Best states to retire: a full breakdown
Thinking about moving in retirement? Whether you’re looking for quality of life, better weather, fewer taxes, or states where your money stretches the furthest, these are the best states to retire in 2025.
Summary
Florida is the top state to retire in 2025, though retirees should be careful in selecting an area that’s still affordable when considering the cost of homeowners insurance.
Top states for affordability include Alabama, South Carolina, and Delaware, which is helpful for retirees on a fixed income or who rely on Social Security income.
Top states for the lowest tax burden include Alaska, Wyoming, and Tennessee.
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Best states to retire in 2025
The best states to retire include Florida, Colorado, Virginia, Delaware, and Wyoming. These states offer a balance of factors important to retirees, such as affordability, healthcare, and quality of life.
Florida: In Florida, you’ll find sandy beaches, low taxes, and a bevy of activities fit for retirees. You’ll want to consider high homeowners’ insurance costs before deciding to move to Florida.
Colorado is known for its sunshine, mountains, and active lifestyle. It also offers several tax advantages.
Virginia: Although the cost of living in Virginia is high, the state is taxpayer-friendly and has good healthcare services.
Delaware: Regularly ranking among the best states for retirees, it offers good healthcare services, is close to major cities, and has retiree-friendly tax policies, including no state or local sales tax or no tax on Social Security benefits.
Wyoming: This western state offers retirees a low cost of living and is also tax-friendly, as it is one of the few states that does not levy state income tax.
Worst states to retire in 2025
While there is much subjectivity about which states are the worst for retirement, some have high costs or a higher quality of life than others.
As per WalletHub’s analysis, these are the bottom states for retirement.
Kentucky
New Jersey
Mississippi
Rhode Island
Oklahoma
Louisiana
New York
Washington
Arkansas
Illinois
What is the best state to retire on a fixed income?
If you’re on a fixed income, you’re probably worried about making your retirement income stretch, making affordability your number one factor.
A fixed income from pension, inheritance, or Social Security offers little to no flexibility regarding the amount you get each month.
Therefore, you need a state where housing markets aren't volatile, and the cost of living isn't too high (so you can still cover unexpected expenses).
These are the top states to consider when retiring on a fixed income.
Alabama
South Carolina
Delaware
Florida
West Virginia
Tennessee
Wyoming
Nevada
Idaho
Georgia
What is the best state to retire in for taxes?
If you’re looking to pay fewer taxes, especially if you have a traditional retirement account where distributions are taxed as income, you’ll want to look at states with a lower tax burden.
A low tax burden is a comprehensive assessment of all the taxes in a state, including individual income taxes, corporate taxes, property taxes, general sales taxes, excise taxes, estate or inheritance taxes, and more.
The nonprofit Tax Foundation analyzed U.S. Census Bureau data and found that the following states have the lowest tax burdens in the US:
| Rank | State | State-local effective tax rate | State-local tax burden per capita |
|---|---|---|---|
| Rank | State | State-local effective tax rate | State-local tax burden per capita |
| 1 | Alaska | 4.60% | $2,943 |
| 2 | Wyoming | 7.50% | $4,691 |
| 3 | Tennessee | 7.60% | $4,036 |
| 4 | South Dakota | 8.40% | $5,196 |
| 5 | Michigan | 8.60% | $4,720 |
| 6 | Texas | 9% | $4,994 |
| 7 | North Dakota | 9% | $5,403 |
| 8 | Georgia | 9% | $4,862 |
| 9 | South Carolina | 8.90% | $4,596 |
| 10 | Oklahoma | 9.00% | $4,527 |
(Source: Tax Foundation)
States with the highest tax burden include the following:
| Rank | State | State-local effective tax rate | State-local tax burden per capita |
|---|---|---|---|
| Rank | State | State-local effective tax rate | State-local tax burden per capita |
| 1 | New York | 15.90% | $12,083 |
| 2 | Connecticut | 15.40% | $12,151 |
| 3 | Hawaii | 14.10% | $8,410 |
| 4 | Vermont | 13.60% | $7,958 |
| 5 | California | 13.50% | $10,167 |
| 6 | New Jersey | 13% | $9,648 |
| 7 | Illinois | 13% | $8,390 |
| 8 | Virginia | 13% | $7,979 |
| 9 | Delaware | 12.40% | $7,170 |
| 10 | Maine | 12.40% | $6,906 |
(Source: Tax Foundation)
What is the best state to retire on Social Security?
If the bulk of your projected retirement income is expected to come from Social Security, you’ll want to find somewhere that offers tax breaks on Social Security Income (SSI) and a low cost of living.
Fortunately, most states do not tax Social Security as income. Those that do generally have exemptions, deductions, income caps, or age limits that reduce the amount paid on SSI.
Here’s a breakdown of how states treat SSI.
Combine that with an area that offers a low cost of living, and your Social Security income is likely to go much further.
States with the lowest cost of living are largely located in the Midwest and the South, including West Virginia, Kansas, Mississippi, Oklahoma, and Alabama, according to the Missouri Economic and Research Center (MERIC). An index of 100 represents the average cost of living in the US.
| Rank | State | Index |
|---|---|---|
| Rank | State | Index |
| 1 | West Virginia | 84.8 |
| 2 | Kansas | 86.7 |
| 3 | Mississippi | 87.5 |
| 4 | Oklahoma | 87.9 |
| 5 | Alabama | 88.8 |
| 6 | Missouri | 89 |
| 7 | Arkansas | 89 |
| 8 | Tennessee | 90 |
| 9 | Iowa | 90.4 |
| 10 | Indiana | 91.3 |
States with the highest cost of living include the following:
| Rank | State | Index |
|---|---|---|
| Rank | State | Index |
| 1 | Hawaii | 184.6 |
| 2 | Massachusetts | 146.9 |
| 3 | California | 144.7 |
| 4 | District of Columbia | 138.1 |
| 5 | New York | 123.4 |
| 6 | Alaska | 123.4 |
| 7 | New Jersey | 114.8 |
| 8 | Vermont | 114.1 |
| 9 | Washington | 113.6 |
| 10 | Maine | 113.5 |
When it comes to choosing where to retire, finding a balance between quality of life and cost of living means your Social Security dollars can go further.
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Content Writer
Alene Laney is an award-winning journalist for Unbiased, where she breaks down financial topics related to retirement, investing, and banking. She specializes in helping readers make the best decisions for their money with long-form content for brands and consumer publications.