Here Are 2017's Best and Worst States to Retire

By Maurie Backman Markets Fool.com

Deciding when to retire is a major decision, but choosing where to retire is equally important. Once you move over to a fixed income, it becomes even more critical to live someplace where your retirement dollars can go the furthest. WalletHub recently analyzed all 50 states plus the District of Columbia across numerous measures of retirement-friendliness, including cost of living, health factors, crime, entertainment, and overall quality of life. If you're thinking of retiring in the near future, it pays to review these findings to see how your state ranks -- and whether you ought to consider a move to someplace more retiree-friendly.

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IMAGE SOURCE: GETTY IMAGES.

Where should you live in retirement?

There are many factors that will determine where you'll retire. Proximity to family, for example, might be a priority for you, whereas climate might be paramount for somebody else. But generally speaking, there are certain qualities that make some states more suitable for retirees than others, so it's good to have a basic idea of where your state falls in the ranks.

Here's how WalletHub rates all 50 states and the District of Columbia on the whole:

Overall Rank

State

Overall Rank

State

1

Florida

27

Kansas

2

Wyoming

28

Oklahoma

3

South Dakota

29

Tennessee

3

Iowa

30

Nebraska

5

Colorado

31

Illinois

6

Idaho

32

California

7

South Carolina

33

Louisiana

8

Nevada

34

Indiana

9

Delaware

35

Massachusetts

10

Wisconsin

36

Alabama

11

Pennsylvania

37

Maryland

12

Montana

38

North Dakota

13

Arizona

39

West Virginia

14

Missouri

40

Mississippi

15

Michigan

41

New York

16

Washington

42

Arkansas

17

Utah

43

Kentucky

18

Texas

44

Vermont

19

Virginia

45

New Mexico

20

Georgia

46

New Jersey

21

Minnesota

47

Hawaii

22

Maine

48

Connecticut

23

North Carolina

49

District of Columbia

24

New Hampshire

50

Alaska

25

Ohio

51

Rhode Island

26

Oregon

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DATA SOURCE: WALLETHUB.COM.

Because WalletHub considered factors outside of finances alone when developing its rankings, the above list doesn't necessarily tell you which states are the most affordable for retirees. The following table, however, ranks all 50 states plus the District of Columbia by affordability alone:

Affordability Rank

State

Affordability Rank

State

1

Florida

27

Colorado

2

Alabama

28

Michigan

3

Texas

29

Indiana

4

Wyoming

30

Oregon

5

Tennessee

31

Washington

6

Nevada

32

Illinois

7

South Carolina

33

Wisconsin

8

Mississippi

34

Kansas

9

Louisiana

35

New Hampshire

10

Delaware

36

New Mexico

11

Georgia

37

Maine

12

Oklahoma

38

Alaska

13

West Virginia

39

Maryland

14

Idaho

40

Nebraska

15

South Dakota

41

New Jersey

16

Kentucky

42

California

17

Arkansas

43

North Dakota

18

North Carolina

44

District of Columbia

19

Virginia

45

Minnesota

20

Pennsylvania

46

New York

21

Arizona

47

Massachusetts

22

Missouri

48

Vermont

23

Montana

49

Connecticut

24

Ohio

50

Hawaii

25

Utah

51

Rhode Island

26

Iowa

DATA SOURCE: WALLETHUB.COM.

You'll notice that Florida, Wyoming, South Carolina, Nevada, and Delaware all fall into the top 10 in terms of overall rank and affordability, which makes them strong contenders for retirees across the board. Meanwhile, Rhode Island, Hawaii, New Jersey, and Connecticut not surprisingly rank pretty low on both lists. After all, it's hard to enjoy a good quality of life when the cost of living renders basic necessities, like housing, expensive or downright unaffordable. That said, if you have your heart set on retiring someplace like Hawaii, you can achieve the goal of moving there if you save well enough during your working years.

How much income will you have to work with?

Choosing the right place to retire is very much a matter of seeing how far your fixed income will go. But the more you save independently, the more choices you'll have as you get older.

Keep in mind that Social Security probably won't be enough to sustain you financially in retirement even if you limit your choices to the most affordable states on the list. Social Security will only replace about 40% of the average worker's pre-retirement income, but most of us need 70% to 80% of that figure once we stop working. You might manage to get away with a lower threshold, like 60% of your former income, if you move from a more expensive state to one with a significantly lower cost of living. But for most people, Social Security alone just won't suffice.

In fact, the average Social Security recipient today receives just $1,360 a month in benefits -- hardly enough to cover everything from housing to food to healthcare. Whether you're a few years or a few decades away from retirement, now's the time to ramp up your savings efforts. Workers under 50 can currently contribute up to $18,000 a year to a 401(k) and $5,500 to an IRA. These limits increase to $24,000 and $6,500, respectively, for workers 50 and older.

While many of today's workers can't afford to max out their contributions, setting aside a smaller amount each month can go a long way over time. Saving $200 a month for 30 years, for example, will give you an ending balance of $272,000 if your investments generate an average annual 8% return. The better you're able to save on your own, the more comfortable a lifestyle you'll be able to buy in the future -- regardless of where you ultimately choose to retire.

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