Best States for Retirement 2011

Richard Barrington

Also see the latest Best States to Retire feature

The MoneyRates.com ranking of the best--and worst--states for retirement is back.

Your best place to retire depends on highly personal factors. You care about proximity of friends and family, cultural and natural attractions or maybe the presence of a favorite professional sports team. While no single set of factors can capture the diversity of individual preferences, MoneyRates.com's data-based ranking can give you a place to start.

This year, we took input from our readers to determine how different ranking factors should be weighted. MoneyRates.com ran a poll asking readers how important four major factors--economic indicators, climate, life expectancy and crime rates--should be in the retirement location decision. The results of that poll formed the basis for this year's rankings.

Based on reader responses, economics determined 47 percent of a state's final score, climate accounted for 33 percent, life expectancy determined 12 percent and crime accounted for 8 percent. Here are the 10 states that came out on top.

KansasNo. 10: Kansas

Why it's in the top 10: Kansas is pretty average in three of four categories, but by scoring well in the category readers felt was most important--economics--it earned a place in the top 10.

Economic factors: Kansas tied for the 10th highest score in this category. The cost of living and unemployment in the state are both very low, which was enough to overcome a high tax burden.

Climate: Fittingly for a state near the middle of the country, Kansas had a climate score that was near the middle of the pack.

Life expectancy: The life expectancy of 77.3 years in Kansas is close to the median.

Crime: Kansas scored a little worse than average on crime, because both violent and property crime rates are slightly higher than in most states.

TennesseeNo. 9: Tennessee

Why it's in the top 10: After ranking in the bottom 10 in last year's study, Tennessee was a huge beneficiary of the new reader-weighted preferences. The state came out strong for economic factors and climate, which was enough to overcome a high crime rate and low life expectancy.

Economic factors: Tennessee had the eighth-best score for economic factors, largely on the strength of having the nation's lowest cost of living.

Climate: Tennessee's climate score is above-average.

Life expectancy: Tennessee's life expectancy of 75.1 years is one of the lowest in the nation.

Crime: The state has the third-highest violent crime rate in the U.S.

South DakotaNo. 8: South Dakota

Why it's in the top 10: A top score for low crime and the second-best score for economics placed South Dakota in the top 10 for the second consecutive year. The state ranked third last year.

Economic factors: South Dakota received an excellent score because of very low unemployment and tax rates.

Climate: This was the state's lone weak point--its climate was rated 10th-worst in the nation.

Life expectancy: At 77.7 years, life expectancy in South Dakota is slightly above median.

Crime: South Dakota got the best score out of all 50 states for its low crime rates.

MississippiNo. 7: Mississippi

Why it's in the top 10: Mississippi had high marks for its economic factors and climate.

Economic factors: Mississippi scored well with its low cost of living and the lowest tax burden in the nation. These factors offset the state's high unemployment.

Climate: Mississippi received a top-10 score for climate.

Life expectancy: This factor was a significant drag on the state's rankings: Its life expectancy of 73.6 is the lowest in the nation.

Crime: Mississippi's crime score was about average among the 50 states.

VirginiaNo. 6: Virginia

Why it's in the top 10: By scoring well in three out of four categories, Virginia repeats its No. 6 showing from last year.

Economic factors: Virgina scored well on economic factors, primarily its low unemployment rate.

Climate: Virginia's moderate climate earned it an above-average score in this category.

Life expectancy: Virginia's life expectancy of 76.8 years is about average.

Crime: Virginia enjoys some of the nation's lowest crime rates.



No. 5: Louisiana

Why it's in the top 10: Strong scores in the heavily weighted categories of economics and climate overcame dismal scores in life expectancy and crime.

Economic factors: Louisiana scored well because cost of living, unemployment and taxes are all below those of most states.

Climate: Louisiana's climate earned the third highest rating in the nation.

Life expectancy: Louisiana's weakest category: At 74.2 years, this is the second-lowest of any state.

Crime: This could be a red flag for some retirees, as Louisiana's violent and property crime rates are among the worst in the U.S.

IowaNo. 4: Iowa

Why it's in the top 10: Excellent scores in three out of four categories, including strong economic health, helped Iowa improve by one place from last year's No. 5 ranking.

