“Should I stay in Minnesota for retirement, or move somewhere else?”
It’s one of the most common questions we hear from near-retirees.
And it’s a fair question. Some states tax Social Security, others don’t. Some offer low housing costs but limited healthcare access. And the states that frequently top the “best places to retire” lists (Florida, Arizona, New Hampshire, etc.) may not look quite as perfect once you factor in your personal finances and lifestyle.
The frank answer to this question is there isn’t a perfect retirement destination. The best state for you depends on your retirement savings, health, and priorities. In this guide, we’ll break down the three biggest financial factors and provide a grounded perspective on what really makes a state retirement-friendly.
The Big Three Financial Factors of Where to Retire
Taxes, healthcare, and cost of living. These aren’t the only factors when deciding where to retire, but they do have a major impact. Not only on your wallet but also your way of life and peace of mind.
1. Taxes on Retirement Income
State tax policies can have a huge impact on retirees. Some states (like Florida, Texas, and South Dakota) have no state income tax, which can be attractive at first glance. Others — Minnesota included — tax some or all of your Social Security benefits and retirement income.
But a low tax state isn’t automatically the best. Property taxes, sales taxes, and local taxes can quickly offset income tax savings. The real question: Will moving lower your total tax burden, or simply shift it from one government pocket to another?
2. Healthcare Access and Costs
Healthcare is typically the largest unknown in retirement. Retiring in a state with strong healthcare networks (think Minnesota’s Mayo Clinic system or Florida’s retiree-friendly providers) may offer better access, but costs can vary.
Rural states may offer a lower cost of living but limited facilities. And if you retire early, before Medicare eligibility, bridging the gap with private insurance or ACA plans can be expensive.
The key is balancing affordability with access: Will you get the care you need, when you need it?
3. Cost of Living and Housing
Finally, your daily expenses matter just as much as your tax bill. Housing costs, utilities, and food prices vary dramatically across the US. While Wyoming and New Mexico often score high on “affordability,” California, New York, and Hawaii routinely rank among the most expensive. Even within one state, costs differ between urban and rural areas.
You don’t necessarily have to chase the cheapest state, but consider asking yourself: Can I maintain my desired lifestyle, whether that’s travel, hobbies, or family time, without stretching my retirement savings too thin?
Best States for Retirees: What the Rankings Say
If you search “best states to retire,” you’ll see a host of sites like CNBC, WalletHub, and Kiplinger with different ranking metrics. And no matter which one you peruse, you’ll see a mix of expected states (New Hampshire, Vermont, Wyoming, Maine) and perhaps unexpected names at the top (South Carolina, Idaho, Utah, Rhode Island).
Maybe it’s temperate weather, favorable tax policies, or low cost of living. Maybe it’s because of quality skiing. But here’s the catch — those rankings don’t know you.
- Florida may look ideal with no state income tax, but homeowners face rising insurance premiums from hurricanes and a rapidly growing population.
- New Hampshire has no state income or sales tax, but property taxes are among the highest in the nation.
- Delaware often makes the list for low taxes and affordability, yet healthcare access outside urban areas can be limited.
- Wyoming offers wide-open spaces and low taxes, but for some, the isolation outweighs the financial perks.
In short, while rankings are a helpful starting place, they can’t replace a personalized analysis of how a state’s tax system, housing market, and healthcare resources align with your own retirement savings and priorities.
For some retirees, Florida really is the dream. For others, it’s staying close to family in Minnesota, even if it means paying higher state taxes. The “best” state is ultimately the one where your money and your ideal lifestyle work together.
Worst States for Retirees (and Why)
Just as some states consistently land on the “best” lists, others are routinely flagged as tough places to retire. High tax burdens, steep housing costs, or limited healthcare access can make them challenging retirement destinations — though again, the impact depends on your personal circumstances.
California. Warm weather and amenities are appealing, but high housing costs, state income taxes, and wildfire insurance premiums put a dent in affordability. For many retirees, the lifestyle doesn’t outweigh the expense.
