When planning for your retirement, selecting the right place to live becomes a major part of your decision. There are many factors to consider when thinking about where you will want to live — among them proximity to family, climate, and community type. But the importance of cost in this decision process cannot be overstated. Recent data gathered by Bankrate emphasizes that a location’s affordability should be a key element of your senior living decision-making process.

Why senior living affordability matters

Bankrate’s latest analysis of the best and worst states for retirement ranked each state in the U.S. by synthesizing numerous data points, which they grouped into five broad categories and weighted by importance (as a percentage, in parentheses):

  • Affordability (40%)
  • Overall well-being (25%)
  • Healthcare quality and cost (20%)
  • Weather (10%)
  • Crime (5%)

“We weighed affordability the heaviest in the ranking to reflect the challenges that so many Americans face with their retirement savings and the rising cost of living across the U.S.,” noted Alex Gailey, lead data reporter for personal finance at Bankrate.

With inflation driving up living costs, Bankrate’s research over the past few years shows that many Americans haven’t been able to put away as much as they would like for retirement. As a result, the ability to make those retirement dollars go further is top of mind for many people as they make senior living decisions.

But how do you quantify this “affordability” that so many older adults are searching for in their retirement location? The Bankrate analysts used state-level metrics such as:

>> Related: What Are Your Retirement Community Decision Priorities?

Top states for retirement

According to Bankrate’s data analysis, Delaware tops the list of the best states for retirees in 2024, thanks largely to its tax policies (since affordability made up 40% of each state’s score). Although it has a higher overall cost of living, Delaware’s lack of state or local sales tax and lower-than-average property taxes offer significant value. In addition, Delaware does not tax Social Security benefits, which can result in big savings for older adults.

Delaware also received high rankings for its racial and ethnic diversity, cultural options, and the overall well-being of its residents, despite its high percentage of population age 62 and older. With a fairly temperate climate that rarely suffers natural disasters like earthquakes, hurricanes, or tornadoes, the state has a lot of appeal, but did have a few dings to its rating like cost of healthcare and crime.

But on the whole, Delaware’s move from second in 2023 to top-rated in 2024 came down to the state’s overall senior living affordability, making it an attractive option for retirees looking to maximize their savings.

“While Delaware is a pricier state to live in [based on cost of living], it scores well in all other affordability metrics we considered in the ranking: property taxes, combined state and local sales tax, and homeowners insurance,” Gailey explained.

The remaining top five best states to retire to in 2024, based heavily on their affordable cost of living and low property taxes are:

  1. West Virginia
  2. Georgia
  3. South Carolina
  4. Missouri

>> Related: How Retirement Income Affects Senior Living Affordability Calculations

States with less senior living affordability

Conversely, some states are less favorable for older adults who are concerned about choosing a location for a more affordable retirement. For instance, at the bottom of the list is Alaska. According to Gailey, the state “was dragged down by back-of-the-pack scores in affordability, quality and cost of healthcare, weather, and crime.”

The other states rounding out the bottom spots on Bankrate’s rankings for 2024 are:

  1. New York
  2. Washington
  3. California
  4. North Dakota

New York, Washington, and California are known for their high living expenses, as well as high property taxes, expensive healthcare, which can severely impact retirees’ budgets and quickly deplete retirement savings. North Dakota got dinged for its often-frigid weather as well as the above average cost of healthcare and below average well-being of its residents.

>> Related: Factoring Climate Change into Senior Living Decisions

Additional senior living location considerations

When thinking about where you would like to live as your grow older, senior living affordability should be among your top considerations. This state ranking by Bankrate drives home just how much the cost of living in a particular place can impact your retirement years. (This is always why affordability should be a key element of retirement communities’ marketing messaging.)

To thoroughly and accurately assess your personal financial situation, people approaching retirement should start by evaluating their budget, spending habits, and retirement savings and income. Understanding how much you can afford to spend and how long your savings will last will help you make a more informed retirement living decision.

Additionally, consider the cost of living in your prospective new location. Moving from a high-cost state like New York or California to a more affordable state like Georgia could be financially beneficial. However, ensure that the affordability of your new location aligns with your retirement lifestyle goals. For instance, West Virginia may be a highly affordable place to live, but if you want year-round warm, sunny weather, that would not be the right place for you.

But there are other important considerations beyond cost when making a senior living decision. For instance, be sure to think about:

The quality and availability of healthcare

Having access to high-quality healthcare, including long-term care services, should be factored into your senior living decision. Additionally, the cost of care in a particular location should be considered — especially since this can be one of the most difficult senior living costs to plan for, given the many unknowns of the future.

This is one of the top reasons that some people opt to move to a continuing care retirement community (CCRC or life plan community). A CCRC provides residents with access to a full continuum of care services, should they ever need them. Learn more about CCRCs on our CCRC Articles and Guides page.

Tax implications

Moving to another state may result in a higher or lower tax bill. This includes differences in property, sales, and income taxes from state to state. Depending on where you are moving from and moving to, these differences could result in a substantial swing in your retirement budget.

Additionally, for those who chose to move to a CCRC, there may be certain tax deductions available for your entry fee and/or monthly service fee. (Always consult with a tax professional about how your senior living decisions will impact your taxes.)

A solid community

Having a strong sense of community has many benefits, particularly for older adults. The ready-made support system provided by a community can be essential for not only socialization and friendship but also should a person begin to have health or mobility problems or suffer the loss of a loved one.

A balanced approach to choosing a retirement location

Choosing the right state and community for retirement is a complex decision that involves balancing affordability with other personal preferences and needs. For older adults who are particularly mindful of costs and budgets, choosing a more affordable senior living location can ensure that your savings go further and provide you with the financial security necessary for a fulfilling and worry-free retirement.

FREE Detailed Profile Reports on CCRCs/Life Plan Communities
Search Communities