Cost of living : 12 percent below U.S. average
Population : 3.21 million
Best city : Iowa City
PROS: Iowa is great for retirees with no state income tax on Social Security earnings and an income tax break for pension income. UNESCO designated Iowa City as a “City of Literature” in 2008, and it also features a famous university and a lively cultural scene.
CONS: Although Social Security benefits are exempt, Iowa is not all that tax-friendly for seniors. Other retirement income can be taxed up to 8.98 percent. Residents over 55 do have the option of excluding up to $6,000 of taxable retirement income.
Cost of living : U.S. average Population : 573,909 Best city : Cody
PROS: The Equality State was rated fifth in fiscal health out of all fifty states by the Mercatus Center, which is pretty impressive. Retirees can also save some money because there is no state income tax.
CONS: Wyoming is not a good fit for city folk. If you don’t love nature, you won’t find much to do there. It also has one of the smallest populations in America at 573,909, with no big cities to be found. It is impossible, however, to ignore the natural beauty of the state.
Cost of living : 10 percent below U.S. average
Population : 29.2 million
Best city : San Marcos
PROS: The cost of living is 10 percent below the U.S. average and the average income for residents 65 and older is fairly decent. Texas also doesn’t tax income heavily, leaving more dollars in your wallet. Austin and Dallas are great cities with plenty of things to do.
CONS: Texas is a good financial option except for its healthcare, which is an important issue for retirees. Unfortunately, the poverty rates in Texas are high. The state has the sixth-highest senior poverty rates in the country, at 10.8 percent.
Cost of living : 16 percent below U.S. average
Population : 3.97 million
Best city : Nichols Hills
PROS: With one of the lowest costs of living in the country, retirees with savings can stretch their money much further in Oklahoma. There is also no tax on Social Security benefits and up to $10K of retirement income can be excluded. It also has no state estate tax and property taxes are low. The winters are mild and there is sunshine during most days of the year.
CONS: The low cost of living comes with low incomes. Senior health is ranked as the third-worst in the nation. There are also high levels of smoking and physical inactivity and a deficiency in proper nursing home and general geriatric care to address the health issues.
Cost of living: 17 percent above U.S. average
Population: 6.2 million
Best city: Chevy Chase Village
PROS: The average income per household for people 65 and over in Maryland is the second highest in the nation, an average of $70,874. Plus, Maryland is home to the thriving metropolitan city of Baltimore and quite close to the sights and monuments of Washington D.C.
CONS: The income in this state may be high in comparison to the rest of the country, but it is also highly taxed. Social Security is exempt, but distributions from individual retirement accounts are not. Maryland also has an inheritance and estate tax.