You spent your entire life building your proverbial financial nest egg. Now you’re ready to use your retirement savings, whether it’s your 401k or IRA account, in conjunction with your pension and social security money and move somewhere where you can live out your golden years in peace and quiet before taking that big old dirt nap. But retirement planning involves making lots of careful choices. If you make one little mistake, you could wind up in debt or without the ability to live your day to day life. So picking the right state to retire in is an essential part in retirement planning, and here are some of the worst states in America to retire in.The cost of living in the Big Apple is extremely high and so are the tax rates. As a matter of fact, state and local income taxes in New York are among the highest in the entire country. Add to that the extremely costly health care and the high property taxes, which rank as the fourth highest in all of America, and you’ve got a money pit you can’t get out of.
Next to New York City, D.C. has the second highest cost of living. It also has a 14 percent poverty rate among seniors alone. Plus the taxes are to die for, and not in a good way. D.C. has an 8.9 percent income tax rate, one of the highest in the U.S. You’d also have to contend with keep your retirement savings safe from bandits, as the crime rate here is higher than normal.
But that’s not the worst of it. The Golden State imposes the highest income tax rates in the entire country and the sales tax often goes as high as 10 percent. As if the taxes weren’t bad enough, the overall cost of living is too high for seniors to manage, even with an IRA and 401k to boost their lowly social security benefits and pension.
The gas prices are 11.7 percent above the national average. But the high cost of living takes on a whole new meaning if you’re planning to rent an apartment in Portland, as they charge more than double the national average rental fee. Oh, and if you earn a retirement income of more than $125,000 a year, expect to get slapped with a 9.9. percent income tax. Now that’s brutal for seniors.
Sure, it’s just dreamy living by the ocean, but because it’s a major tourist destination, the income taxes are as high as 11 percent. It’s actually the second highest in America, and certainly not good news for retirees. Plus the cost of renting a median home can set you back as much as $2,975 a month. That’s three times more than the national average.
The Garden State is the worst because of the high taxes and the cost of living for retirees. Apartment rental fees can go as high as 67 percent or more than the national average. Also the real estate taxes are too high for seniors to own a home with their retirement savings. To add insult to injury, 401k, social security, and IRAs can have an 8.97 percent tax imposed on them, and the health care costs are as high as 8 percent.
The average income in North Carolina is $64,490. Do you have that much in your retirement savings? About 10 percent of seniors in North Carolina live in a state of poverty. Even with social security, pension, 401k and IRA, you could wind up in a butt load of debt in your not so golden years.
Social security benefits, along with private pensions and military retirement income are taxable here. Seniors will also find that the cost of living in Minnesota is way above average. So the cost of median home value and a lifetime of health care costs would wind up leaving your retirement savings drier than a well.
The upside of retiring in Illinois is that the state won’t slap taxes on retirement income sources like private pensions, social security, 401k and IRAs. Unfortunately, the local and state taxes combine can be 10 percent higher than the nation average. Also, health care costs are extremely high, even for seniors who are relatively healthy.
For starters, there’s the cost of living. The average cost of a home is $652,136. Renting, which costs $1732 a month, is also out of the question. Retirees should also brace themselves for paying local and state taxes average 10.9 percent. It’s also considered the 10th state with the highest number of violent crimes.
The state’s income and property tax rates are the second highest in the nation which is certainly unfavorable for seniors looking to avoid debt and have enough retirement money to enjoy life until their final breath. Other things, like the price of coffee, which is 23 percent, or a gallon of gas, which is 4 percent higher than average, could be an issue.
There are no state sales tax or individual income tax. So what’s the problem here? Well the cost of living is high. On average, an apartment can set you back $1358 a month. While home costs are 71 percent higher than the national average. But the biggest issue is the high number of violent crimes reported each year. As a senior, the last thing you want to worry about is being robbed, hurt or killed.
Plus the cost of living is pretty low and so are the number of violent and property crime rates. But the incident of rape and burglary are unfortunately high. Plus, the health care, which is vital for seniors, has ranked as one of the worst in all of America. So investing your retirement money here may not be the best option, even if you are in the best of health for the time being.
But the health care quality ranks pretty low, and many seniors have found themselves exposed to unnecessary infections. But the crime rate is also a bit of a deal breaker. Louisiana has the 5th highest violent crime rate in the country. So although the cost of living is low enough for retirees to invest their retirement savings in, the health care and crime rate is certainly off-putting.
Sadly, Arkansas has a poor rating when it comes to crime and health care, not to mention the overall well-being of seniors. The state ranks as the 9th highest violent crime rate in the country and the 7th lowest in health care quality rating. It also gets the 7th lowest score in level of happiness and personal well-being for seniors.
Unfortunately, the state scores poorly for its overall well-being and health care for seniors, according to the Gallup-Healthways Well-Being Index. Seniors who are forced to bleed out their retirement savings, pension, social security, etc., often wind up in poor health conditions due to hypertension, asthma and diabetes and the rate of these conditions have increased over the years.
Although social security benefits are not subject to state taxes, other retirement income, such as private pensions, 401k and IRAs are taxable. Also, seniors might find it difficult to balance their budget. Ultimately, their retirement savings won’t hold out under Maine’s above-average living costs, and they could wind up in serious debt.
On the plus side, it is extremely tax friendly. So seniors can enjoy tax breaks on social security benefits, as well as being exempt from state taxes for income up to $41,110. But despite the low cost of living, some seniors struggle to make ends meet and up to 11.4 percent are living in debt and poverty.
After all, the cost of living is 4 percent below the national average. But the state’s healthy ranking is among the worst in the country, with many elderly facing premature deaths at the hands of obesity and lack of inactivity. Plus the taxes will wreck into retirement income like private pensions, 401ks, and an IRA. Fortunately, they’ve spared social security benefits from being taxed.
Social security benefits in the Badger State are exempt from state taxes, but other retirement savings like pension, 401k and IRAs aren’t. Retirees 65 and older must make an average income of $37,673 annually, not to mention face an average health care cost of $387,705. The only pro to that is that Wisconsin has a very high quality of health care facilities.
The cost of living is at 19 percent above the U.S. average and it’s considered one of the least tax friendly state for retirees. Seniors looking to enjoy their golden years will find themselves crushed by the high living costs and taxes, especially if they’re living on below average incomes, with an unforgiving income tax rate of 8.95 percent.
The Treasure State’s living costs are too high and the average income to low for residents 65 and up to live comfortably on their fixed retirement money. In fact, if your retirement income is higher than $17,000, you could end up being taxed 6.9 percent, regardless of whether it comes from social security, a private pension, 401k or an IRA.
The average income requires for seniors must be $55,802 and up in order to stay afloat with the cost of living, which is 13 percent above the U.S. average. The state sales tax is at 7 percent and virtually all sources of retirement income are taxed like ordinary income. So there’s very little breathing room in tiny Rhode Island.
For starters, retirees will face a 5.1 percent state tax on most retirement savings plans like private pensions and 401k, but will get a reprieve on social security benefits. So in essence, no matter how much retirement savings you’ve got, you could wind up seeing the state government taking a big chunk out of your well-deserved earning.
Anything above $59,180 in gross income for a senior couple, or $29,590 for a single senior will be subject to the 6.87 percent average in taxes. Nebraska also taxes most other retirement incomes like 401k, IRA, and private pensions, including retirement-plan withdrawals. Plus, the median property tax on the state’s home value of $133,800 averages $2,474, which is a major kick in the pants for seniors.
