Congrats! Congratulations! Now the question is, where should you retire? While there are certain states that offer better retirement living and financial benefits, the best place to retire is dependent on your priorities.
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Personal Capital's Retirement Planner is a great tool to help you understand the potential impact of retirement in different states. These online tools allow you to anticipate large expenses, such as buying a house or sending your children through college, run different scenarios and create a retirement spending plan.
This calculator can help you compare your retirement savings to other people in your state as you think about making a major move.
How to Choose the Best State for Retirement
Your unique financial situation and priorities will determine the best decision for you. These are important considerations to make when you're looking for the best retirement locations.
Quality of Life
This is the most personal consideration because everyone has their own definition of what makes life great. It may be a way to soak up the city's cultural riches. It may also mean being alone or surrounded by nature.
Are you more drawn to the tranquility of a small beach town than the bustle and bustle of a large city? Do you want to explore new communities and make new friends? Or would you prefer to build deeper relationships with those you already know, or be closer to your family? These and many other factors will impact your quality of life.
Housing Prices
Since the outbreak of the pandemic, housing costs have been rising almost everywhere. However, there are still some areas that started with high rent and home prices. They've risen even more. Your budget will be affected more by where and how you plan to purchase or rent a house in retirement.
Healthcare Costs
The location is only one of many factors that can influence the cost of healthcare for retirees. HealthView Services' 2021 report revealed that the majority of retirees can expect to see their total retirement healthcare expenses fall between $156,208 – $1 million.
Medicare Part D premiums and Medicare Advantage plans, Medigap premiums and out-of pocket spending are some of the costs that can vary from one state to another. According to the report, Massachusetts and Maryland are more costly in these categories while Hawaii and New Mexico are much less expensive with some costs close to 50% lower.
Taxes
While this is an important consideration all through our lives, it can be a significant factor in retirement. You may need to pay taxes depending on how much retirement income you have. While federal income tax is an established fact, living in a state that has a high income tax rate may leave you with less income.
Cost of Living
The state cost of living encompasses healthcare, housing, taxes and insurance. It also includes the cost of daily goods, such as food and transport. It is clear that certain places in the U.S. can be more expensive than others. This should be your first consideration if you want to reduce retirement costs.
Weather
Do you want all-year sunshine? Do you prefer to see the seasons all year? Perhaps two homes are better suited to your snowbird tendencies. No matter what your preference may be, it is important to do your research. Climate change will have a significant impact on retirement destinations like Florida. It is becoming more expensive to insure homes in states that have higher climate risk factors. Make sure you factor this into your plan.
Learn More: 7 Essential Steps to Retirement Planning
These are the Best States to Retire In 2022
We came up with an easy formula to find the right state to retire in: Follow the money.
Millionaires are more likely to have the opportunity to live in areas that offer the best lifestyles. While anyone can go broke if they spend too much, it is possible to have more choices about where to live.
Let's take a look at the states that have the highest number of millionaires to determine the best state for retiring. Then, we can compare those states with the lowest taxes with the states with the highest. This allows us to take into account both lifestyle and financial considerations. This is a fun way to have some fun with retirement planning.
According to our formula, the top two states in which to retire are — please roll your eyes — Alaska and New Hampshire. Washington, Virginia, Delaware and Virginia are all among the top 20 most popular states to retire in, according to both lists.
It is interesting to note that states with low taxes like South Dakota or Texas are not in the top 10 or 20 states with the highest number of millionaires. These states have such great tax benefits that we will be watching to see if they make it on the list.
The surprise of the shortlist is Delaware, which is not a state that you would normally think of when it came to millionaires. Wyoming and Florida are also on the list but they did not make the cut due to their low taxes and great lifestyles. Florida is known for its beachfront lifestyle, but if you have ever visited Jackson Hole, Wyoming will be your first choice.
Which States have the lowest tax burden?