New York, New Jersey, and Connecticut. These states combine some of the highest property taxes in the country with significant income and sales taxes. That doesn’t mean you can’t retire comfortably there — but you’ll need a much larger nest egg to do so.
West Virginia. Low costs make it look attractive on paper, but it ranks poorly in healthcare access and affordability, which may be concerning for retirees who expect to rely heavily on medical services.
Maryland and Massachusetts. Both states boast excellent healthcare access (in fact, Massachusetts was #1 according to one report), but their high tax burdens and housing costs push them down the rankings.
Of course, none of these states is actually “bad” for retirement. If your family, community, or sense of purpose is rooted there, the extra cost is likely worth it. The takeaway is that financial trade-offs are unavoidable, and knowing them upfront helps you plan accordingly.
Valuing the Personal Factors You Won’t Find in Rankings
Rankings and state tax charts can be useful, but they only go so far. At the end of the day, retirement is far more about how you want to live versus where you can save a few tax dollars.
A few personal factors tend to outweigh financial ones:
Family and community. For many retirees, being close to children, grandchildren, or lifelong friends is worth far more than moving to a state with lower income tax rates.
Lifestyle and climate. Some thrive in the sunshine of Florida or Arizona, while others can’t imagine giving up four distinct seasons — or the cabin on the lake.
Access to hobbies and interests. Whether it’s hiking in Colorado, golfing in North Carolina, or theater in New York, where you retire should support the way you want to spend your time.
Emotional connection. Sometimes, it’s just a gut feeling. Staying in a place that feels like “home” can provide peace of mind that no tax savings can replace.
In other words, the “best” state to retire is both a personal and financial decision. It should balance your financial needs with your own definition of a fulfilling retirement.
Should Minnesotans Stay for Retirement or Go Elsewhere?
Money is a means to an end. Nothing can replace the incalculable value of family, community, and whether you can picture life without lake weekends or cabin trips up north. Those personal factors outweigh any “ranking” you’ll find online.
That said, the financial trade-offs are still real and must be accounted for. Minnesota is one of the states that taxes Social Security benefits for retirees above certain income thresholds. It also applies state income tax to distributions from pensions, IRAs, and 401(k) plans, which can push up your overall tax burden. Property taxes and housing costs tend to be moderate compared to coastal states, but higher than some of the Sun Belt destinations that traditionally attract retirees.
Estate planning is another consideration. Minnesota is one of the few states with its own estate tax, applying to estates over $3 million. That means wealthier retirees could face an additional layer of taxation when passing assets to the next generation — a factor that doesn’t come into play in most other states.
On the flip side, Minnesota consistently scores well in healthcare access and quality of life. With major health systems like the Mayo Clinic and a strong network of hospitals in the Twin Cities, retirees know they’ll get the care they need as they age. And for many, staying close to children and grandchildren more than offsets the tax disadvantages.
Long story short, retiring in Minnesota isn’t the cheapest option, but for those who value community ties, access to excellent healthcare, and the inexplicable beauty of four distinct seasons, it may still be the right one.
There’s No Perfect State, Only the Right One for You
Florida isn’t perfect. Minnesota isn’t perfect. No state is.
The best choice is the one where your finances, healthcare access, and lifestyle goals align — and where you can picture yourself living freely and happily in the years ahead.
Fortunately, Americans have options. Whether it’s Nevada, Missouri, or Pennsylvania, there are 50 great US states that are the ideal retirement location for someone.
And with the right retirement plan, you can make almost any state work. Taxes, healthcare, and cost of living are challenges you can prepare for, but the personal side of retirement, the life you want to live, is up to you.
If you’d like help weighing your options and making sure your finances support the retirement you envision, the team at Pine Grove is here to help. We work with near-retirees to look beyond rankings and rules of thumb, guiding thoughtful conversations about taxes, healthcare, lifestyle, and what truly matters to you. Reach out to Pine Grove to start building a retirement plan that supports not just where you’ll live, but how you’ll live in the years ahead.
