Retiring in Massachusetts: a complete guide
Learn what you need to know to navigate your retirement in Massachusetts. Or speak to an advisor by answering a few simple questions below.
Summary
Massachusetts is a popular retirement destination for many Americans seeking a rich and diverse environment with access to outdoor activities, cultural events, and a moderate climate.
According to data from the U.S. Census Bureau in 2020, Massachusetts had a population of approximately 7 million people, with over 16% of the population being over the age of 65, making it one of the top states with a large retirement population.
Before deciding where to retire, it's best to get expert financial advice to ensure you can afford the retirement you want. Unbiased connects you to a fiduciary financial advisor suited to your needs.
Where are the best places to retire in Massachusetts?
If Massachusetts is your chosen retirement state, here are some of the best places to retire:
How much money do you need to retire in Massachusetts?
Due to Massachusetts's high cost of living, retirees will need a substantial sum in savings to retire comfortably.
According to GoBankingRates, the personal finance website, retirees will need an estimated $85,571 annually to cover expenses.
The site also states that retirees need a minimum of $1,600,097 for 25 years of retirement and $1,922,038 for 30 years.
Massachusetts is one of the states with the highest amounts required, joining 15 other states where you’d need at least $1 million saved to retire.
These figures take into account annual expenses for housing, food, utilities, transportation and health care in each state for people 65 years or older, using data from the Bureau of Labor Statistics and the Missouri Economic Research and Information Center.
What are the pros and cons of retiring in Massachusetts?
Before deciding where to spend the rest of your life, you need to weigh up the pros and cons of moving to a new state or choosing to stay put.
Along with things like the cost of moving, proximity to family, and where you’ll live, here are some pros and cons specific to the state of Massachusetts you also need to consider:
The pros of retiring to Massachusetts:
Diverse environment: Massachusetts is known for its diversity, from its historic cities to its beautiful coastal towns. Retirees can enjoy living in a diverse environment that offers plenty of opportunities for exploration and cultural experiences.
Moderate climate: Massachusetts has a four-season climate, with mild summers and cold winters. This makes it an attractive destination for retirees who enjoy the changing seasons and want to avoid extreme weather conditions.
Outdoor activities: Massachusetts is home to numerous national parks, forests, and beaches, providing ample opportunities for outdoor activities such as hiking, camping, fishing, and boating.
Cultural scene: Massachusetts has a rich cultural scene, with numerous museums, galleries, and performing arts venues. The state hosts several festivals and events throughout the year, including the Boston Marathon, the Boston Pops Fireworks Spectacular, and the Salem Halloween Festival.
The cons of retiring to Massachusetts:
Cost of living: Massachusetts' cost of living is generally higher than the national average, which could be a concern for retirees on a fixed income. Housing and healthcare costs, in particular, are higher than in many other states.
Traffic: Massachusetts is known for its heavy traffic, particularly in and around the major cities of Boston, Worcester, and Springfield.
Natural disasters: Massachusetts is prone to natural disasters such as hurricanes, blizzards, and flooding, which could be a concern for retirees living in certain areas.
How much tax will I pay in Massachusetts?
When it comes to paying your taxes in Massachusetts, the state is seen as moderately friendly for retirees.
While withdraws from your retirement accounts, such as your 401(k) or IRA, are fully taxed, your Social Security payments are not taxed.
If you have a public pension, you will not be taxed. However, if you have a private pension, you will have to pay tax.
On top of these state taxes, you will also have to pay the relevant federal taxes.
Massachusetts does, however, have several tax breaks for seniors, including the Senior Circuit Breaker tax credit, which may allow you to claim a refundable credit on your personal state income tax return.
Additionally, if you are over 65, you are allowed a $700 exemption before the end of the year.
What age can you retire in Massachusetts?
Like many states, Massachusetts does not mandate a specific retirement age by law. This allows individuals to retire whenever they choose, provided they can financially support themselves.
However, there are several age-related benefits and considerations for retirees in Massachusetts:
Social Security benefits: You can start receiving Social Security benefits as early as age 62. However, delaying benefits increases your monthly payments. Full retirement age (FRA) ranges from 66 to 67, depending on your birth year. Delaying benefits beyond FRA can result in even higher monthly payments.
Medicare eligibility: Medicare eligibility begins at age 65, regardless of retirement status. If you retire before 65, you will need alternative healthcare coverage until you become eligible for Medicare.
Retirement savings: Regardless of retirement age, it is crucial to start saving for retirement as early as possible. Many financial experts recommend saving at least 15% of your income for retirement.
Get expert retirement advice
Massachusetts offers a range of retirement options, from historic cities to beautiful coastal towns. Retirees can enjoy a mild climate and a variety of recreational activities but should be prepared for a higher cost of living.
It's important to seek expert financial advice to weigh up all of the costs associated with retiring in Massachusetts, including property taxes, insurance, and living expenses, in order to make an informed decision about whether the state is the right choice for your retirement.
Unbiased can match you with a qualified financial advisor who can help you plan out your dream retirement. Answer a few simple questions here to get started.
Content writer
Kate has written for leading publications and blue chip companies over the last 20 years.