Economic factors: Iowa tied for the third-best economic score among all states, thanks primarily to one of the lowest unemployment rates in the country.

Climate: This was the only category in which Iowa was below average.

Life expectancy: Iowa's life expectancy of 78.3 years is one of the nation's best.

Crime: This was another standout area for Iowa, which has crime rates rated among the 10 lowest overall.

OklahomaNo. 3: Oklahoma

Why it's in the top 10: By knocking the cover off the ball in economic factors, Oklahoma was able to overcome poor performance in the areas of life expectancy and crime.

Economic factors: Oklahoma got the best overall score for economics, because its cost of living, unemployment and tax burdens are all among the 10 lowest in the nation.

Climate: Oklahoma's score for climate was not spectacular but well above average.

Life expectancy: Oklahoma's life expectancy of 75.2 years is in the bottom 10.

Crime: Oklahoma scored well below average in this category, because of high violent and property crime rates.

KentuckyNo. 2: Kentucky

Why it's in the top 10: Though life expectancy is low, Kentucky scored above-average in all other categories. The Bluegrass State's economic factors make it attractive to seniors with fixed incomes.

Economic factors: Kentucky tied with Iowa for the third-best score in this category. Unemployment is a bit high, but cost of living and tax burdens are among the lowest in the U.S.

Climate: Kentucky enjoys a moderate climate, which helped it to an above-average score in this category.

Life expectancy: At 75.2, this is one of America's lowest, making life expectancy Kentucky's only below-average category.

Crime: Violent and property crime rates are both below average in Kentucky.

TexasNo. 1: Texas

Why it's the best state for retirement: Despite a high property crime rate, Texas outranked all other states with its outstanding scores for economic factors and climate.

Economic factors: Texas scored very well for economics, thanks to a low cost of living and low tax burden.

Climate: The climate for such a big state varies, but overall Texas received strong scores for its generally warm climate.

Life expectancy: At 76.7 years, life expectancy for Texans is a little below median.

Crime: The only real blemish for Texas, the high crime rate--especially the nation's highest rate of property crime--might scare off some retirees.

About the rankings

MoneyRates.com evaluated states based on four major categories:

  • Economics. This category included several factors. The state's cost of living is a key consideration for retirees who often have their wealth in conservative investments and savings accounts. Tax rates were also part of this ranking--both general income and retirement income tax rates, since many retirees have both. Unemployment was also included as an important indicator of the overall economic health of an area. With more and more seniors continuing to work at least part-time, this factor is a relevant consideration even when choosing a retirement destination.
  • Climate. There are warm-weather people and there are cold-weather people, but most seem to like moderation. A state's climate score was based on the deviation of monthly temperatures from 68 degrees. The lower the deviation, the higher the ranking for the state.
  • Life expectancy. While a number of factors, from genetics to lifelong habits, go into determining life expectancy, it is also an indicator of the health of an area's environment and the quality of the medical care available.
  • Crime. Both violent and property crimes were measured and ranked, and then those rankings were combined to come up with an overall crime rating.

In contrast to the best states for retirement, what are the states you might want to avoid? See our 10 worst states for retirement. Don't see your state among the best or worst? Find out where your state ranks in the full 50-state list of the MoneyRates.com Best States for Retirement.

You can also compare this list with the 2010 rankings.

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Grla 13 October 2012 at 5:20 am

Also, I just saw your comment about excluding property taxes from your consideration of economic factors. What matters economically is the total tax burden retirees are going to have to pay. When you exclude property taxes you're excluding an important piece of the puzzle that makes your end result misleading. States that have lower income taxes often assess high property taxes to make up for it, and property taxes don't take into account a retiree's ability to pay, unless the state also offers a senior exemption. A few years ago the state next to mine had no income tax, but their property taxes averaged double what ours were for equivalent homes. Meanwhile the fair market value of their homes was significantly lower, due to the high property tax burden.

Grla 13 October 2012 at 4:56 am

You need to have two lists -- one for those who prefer year round warm weather, and a second one for those of us who like living in a place that has four seasons. I wouldn't want to live in several of the places you gave extra pints for climate precisely because of the oppressive climate, especially during the summer.

