Discover Which State Has the Best Benefits at Retirement?

According to a 2025 Bankrate study, New Hampshire was named the best state for retirees overall due to its high scores in categories like safety, health care, and taxes. However, the answer to Which state has the best benefits at retirement? is highly personalized, as the ideal location depends on your financial situation, health needs, and lifestyle preferences.

Quick Summary

No single state is best for every retiree, but top contenders like New Hampshire, Florida, and Tennessee offer strong tax advantages and excellent healthcare options. The best choice ultimately depends on your individual priorities, lifestyle, and financial needs during your golden years.

Key Points

• No Single 'Best' State: The ideal retirement state depends on your personal priorities, lifestyle, health needs, and financial situation.

• Tax Benefits Vary: States with no income tax, like Florida and Wyoming, offer significant savings on retirement income, but may have higher property or sales taxes that should be considered.

• Healthcare is Crucial: States like Minnesota and New Hampshire are highly rated for healthcare quality and access, which may be a top priority despite other costs.

• Cost of Living Trade-offs: Some affordable states like Tennessee have lower housing costs but may come with higher sales taxes, requiring careful budgeting.

• Lifestyle Matters: Factors like climate, recreational opportunities, and community vitality are just as important as finances for a fulfilling retirement.

• In-depth Research is Key: Model your budget and visit potential locations before making a final decision to avoid costly surprises.

Understanding What Constitutes 'Best Benefits'

Determining the "best" state for retirement involves more than just a single factor. What is a top priority for one person—like no state income tax—might be less important to someone else who values excellent healthcare or a warm climate above all else. A comprehensive analysis considers:

• Tax Burden: This includes state income tax on retirement income (like Social Security, pensions, 401(k)s, and IRAs), property taxes, and sales tax.
• Cost of Living: Affordability extends beyond just taxes to include housing, groceries, utilities, and transportation.
• Quality of Healthcare: Access to quality facilities, specialists, and long-term care services is a crucial consideration for many seniors.
• Quality of Life: Factors such as crime rates, climate, availability of recreational and cultural activities, and access to a supportive community all contribute to overall well-being.

Top Contenders for the Best Retirement Benefits

Based on various recent studies and a comprehensive look at the criteria above, several states consistently emerge as strong options for retirees, each with a unique profile of benefits.

New Hampshire: The Balanced Winner

New Hampshire frequently tops lists for a holistic retirement experience. While its winters can be harsh and the cost of living slightly higher than the national average, it balances this with significant financial and quality-of-life benefits.

• Tax advantages: No state sales tax and no tax on wages or Social Security benefits. A tax on interest and dividends is also being phased out.
• Strong healthcare: Often ranks high for health care quality and access.
• Safety: The state consistently reports low crime rates.
• Community support: Strong community and social connectivity for seniors is a key benefit.

Florida: The Sun-Drenched Tax Haven

Long a retirement favorite, Florida offers undeniable tax benefits and a vibrant lifestyle for many. However, its popularity means it has some trade-offs, such as rising living costs and vulnerability to natural disasters.

• No state income tax: Allows retirees to keep more of their Social Security and pension income.
• Abundant recreational activities: Countless beaches, golf courses, and social communities cater to a senior-heavy population.
• Strong healthcare infrastructure: Numerous facilities and specialists cater to older adults.
• Weather: A key draw, offering warm weather year-round, but also comes with higher insurance costs and risks from hurricanes.

Tennessee: The Affordable Option with No Income Tax

For retirees prioritizing a lower overall cost of living, Tennessee is a standout. It offers a low tax burden and affordability but may have less robust healthcare outside of major metro areas.

• No state income tax: No tax on Social Security or other retirement income.
• Low cost of living: Housing costs and daily expenses are significantly below the national average.
• Affordable property taxes: The state boasts some of the lowest property tax rates in the country.
• High sales tax: A high state sales tax can offset some of the income tax savings, especially for retirees who spend heavily.

Wyoming: A Low-Tax, High-Nature Choice

Retirees seeking a quiet, natural landscape and a minimal tax burden often look to Wyoming. Its benefits are primarily financial and environmental, though access to comprehensive healthcare can be limited in rural areas.

• No state income tax: No taxes on retirement income, pensions, or Social Security.
• Low taxes overall: Among the lowest overall tax burdens, with low sales and property tax rates.
• Natural beauty: Ideal for active seniors who love the outdoors, with access to national parks and clean air.
• Healthcare access: Less developed healthcare infrastructure, particularly for those living far from major cities.

