Is Dallas a good place to retire?
With a score of 100.2 on the BestPlaces Cost of Living Index, Dallas ranks 0.2% higher than the US average and 6.4% higher than the Texas average.
With the total cost of housing, groceries, transportation, healthcare, and taxes being almost on a par with the national average, year-round events and attractions, and the tax-friendliness of the Lone Star state, retiring to Dallas could be a great decision.
Of course, it’s important to remember that you will pay more to live in certain areas than in others, and your other spending and lifestyle choices will also impact your finances during retirement.
What age can you retire in Dallas?
There is no legally mandated retirement age in Texas. However, there are a few age-related considerations that might make you wait a few more years before retiring in Dallas:
- Social Security benefits: You can start receiving benefits when you turn 62 years old. However, delaying them can lead to an increase in your monthly payment size.
- Medicare eligibility: Regardless of your retirement status, Medicare eligibility begins at age 65.
- Age discrimination is illegal: According to the law, employers may not discriminate against job applicants or employees based on age.
- Retirement savings: Most financial experts recommend saving at least 15% of your income for retirement, which makes it important for you to start saving for retirement as early as possible. Take a look at the average retirement savings in the US here.
What are the pros and cons of retiring in Dallas?
Whether Dallas is a good place to retire or a bad place to retire depends on what you're optimizing for. It offers tax-friendly rules, low housing costs, and warm weather, but also real tradeoffs, like a large, car-dependent metro and a higher-than-average crime rate. Here are the full pros and cons of retiring in Dallas.
Pros of retiring in Dallas:
- A tax-friendly location: The state of Texas does not charge state income tax, so retirement benefits and post-retirement income go untaxed. Groceries, prescription drugs, and over-the-counter medication are also exempt from sales tax.
- Low housing prices: Ample available land keeps housing prices lower than in comparable cities.
- Homestead exemption: At least $25,000 of your property's appraised value is exempt from tax on your principal residence, plus an additional $10,000 if you're 65 or older.
- Hot summers and mild winters: Average daily highs stay below 64°F in winter, a draw if you're not a fan of cold weather.
- Art and culture scene: A thriving scene with many galleries, theaters, and opera houses.
Cons of retiring in Dallas:
- Getting around: The Dallas-Fort Worth area is vast, and getting around without your own vehicle can be frustrating despite reliable public transportation.
- Crime rate: Dallas scores 37 on the violent crime rate index (1 to 100 scale), above the national average of 22.
- High sales and sin taxes: Non-exempt goods and services carry a roughly 8.2% sales tax, on top of separate tobacco and alcohol duties.
Best places to retire in Dallas
Here are some top retirement destinations in and around Dallas:
- Richardson: Ranked by Niche in 2024 as the 14th best city to retire in America. Richardson offers affordable housing, excellent golf courses, and year-round events.
- Southlake: About 30 miles from downtown Dallas, with an outdoor mall, parks, restaurants, and golf clubs close to DFW International Airport.
- Rockwall: A lakeside suburb on Lake Ray Hubbard with varied housing styles, boating and fishing, and shops all within an hour of downtown Dallas.
- Fairview: Home to more than 55 retirement communities near Lake Lavon, with easy access to North Dallas via Highway 75.
- Plano: Offers extensive public parks, a vibrant arts scene, and more than 70 shopping centers.
Taxes in Dallas for Retirees
The Lone Star State is tax-friendly, so there's no state income tax. This means you won't be taxed at the state level on Social Security benefits, pension income, retirement account income, and all other types of retirement income (including if you work part-time after retiring in Dallas).
Although sales tax is in excess of 8% in Dallas, groceries and some medications are exempt. There are also exemptions and discounts on the 1.6% property tax for retirees whose main residence is the property they both own and live in. Texas also charges no estate or inheritance tax. If you smoke or drink, you'll be hit by a tobacco tax of $1.41 per pack of cigarettes and an 8.25% duty on alcoholic beverages.
Retiring in Dallas vs. Nearby States
Dallas offers major tax advantages over nearby states, particularly for retirees relying on pensions and retirement account withdrawals. However, neighboring states may offer lower housing or property costs. Here's how Dallas compares.
Dallas vs. Oklahoma
Both exempt Social Security, but Oklahoma taxes retirement withdrawals up to 4.75%, versus none in Texas. Its sales tax runs close to 9%, above Dallas's 8.25%, though property taxes are generally lower.
Oklahoma suits cheaper housing; Dallas suits tax-free retirement withdrawals.
Dallas vs. Louisiana
Both exempt Social Security, but Louisiana still charges a flat 3% income tax, versus none in Texas. Its sales tax averages 10.1%, the highest in the country, versus Dallas's 8.25%.
Louisiana suits tighter budgets; Dallas suits bigger 401(k) and IRA withdrawals.
Dallas vs. New Mexico
New Mexico only exempts Social Security below $100,000 (single) or $150,000 (joint), and taxes income up to 5.9%, both costlier than Texas. Its sales tax runs lower than Dallas's 8.25%, but its overall tax bite on retirees is heavier.
New Mexico suits lower-income retirees; Dallas suits bigger retirement account withdrawals.
Is Dallas the right place to retire?
Dallas suits retirees who want zero state income tax on retirement withdrawals, warm weather, and a big-city arts and culture scene. It's a tougher fit for those who want to avoid driving long distances or want a lower crime rate.
A financial advisor can help you weigh property and sales taxes against your own retirement goals before deciding if Dallas is right for you.
Frequently asked questions
Does Dallas tax Social Security?
No. Texas has no state income tax, so Social Security benefits go untaxed at the state level.
At what age can you retire in Dallas?
There's no state-set retirement age. Social Security benefits can start at 62, full benefits arrive at 66–67 depending on birth year, and Medicare eligibility begins at 65.
What's the best place to retire in Dallas?
It depends on your priorities: Richardson for affordability and golf, Southlake for amenities near the airport, Plano for arts and shopping.
Is Dallas a bad place to retire?
Not for most people. The main drawbacks are a car-dependent metro and an above-average crime rate, but neither outweighs the tax savings and low cost of living for most retirees.
Is Dallas tax-friendly for retirees?
Very. Texas has no state income tax, so Social Security, pensions, and retirement account withdrawals aren't taxed at the state level, though sales and property taxes run above average.