Instead of looking at taxes rates, which may vary depending on your particular circumstances, the "tax burden” number measures the percentage of personal income you would pay for state and local taxes.
We used Wallethub's list to determine the tax burden. It compares 50 states against three types of state taxes in 2022: individual income taxes, property taxes, and sales & exise taxes.
| Rank | State | Total Tax Burden | Property Tax Burden | Individual Income Tax Burden | Total Sales & Excise Tax Burden |
| 1 | Alaska | 5.06% | 3.54% | 0.00% | 1.52% |
| 2 | Tennessee | 5.75% | 1.71% | 0.06% | 3.98% |
| 3 | Delaware | 6.22% | 1.77% | 3.28% | 1.17% |
| 4 | Wyoming | 6.32% | 3.32% | 0.00% | 3.00% |
| 5 | New Hampshire | 6.41% | 5.11% | 0.14% | 1.16% |
| 6 | Florida | 6.64% | 2.77% | 0.00% | 3.87% |
| 7 | South Dakota | 7.12% | 2.84% | 0.00% | 4.28% |
| 8 | Montana | 7.39% | 3.45% | 2.66% | 1.28% |
| 9 | Alabama | 7.41% | 1.41% | 2.00% | 4.00% |
| 10 | Oklahoma | 7.47% | 1.74% | 1.90% | 3.38% |
Which States have the Most Millionaires?
Let's now look at the 10 states with the highest number of millionaires per household as of 2019. This is the most recent data.
| Rank | State | Millionaire Households: % |
| 1 | New Jersey | 9.76% |
| 2 | Maryland | 9.72% |
| 3 | Connecticut | 9.44% |
| 4 | Massachusetts | 9.38% |
| 5 | Hawaii | 9.20% |
| 6 | California | 8.51% |
| 7 | New Hampshire | 8.47% |
| 8 | Virginia | 8.31% |
| 9 | Alaska | 8.18% |
| 10 | Washington | 7.85% |
Is it financially wise to move in retirement?
There are nine states in the United States that do not have income taxes for those who wish to retire. These include Alaska, Florida (Florida), Nevada, New Hampshire and South Dakota. Relocating is financially smart for many retired people who have the financial means to do so, especially if their home states have high taxes such as New York or California.
Continue reading:Average Retirement Savings per State
The Best Places to Retire in Each State
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What about Retirement Lifestyle?
In retirement, money is not everything. If you don't have the means to spend your money on a lifestyle you love, like being outdoors and able to go to fine dinners, shows, or museums, then it's not worth it. Many people won't have unlimited money when they reach retirement age so it may be necessary to make sacrifices or relocate.
Since it is subjective, it is impossible to determine which state offers the best retirement lifestyle. Do you prefer the big cities? Do you prefer quieter towns? Perhaps you prefer a quiet retreat in the country? It all depends on you.
Our Take
It's not clear which state is best for retirement. Everybody is biased. My home state of Hawaii is my dream based on its lifestyle. However, Colorado, where we've lived for almost two decades, offers many of the same lifestyle perks with lower overall cost. Decisions!
This list is purely for entertainment, but it can also be a great place to start if your goal is to move to a lower tax state. Check out our Retirement Planner tool to determine if moving would be financially beneficial. It allows you to plan scenarios to assess how your retirement prospects will change.
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Frequently Asked Questions
What Is a Precious Metal IRA?
An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These are “precious metals” because they are hard to find, and therefore very valuable. They are great investments for your money, and they can protect you from inflation or economic instability.
Precious metals often refer to themselves as “bullion.” Bullion refers to the actual physical metal itself.
You can buy bullion through various channels, including online retailers, large coin dealers, and some grocery stores.
With a precious metal IRA, you invest in bullion directly rather than purchasing shares of stock. You'll get dividends each year.
Unlike regular IRAs, precious metal IRAs don't require paperwork or annual fees. You pay only a small percentage of your gains tax. Additionally, you have access to your funds at no cost whenever you need them.
