Are you close to retirement? If so, you may want to take some time to see how your state of residence may impact your financial situation. After all, you need your money to last now that you're done working, and you don't want to find yourself strapped because of a high cost of living or taxes. Moreover, older residents should be cognizant of the quality of health care in their state.
Here's some advice on where not to move once you retire:
1. Louisiana
Don't get sick as you get older if you live in Louisiana. This state ranks last in the nation in the quality of health care, according to the United Health Foundation. On the plus side, the cost of living is relatively low and taxes are better than many states.
2. Maryland
By most measures, Maryland's cost of living is among the highest in the nation. The state's economy is buoyed by a heavy Federal government presence and many highly paid workers, but it can be hard on retirees looking to save. Maryland has among the highest taxes in the nation, with home prices above the national average, as well.
3. Vermont
The crime rate is ultralow, the leaves are awesome in the fall, and there's the headquarters of Ben & Jerry's. But it has an effective tax rate of 10.76%, which is above the national average. This is one contributing factor to Vermont ranking as one of the worst states when it comes to cost of living, according to several surveys.
4. Connecticut
The Nutmeg State can boast good proximity to jobs in New York City, and its residents are generally wealthier and more educated than most. But it's less than ideal as a place for retirees. Connecticut is one of the most expensive states in the nation, and its effective state and local tax rate of 13.48% — one of the country's highest — doesn't help anyone who's trying to get by on a fixed income.
5. New York
All you need to do is look at the cost of an apartment in New York City to know why retiring there isn't the best move, financially. The rest of the state isn't so bad, but the overall cost of living in New York is considered one of the highest in the country. State income tax of nearly 9% places it in the top tier, as well. It's worth noting that health care in the state is above average in quality, according to the United Health Foundation.
6. California
On one hand, California has a lot of beautiful places to live, with nice weather and a variety of options to keep retirees active and healthy. But financially, it's a tough place to be for those looking to make their retirement money last. Cost of living? In the top five, according to data compiled by CNBC. Its state income tax is 13.3%, the highest in the country, and most retirement income is taxed. Health care costs are also above average in California.
7. New Jersey
It's not cheap to live in New Jersey, and that's partly due to higher-than-average income taxes and taxes on real estate. While not all retirement income is taxed like some states, residents could be subjected to estate and inheritance taxes of up to 15%. Property is taxed at 2.29%, the highest rate in the nation, and that really stings when you consider that the state has the fourth-highest median home value. On the flip side, New Jersey does rate among the top third in most major health care quality rankings.
8. Nebraska
The Cornhusker State has a relatively low cost of living, until you consider that there are high taxes on retirees and real estate. Nebraska taxes most retirement income, such as pensions and retirement account withdrawals, and some residents pay Social Security taxes. And its effective property tax of 1.88% is one of the highest in the nation.
9. Montana
It might be beautiful to retire in Big Sky Country, but don't assume that it will be cheap. Montana has a higher-than-average property tax rate, and taxes all pension and retirement income, as well as most Social Security income, according to the Retirement Living Information Center. Montana is also in the bottom half when it comes to the health care offered to seniors.
10. Rhode Island
The good news about Rhode Island is that most clothing, food, and prescription drugs are exempt from state sales tax. But the state has the 10th highest property tax rate, with the added blow of median home prices being the 12th highest in the country. Retirement income is also taxed at the state level.
Now check out the average retirement age in every state:
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