How to Decide Where to Retire

Where you live now might not be where you end up retiring. With today’s increasingly connected world, it’s easier than ever to move for retirement while still staying in touch with your friends and family. And some places can help your savings last longer.

There is a lot to consider before you decide where to live during retirement: your savings and investments, monthly income, family, friends, legacy, work options, weather, interests, health, and a variety of other factors. As you determine where you want to end up, consider these factors:

Is the State Tax-Friendly?

An important issue for many people during retirement is cost of living.

There is little to be done about federal taxes. However, you can choose to live in a state with retiree-friendly tax laws. According to, some states exempt Social Security benefits from state taxes (as well as at least a portion of other retirement income, such as pensions.)

However, other states tax Social Security benefits up to 85%, with little to no exemptions for other retirement income.

The Most Tax-Friendly States

Alaska, Arizona, Delaware, Florida, Georgia, Louisiana, Mississippi, Nevada, South Dakota, and Wyoming.

The Least Tax-Friendly States

California, Connecticut, Minnesota, Montana, Nebraska, New Jersey, New York, Oregon, Rhode Island, and Vermont.

Is the State Affordable?

Cost of living can vary widely between states. Between housing costs, food, gas, and utilities, your daily expenses have a major impact on the affordability of a state.

Forbes assessed which cities in the United States were the most affordable, finding that many of the least expensive cities were in the South and Midwest. U.S. News then examined the most expensive cities, based on expensive housing, high taxes, and pricey healthcare. Both lists are below.

Of course, America is not your only option for retirement. If you pay attention to the news, you may have heard some Americans are retiring overseas where the cost of living is more reasonable than it is in some parts of the United States.

Most Affordable Cities in America (in order)

Birmingham, AL; Knoxville, TN; Buffalo, NY; Oklahoma City, OK; Cincinnati, OH; Memphis, TN; St. Louis, MO; Dayton, OH; Indianapolis, IN; and Columbus, OH and Detroit, MI tied for the number 10 spot.

Least Affordable Cities in America

Bridgeport, CT; Honolulu, HI; Los Angeles, San Diego, Oxnard, San Francisco, and San Jose in California; New York City and Poughkeepsie in New York; and Washington, D.C.

Most Affordable Cities Overseas (including Average Living Expenses)

Carcassonne, France ($1,750/month); Cayo, Belize ($1,100/month); Chiang Rai, Thailand ($750/month); Dumaguete, Philippines ($1,000/month); Granada, Nicaragua ($1,300/month); Ipoh, Malaysia ($897/month); Loja, Ecuador ($ 1,100/month); Nha Trang, Vietnam ($650); Tralee, Ireland ($1,500/month).

Do People in the Community Share My Interests?

If you want to spend your retirement (which could last for many, many years) in a community of people who enjoy the same things you do, there are lots of options.

There are communities that cater to every interest, including art, old cars, boats, motorcycles, and more. There are also facilities for people from specific backgrounds, careers, or affiliations. In addition, residents of university-based retirement communities live near a college campus, take classes, and have access to skilled nursing care.

Do my Friends and Family Live Nearby?

Finally, your decision on where to retire may depend on where your friends and family end up.

It’s important to maintain social bonds throughout retirement, but much harder to do so now that you’re not seeing people at work every day. By living in the same city as your friends and family, you’ll have a built-in support system from day one.

You might even look into cohousing. Often, cohousing includes a blend of homes and shared facilities such as a common house, community kitchen, shared dining area, recreational facilities, and children’s spaces. The idea started in Denmark and has spread to other countries.

If you’re still searching for your “best place to retire,” take the time to consider your priorities. Once you have decided what is most important to you, you can research locations and housing options.

Make sure you’re financially ready for any location you choose. Contact BP Financial today to discuss your financial goals.