What precious metals could you invest in to retire?
These precious metals are among the most attractive investments. They're both easy to buy and sell and have been around forever. They are a great way to diversify your portfolio.
Gold: The oldest form of currency known to man is gold. It's also very safe and stable. Because of this, it is considered a great way of preserving wealth during times when there are uncertainties.
Silver: The popularity of silver has always been a concern for investors. It is an excellent choice for investors who wish to avoid volatility. Silver, unlike gold, tends not to go down but up.
Platinium is another precious metal that is becoming increasingly popular. It's durable and resists corrosion, just like gold and silver. It is, however, more expensive than its competitors.
Rhodium: Rhodium can be used in catalytic convertors. It is also used in jewelry-making. It is also quite affordable compared with other types of precious metals.
Palladium – Palladium is an alternative to platinum that's more common but less scarce. It's also much more affordable. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
Should You Get Gold?
Gold was a safe investment option for those who were in financial turmoil. Many people are shifting away from traditional investments like bonds or stocks to instead look toward precious metals such gold.
Although gold prices have shown an upward trend in recent years, they are still relatively low when compared to other commodities like oil and silver.
This could be changing, according to some experts. They believe gold prices could increase dramatically if there is another global financial crises.
They also point out that gold is becoming popular because of its perceived value and potential return.
These are some things you should consider when considering gold investing.
- First, consider whether or not you need the money you're saving for retirement. It is possible to save for retirement while still investing your gold savings. However, when you retire at age 65, gold can provide additional protection.
- Second, you need to be clear about what you are buying before you decide to buy gold. Each type offers varying levels and levels of security.
- Don't forget that gold does not offer the same safety level as a bank accounts. You may lose your gold coins and never be able to recover them.
Don't buy gold unless you have done your research. Make sure to protect any gold you already own.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
External Links
cftc.gov
finance.yahoo.com
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's not exactly legal – WSJ
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
The best way to buy gold (or silver) online
Before you can buy gold, it is important to understand its workings. It is a precious metal that is very similar to platinum. It's rare and often used to make money due its resistance and durability to corrosion. It is hard to use, so most people prefer jewelry made of it to real bars of gold.
There are two types today of gold coins. One is legal tender while the other is bullion. Legal tender coins are minted for circulation in a country and usually include denominations like $1, $5, $10, etc.
Bullion coins should only be used for investment purposes. Inflation can cause their value to increase.
They are not exchangeable in any currency exchange system. A person can buy 100 grams of gold for $100. Every dollar spent on gold purchases, the buyer receives one gram of gold.
The next thing you should know when looking to buy gold is where to do it from. There are a few options if you wish to buy gold directly from a dealer. First off, you can go through your local coin shop. You could also look into eBay or other reputable websites. You might also consider buying gold from an online private seller.
Individuals selling gold at wholesale prices and retail prices are known as private sellers. When selling gold through private sellers, you pay a commission fee of 10% to 15% per transaction. That means you would get back less money from a private seller than from a coin shop or eBay. This option is often a great one for investors in gold, as it gives you greater control over the item's value.
Another way to buy gold is by investing in physical gold. Although physical gold is easier to store than paper certificates you will still need to ensure it is safe. To ensure that your physical gold remains safe, you need to secure it in an impenetrable container such as a vault or safety deposit box.
A bank or pawnshop can help you buy gold. A bank can give you a loan up to the amount you intend to invest in Gold. These are small businesses that let customers borrow money against the items they bring to them. Banks often charge higher interest rates then pawnshops.
A third way to buy gold? Simply ask someone else! Selling gold is also easy. Set up a simple account with GoldMoney.com and you will start receiving payments instantly.
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By: Paul Deer, CFP®
Title: 2022’s Best States to Retire in the U.S.
Sourced From: www.personalcapital.com/blog/retirement-planning/top-states-to-retire/
Published Date: Wed, 21 Sep 2022 14:00:27 +0000
