Worst States for Retirees

6 min read
Retired Couple

If you’re looking to make the most of your retirement money, avoid retiring in these states.

10. New Mexico

New Mexico
Source: Pixabay

Although New Mexico has a great culture, wonderful festivals, and delicious food, it’s not really the place you want to spend your later years. “New Mexico is a relatively poor state so prices for land and houses are low, as is the general cost of living, but this also means a relative paucity of amenities,” Quora commenter William Hembree said, according to an article published by MoneyWise. Not only that but Social Security, retirement account distributions and pension payouts are all taxed in New Mexico. And, here’s something else: the state ranks 38th in healthcare, 45th in quality of life, and 50th in highest property-crime rate.

9. Rhode Island

Point Judith Lighthouse Ri
Source: Pixabay

There are tons of reasons why you’d want to visit Rhode Island (hundreds of beaches, great food, great history, etc.) but hardly any reasons why you’d want to retire there. Living in Rhode Island can be quite expensive. In fact, rent for a one-bedroom apartment in downtown Providence starts at more than $1,500 a month! Not only that but medical costs are through the roof as well, despite having shoddy healthcare. Lastly, the weather there isn’t all that great either. “It is cold in the winter and gets very humid in the summer. Being such a small state it is impossible to get very far from the coast and flooding and hurricanes/noreasters is a problem,” Quora user Cole Rinne said, according to an article published by MoneyWise.

8. Washington

Holden Lake Washington
Source: Pixabay

Yes, Washington is the home of Starbucks. But, it’s also one of the most expensive states to live in. The median selling price for a home in metro Seattle is a whopping $528,800! Not only that but the weather there pretty much sucks. It’s rainy and cloudy all the time. And, “sunrise is around 8 a.m. and sunset is before 5 p.m.,… so it just feels like perpetual night for three or four months,” Quora contributor Dyonysos Larson wrote.

On the plus side, the state doesn’t levy a personal income tax on its residents. That means that your Social Security benefits, 401(k), IRA or pension income won’t be taxed either. Also, there’s no inheritance tax. Unfortunately, Washington does have an estate tax.

7. Maryland

Baltimore Inner Harbor Md
Source: Pixabay

According to a list compiled last May by MoneyWise magazine, Maryland is the worst state for retirees. And, its governor agrees: “I didn’t see the poll but I’ve been saying for a long time that we need to cut retirement tax, and I can’t convince the legislature of that. It is one of the things I have been talking about for four years and maybe this will get their attention,” Gov. Larry Hogan told FOX 5 DC.

So, just what is it about Maryland that makes it such a bad place for retirees? For one thing, the cost of living there is high. Taxes are also high. In fact, Maryland has one of the highest income-tax collection rates per capita, beating out the national average by more than $1,000. What’s more is that Maryland taxes IRA distributions and some income from 401k plans and pensions. It doesn’t, however, tax Social Security benefits.

6. New York

New York City
Source: Pixabay

By now you probably know that it is very expensive to live in New York. In fact, the state ranks 50th in affordability! Plus, New York residents pay the highest state and local taxes. And, this is precisely the reason why it is one of the worst states for retirees. But, perhaps all is not lost. If you wanted to retire here to enjoy all that the country’s most populous city, New York City a.k.a. the Big Apple, has to offer, you might want to consider spending your later years in neighboring New Jersey. Here’s what you’ll have to look forward to if you do:

-Several types of retirement income isn’t taxed (Social Security benefits, U.S. military pensions, military survivor’s benefit payments, life insurance proceeds, employee death benefits, etc.)
-Close proximity to the Big Apple

5. Kentucky

Source: Pixabay

According to Financial Advisor Magazine, Kentucky ranks 32nd in affordability, 46th in quality of life, and 48th in healthcare. In fact, because its grass gives off so much pollen, Kentucky is known as the allergy capital of the U.S. And, when it comes to the weather there, the humidity can be quite unbearable. Life moves at a slow pace in Kentucky, too — but perhaps not in the way you think. “If I want anybody to come out to, say, do some work on plumbing, I have to call on a Monday to perhaps get somebody to come out on a Friday or next Tuesday. It takes a month to get a doctor’s appointment and a week to ask for a refill,” Quora user Tiffany Bridgeman wrote, according to according to an article published by MoneyWise.

4. West Virginia

West Virginia
Source: Pixabay

Even though West Virginia has one of the highest percentages of residents 65 or older, it’s far from the ideal retirement place. One reason is because of healthcare. While healthcare is affordable in West Virginia, the state has some of the worst patient outcomes nationally. As a result, it ranks 39th for senior wellness. It also ranks 40th in quality of life. On the plus side, if you do decide to retire there, you won’t have to pay taxes on your Social Security benefits — after the three-year phaseout kicks in, that is.

3. Tennessee

Smoky Mountains Tn
Source: Pixabay

WalletHub ranks Tennessee at 48th for quality of life. It also ranks 46th in healthcare. What’s more is that FBI data shows that Tennessee is among the worst states for violent crime. So, as you can see, Tennessee definitely does not sound at all like an ideal place for retirement. But, if you insist on settling there anyway, there is a bit of good news. You won’t have to pay taxes on your 401(k), IRA, or pension income. And, your Social Security benefits will be tax-free, too.

2. Georgia

Atlanta Georgia
Source: Pixabay

The problem with Georgia is that most of its population is concentrated in the northern part of the state, around Atlanta. And, that can make it difficult to find things to do across much of the 59,000 square miles the state covers. Not only that but the weather there isn’t all that great either. It’s not out of the ordinary for Georgia residents to experience extreme temperatures, hurricanes, tornadoes, and blizzards.

On the plus side, the state has relatively low taxes. The average property tax there is $1,000 per $100,000 in home value.

1. Louisiana

New Orleans Louisiana
Source: Pixabay

While Louisiana is certainly a great place to visit (i.e. awesome people, food, music, culture, history, architecture, etc.), it’s not the best place to retire. For starters, sales tax in Louisiana can be as high as 11.45 percent. Another minus is that the quality of healthcare in the state is very poor, ranking 43rd in the nation. Louisiana also has a poor quality of life (rank: 44th) and a low life expectancy (rank: 47th). Perhaps this low life expectancy is due to the fact that the state also has the highest murder rate in the nation!

Another thing to keep in mind is that Louisiana doesn’t have the best weather. It’s scorching hot for much of the year, and the area is prone to being hit by hurricanes. I mean, who could forget Hurricane Katrina?


Interested in knowing the best states to make the most of your retirement funds? Here is a list of states that don’t tax retirees’ income.