associate at Florida State University
If you've always hated cold weather, you may be drawn to somewhere warmer. Or your top priority may be relocating to be closer to family.
Before permanently moving to a new locale, try spending a few days there at multiple points in the year to gain a better sense of what it would be like to live there.
Retirees should also acknowledge how a state's political and religious orientations, cultural opportunities and weather conditions may substantially detract from an otherwise favorable financial environment, Stephen Golant, a professor at the University of Florida, says in WalletHub's study.
"Although it is helpful to distinguish states by whether they offer favorable cost-of-living opportunities, the quality of life found in its different urban and rural locales will not necessarily be consistent with overall state portrayals," he says.
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