Here are the most affordable states for retirees

A new study identifies a rugged group of states — Wyoming, Utah, Montana and Idaho — as the most affordable destinations for American retirees. 

If those places sound cold, consider some warmer states that rank nearly as high in cost of living and other affordability measures: Virginia (5th on the list), New Mexico (7th), Tennessee (10th), Georgia (12th) and South Carolina (15th). 

The study comes from Seniorly, a senior-living site. It ranks states on eight financial factors for seniors who are looking to retire on a budget.  

More than 200,000 Americans moved to new states to retire in 2022, according to Census figures. The most popular destinations: Florida (obviously), North Carolina, Michigan (not so obvious), Arizona and Georgia.  

The Seniorly analysis did not consider lifestyle or climate. Retirees stereotypically head South to seek warmer climes. But a growing number are considering housing costs and living expenses, given the recent history of inflation and retirement-account volatility. 

Given a choice, the vast majority of older Americans, about three-quarters, would like to remain in their homes and communities, according to an AARP survey.  

“When you ask folks why they want to stay, it’s the places where we grew up, it’s the places where we raised our families,” said Mike Watson, AARP’s director for livable communities. “There’s sometimes nothing harder than changing your doctor.” 

For those retirees who choose to leave their state, Florida and Arizona are the time-honored choices. But those states are more crowded and less affordable now than in past decades.  

Florida ranks 43rd in the affordability study. The state ranks relatively high in average Medicare spending, which means seniors may face higher out-of-pocket costs for health care. Monthly electricity bills average $130, which is comparatively steep. And 11 percent of Florida’s seniors live in poverty, a higher rate than in most other states. 

Arizona ranks 17th. Electricity bills are as high as in Florida, but Medicare spending is lower, as is the senior poverty rate. 

Several of the most affordable retirement states sit in the Mountain region. They tend to have lower Medicare spending, meaning lower copays, along with reasonable utility costs and single-digit senior poverty rates.  

The downside? The average low temperature in Missoula, Montana, falls to 16 degrees in January.  

Five of the 10 most affordable states — Wyoming, Idaho, Colorado, Delaware and Tennessee — rank among the nation’s most tax-friendly, according to a Kiplinger analysis.   

The least affordable states for retirees are clustered on the coasts: Massachusetts, New York, Connecticut, New Jersey and California. Cost of living ranges are higher in those places, and only California is considered tax friendly.  

In all of those states and Rhode Island, a disproportionate share of senior homeowners spends more than 30 percent of their income on housing, which is a red flag for unaffordability.