Comparison of Top States for Retirement

State	Taxes	Healthcare	Cost of Living	Quality of Life
Florida	No income tax (very tax-friendly)	Strong infrastructure, good access	Average (rising)	Abundant recreation, warm climate
New Hampshire	No sales/income tax (property tax high)	High quality and access	High (moderate compared to neighbors)	Safe, strong community, harsh winter
Tennessee	No income tax (high sales tax)	Strong in urban centers	Low (affordable)	Rich culture, moderate weather, less robust rural healthcare
Wyoming	No income tax, low overall burden	Limited access outside cities	Average (rising)	Quiet, outdoor-focused, harsh winter
Delaware	No sales/inheritance tax (low property tax)	Accessible and high quality	Varies (coastal higher)	Mild climate, good amenities, potentially congested

Finding the Right Fit for Your Retirement

The "best" state is the one that aligns with your specific needs and priorities. Instead of looking for a single champion, consider what matters most to you.

For the budget-conscious retiree

If maximizing your savings is the primary goal, states with a low overall tax burden and low cost of living, such as Tennessee, Wyoming, or Mississippi, might be your best bet. These states allow your fixed income to stretch further on daily expenses.

For those prioritizing health and wellness

If excellent healthcare is a non-negotiable, states like Minnesota, New Hampshire, and Hawaii consistently rank at the top for quality of care and facilities. For some, paying higher taxes or facing a higher cost of living is a worthwhile trade-off for peace of mind regarding medical needs.

For retirees focused on lifestyle and climate

Your retirement should be about enjoying what you love. If warm weather is your priority, Florida and Arizona are popular choices. For those who prefer a more outdoorsy lifestyle with four distinct seasons, a state like Wyoming or Colorado might be more appealing, despite different trade-offs. A detailed exploration of state differences, such as the analysis conducted by the American Association of Retired Persons (AARP), can provide valuable insights into specific community and long-term care support.

Actionable Steps for Your Research

1. Define your priorities: What are your top three concerns? Financial savings? Access to healthcare? Climate? Lifestyle?
2. Model your budget: Use a retirement planner to compare your projected expenses in different states, accounting for income, sales, and property taxes.
3. Visit potential locations: A vacation can provide a snapshot, but consider a longer-term stay in an area you're seriously considering to truly experience the community and daily life.
4. Consult with experts: Speak with a financial advisor or a real estate agent specializing in senior living to get a clearer picture of the local realities.

Conclusion: Personalizing Your Decision

There is no universal winner for Which state has the best benefits at retirement? The ideal state is a deeply personal choice based on a careful evaluation of financial, health, and lifestyle factors. By understanding the unique strengths and weaknesses of top contenders like New Hampshire, Florida, and Tennessee, and prioritizing what truly matters to you, you can confidently choose the state that offers the best benefits for your specific retirement vision.

Frequently Asked Questions

Which states have no income tax that could benefit retirees?

Nine states currently have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. These states do not tax retirement income like Social Security, pensions, or 401(k) withdrawals.

Are 'low-tax' states always the cheapest for retirement?

Not necessarily. While a state may lack income tax, it could have high property or sales taxes that offset the savings. A holistic view of the total tax burden and overall cost of living is essential to determine true affordability.

How does quality of healthcare differ among the best retirement states?

States like Minnesota and New Hampshire often rank highly for quality of healthcare, offering top-tier facilities and specialized senior care. In contrast, some low-tax, low-cost states may have less developed healthcare infrastructure, especially in rural areas.

What are some hidden costs to consider when choosing a retirement state?

Beyond taxes, consider the costs of home insurance (especially in coastal areas like Florida), high sales taxes on everyday purchases, utility costs, and the expense of travel if family or friends are far away.

Is climate a major benefit for retirees?

For many, climate is a significant factor contributing to quality of life. Warm-weather states like Florida and Arizona offer year-round outdoor activities, while other states like New Hampshire or Wyoming appeal to those who enjoy four distinct seasons, despite the potential for harsh winters.

Can proximity to family outweigh financial benefits?

Absolutely. For many seniors, staying close to family and friends is the most important factor, even if it means a higher cost of living or tax burden. Strong social connections are crucial for mental and emotional well-being in retirement.

Do any states offer exemptions for pension income?

Yes, several states offer specific exemptions for pension income. In addition to the nine states with no income tax, states like Illinois, Iowa, and Pennsylvania are noted for not taxing most retirement income, including pensions.