A new report by Bankrate has ranked Delaware as the top state for retirement and Alaska as the worst, looking at metrics on overall well-being, weather, affordability, and crime, among others.
It is Delaware’s first year at the top of the annual survey; it was in second place last year, while Iowa held the top spot but ranked ninth this year due to larger increases in cost of living and higher taxes.
“Delaware overtook Iowa for the number one spot in this year’s ranking of the best and worst states to retire,” Bankrate Analyst Alex Gailey said in a press release email. “While Delaware is a pricier state to live in, the state’s high-quality healthcare, light tax burden, affordable homeowners insurance, and good weather propelled it to the top spot this year. Delaware also scored well in diversity, wellness, and culture and has a high share of residents who are 62 and older compared to its population.”
Delaware is also the only top-five state not in the Midwest or South for the second year in a row. West Virginia was second on the list, followed by Georgia, South Carolina, and Missouri.
Southern states are generally more affordable and have better weather than those in the north. Affordability made up 40 percent of the report’s ranking.
“The reality is that most Americans feel behind on saving for retirement, which means affordability is critical,” Mr. Gailey added. “A move to a more affordable location could be an effective way for soon-to-be retirees to stretch their retirement savings in this economy. If you’re behind on savings and retirement is just a few years away, now’s the time to play catch-up.”
The report used cost of living data from the Council for Community and Economic Research from the first quarter of 2024, state and local sales tax rates, property tax data from 2023, and homeowners insurance costs.
After affordability, overall well-being was 25 percent of the ranking, cost of healthcare was 20 percent, weather was 10 percent, and crime was 5 percent.
Overall well-being looked at the number of people over 62 living in the state and the number of arts, entertainment, and recreation establishments per 100,000 residents, along with other factors.
Based on the above metrics, Alaska, New York, Washington, California, and North Dakota were the study’s bottom five states.
While most Americans see 65 to 70 as the ideal age for retirement, it is possible to take Social Security benefits as young as age 62.
Bankrate notes that if retirees can wait until age 70 to retire, they will get more money each month.
Medicare benefits begin at age 65, and Bankrate noted that healthcare expenses are likely to be the largest expense for most retirees at an average of $157,500 throughout retirement, according to a 2023 Fidelity cost estimate.
The Western states of Colorado, Washington, Idaho, Utah, and Oregon are ranked highest in terms of quality and cost of health care.
“You might live somewhere that is beautiful, but maybe it’s very remote and the nearest hospital is an hour away,” retirement expert Kerry Hannon said in a press release email. “You’re going to have to be helicoptered or transported to get to a medical center, so that should be an important consideration.”
Taxes are another consideration for retirement and include state income tax, sales tax, and real estate taxes.
“Get a real beat on what the tax picture would look like for you,” Ms. Hannon advised.
According to the Census Bureau, one in six people in the U.S. is aged 65 and over.