For decades, retirees have been flocking to Florida to spend their golden years in the sun in a state where the cost of living is known to be relatively affordable. But a new survey by Bankrate has revealed that the best state to retire in is actually a much smaller, cooler place on the East Coast—Delaware.
The First State, though pricier than many others, has taken top spot in the New York-based financial services company's annual ranking of the best states to retire in the country this year. In 2023, it was second, after Iowa, which has slipped to ninth place this year due to the recent rise in the cost of living, property taxes and homeowner insurance costs.
Bankrate analyzed dozens of data points for each U.S. state, excluding the District of Columbia, ranking states based on five categories: affordability (weighted for 40 percent of each state's score), overall well-being (25 percent), the cost and quality of health care (20 percent), weather (10 percent) and crime rates (5 percent).
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"The First State isn't typically thought of as a retirement haven, but it has many strong selling points for retirees," Bankrate analyst Alex Gailey wrote.
Delaware offers high-quality healthcare, a light tax burden, affordable homeowner insurance (unlike Florida, where premiums have skyrocketed), and good weather. There's also a good amount of racial and ethnic diversity in the state, which has a high share of residents who are 62 and older compared to its population.
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"Earthquakes, tornados and hurricanes are also rare, and the climate is temperate," Gailey wrote.
The state isn't exactly a perfect retirement haven though: it didn't score as well on crime or cost of living. But while Delaware's cost of living is higher than the national average, the state has no state or local sales tax and it doesn't require residents to pay income tax on Social Security benefits, boosting its overall affordability.
With the exception of Delaware, the best states to retire in the country are all in the Midwest and South, where affordability is usually higher. These are the top five states to retire in the U.S.:
- Delaware
- West Virginia
- Georgia
- South Carolina
- Missouri
Last year, the top five looked slightly different and included Iowa, Delaware, West Virginia, Missouri and Mississippi. West Virginia took second place thanks to its low cost of living, low property taxes and affordable homeowner insurance, though it ranked poorly for quality and cost of health care.
Georgia, which was only 15th in the 2023 annual ranking, shot up to third place thanks to the lower cost of living and a drop in homeowner-insurance premiums over the past year. However, overall well-being and crime scores remain poor in the Peach State.
South Carolina was only 19th last year, but shot up to fourth thanks to increased affordability and weather; it suffered in one crucial category: crime.
Missouri, despite ranking poorly for quality of health care, weather, crime and overall well-being "shines for affordability," according to the Bankrate report, and took fifth place.
These are the five worst states to retire in the U.S.:
- Alaska
- New York
- Washington
- California
- North Dakota
For the second year in a row, Alaska was labeled the worst state in the country to retire in, "dragged down by back-of-the-pack scores in affordability and weather," Gailey wrote. Last year, the bottom five also included New York, California, Washington and Massachusetts.
What all these states in the Northeast and West have in common is their high cost of living—a challenge to retirees who are already struggling to keep up with their bills and see their retirement savings start to dwindle.
"The reality is that most Americans feel behind on saving for retirement, which means affordability is critical," said Gailey. "A move to a more affordable location could be an effective way for soon-to-be retirees to stretch their retirement savings in this economy. If you're behind on savings and retirement is just a few years away, now's the time to play catch-up."
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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