While the best state to retire in the U.S. is also one of the smallest in the country, the worst state to retire is the largest.
Alaska ranks as the worst state in the U.S. to retire for the third year in a row, according to Bankrate’s study of the best states to retire in 2024.
If you’re looking for space to spread out during retirement, Alaska is the largest U.S. state by land area. However, it state ranked poorly across a number of Bankrate’s measurements.
To compile its list of the best and worst places to retire in the U.S., Bankrate ranked all 50 states across five weighted categories:
- Affordability (40%): Analyzes factors such as local and state sales taxes, cost of living and average annual property taxes
- Overall wellbeing (25%): Includes factors such as the number of adults over 62 per 100,000 residents and access to food and health care
- Quality and cost of health care (20%): Looks at factors such as the cost of health care at the state level and the performance of each state’s health system
- Weather (10%): Evaluates data on factors such as a state’s average annual temperature and average number of tornado strikes, earthquakes and hurricane landfalls
- Crime (5%): Examines factors such as the amount of property crimes and violent crimes per 100,000 residents
Bankrate analyzed datasets from a number of sources, including the Council for Community and Economic Research, the U.S. Census Bureau, the Tax Foundation and the National Oceanic and Atmospheric Administration.
Here are the 10 worst states to retire, according to Bankrate.
Notably, Alaska ranks last in the weather category. Although temperatures in Alaska can range from 45 degrees to 75 degrees Fahrenheit in the summer, they can sink as low as negative 10 degrees Fahrenheit in the winter.
Alaska can also be an expensive place to live, especially for retirees with a fixed income. On average, the cost of living in Alaska is about 30% higher than the rest of the country, according to RentCafe. Housing costs are about 17% higher than the national average and utilities and health-care expenses are both nearly 50% higher.
On the upside, Alaska can be a very tax-friendly location for retirees. The state doesn’t have income tax, estate taxes or inheritance taxes and doesn’t tax pension payments or retirement benefits from Social Security.
DON’T MISS: Achieve Financial Wellness: Be Happier, Wealthier & More Financially Secure
Lack of affordability appears to be a common thread among the other low-ranking states on the list, which include New York, Washington and California — all known for being relatively pricey.
However, just because a state has a higher cost of living doesn’t necessarily mean you should write it off as a potential retirement destination. You may just need to plan to set aside more money for retirement than you would if you were planning to retire somewhere less expensive.
CNBC Make It’s retirement calculator can help you estimate how much you’ll need to save for retirement based on factors like your current age, savings, income and when you’d like to stop working.
And while living costs can be a key determinant in deciding where you may want to retire in the future, it’s also good to keep other non-financial aspects in mind. For example, access to social and community-building activities is an important, but often overlooked, consideration for retirees, according to Bankrate.
“Having that sense of community and human connection is huge to healthy aging,” Kerry Hannon, a retirement expert and Author of “In Control at 50+: How to Succeed in the New World of Work,” says in Bankrate’s study.
“Isolation and loneliness are not something you want to move toward, so look for your community,” she says.
Want to stop worrying about money? Sign up for CNBC’s new online course Achieve Financial Wellness: Be Happier, Wealthier & More Financially Secure. We’ll teach you the psychology of money, how to manage stress and create healthy habits, and simple ways to boost your savings, get out of debt and invest for the future. Start today and use code EARLYBIRD for an introductory discount of 30% off through September 2, 2024.
Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.