WallyC 22 August 2012 at 11:49 am

I second the notion regarding the inclusion of property and sales tax in any economic comparisons. Property taxes in TX can be as high as the mortgage note for principle and interest. You can eventually pay off a mortgage, but taxes never go away and continue to rise with increased tax rates and/or property valuations. Utilities, food, services (e.g. cable) are also significant economic cost factors. Bottom line is the methodology used to produce this list is woefully inadequate. I could pick a different subset of the criteria to determine economic viability and produce a completely different list. A more extensive list of economic factors must be included for the list to have any merit.

Sidney 23 July 2012 at 11:05 am

This is a joke, right? Let Mr. Barrington go to Texas, Kentucky, or Oklahoma, I prefer civilization.

El Gato 16 June 2012 at 9:27 am

One thing not mentioned, is the warmer states also have the highest incidence of insects like termites, mosquitoes, etc. Also, the mid-America states have their tornado watches, warnings, etc. Maybe some combination of states, like living in Washington, which has no income tax, and shopping in Oregon which has no sales tax.

MitchG 30 April 2012 at 12:59 pm

Texas is best and Washington is in bottom ten? I recently moved back to WA from TX. Neither have state income tax. TX property tax is around 3.5% in metro areas. WA property tax is 1.2%. In TX I was paying $500+/month for electricity cost - mainly heating and cooling. In WA I pay average $150 year round. Party the mild climate but also WA electricity rate is one of the cheapest in nation. House insurance in TX was $1800/yr vs. $650/yr in WA. Who knows why? House value is nearly identical. Without a doubt crime rate is higher in TX and average lifespan is less. Maybe all those orange and red ozone alerts in the DFW metroplex.

Dude 31 March 2012 at 11:47 pm

By the way, you don't look at the best economy when retiring, you do that when you're young. When retiring you should look at hospitals, climate, taxes, and cost of living. (and life expectancy, of course)

Dude 31 March 2012 at 11:43 pm

The writer is upfront about saying most of the best places to retire are places that you'll die the youngest. Is this story just an April Fools joke?

Virginia 29 February 2012 at 7:30 pm

Why only the RED states?Thanks, but no thanks.

Richard Barrington 8 February 2012 at 6:48 am

Chuck:You are right, Tennessee had a huge turnaround on our list from 2010 to 2011. You can find an explanation in the story's section on Tennessee: we experimented with factor weightings based on a user poll, which dialed up the importance of economy and climate (two strong points for Tennessee), and dialed down the importance of crime and life expectancy (two very weak points for the state).I'm not sure whether we will use the same weighting approach this year. There's a trade-off between incorporating feedback and giving clear guidance. What do you think?

chuck willis 2 February 2012 at 1:52 am

I just dont understand how they do there rankings. I live in Tennessee about 45minutes from Knoxville. I was looking to see where Tennessee ranked for retirement last year and we were at almost complete bottom Top 10 on worst States. Then saw 2011 rankings and figured ill check Top 10 best places to retire and to my surprise somehow we go from 7th or 8th worst to the 9th best state to retire. What i dont understand is how can you go from bottom to top in 1 year. Like i said i live here and cant tell its any better here. Im not complaining i like living here people are nice for the most part. Crimes not big problem were i live. I saw were worst in nation for crime. Luckily my end of states not to bad. Well ill quit blabbing just got thrown for loop seeing huge turn around

Richard Barrington 8 November 2011 at 5:13 am

David: We did address taxes, factoring in both income taxes and special treatment for retirement income. We did not, however, factor in property taxes, since this was a state-wide analysis and property taxes vary from town to town.

David Sadler 5 October 2011 at 1:42 pm

You can not be serious about ranking states for retirement without considering taxes and especially property taxes.David Sadler http://www.minnesotansforafairpropertytax.org/

Ron 3 October 2011 at 3:22 pm

This may be soon changing for retirees. The legislature effectively eliminated COLAs for state retirees last session, which hurts many financially. The state income tax is targeted for elimination which sounds good on one hand, but it will cancel out retirees' tax breaks for Social Security, etc. Consequently retirees would likely be paying more taxes under a new system, especially if property taxes go up.