Worst States to Retire in 2014

Florida may be the first state that pops into mind when thinking about retirement, but chilly South Dakota is actually a better fit, according to Bankrate.com.

Every year Bankrate releases its best and worst states to retire in, and in this year’s list popular spots like Florida and Arizona did not even make the top 10 best spots. Bankrate considers several factors such as: weather, cost of living, crime rate, healthcare quality, tax burden, and well-being (as measured by the Gallup-Healthways Well-Being Index).

"While the states that ranked highly may not be thought of as typical retiree havens, seniors should consider more than sunshine when choosing a place for their golden years," Bankrate.com research and statistics analyst Chris Kahn said in a statement. "The Dakotas both ranked in our top 10 for the second year in a row due to their low cost of living, low crime rates, good healthcare quality, low taxes, and excellent satisfaction scores from residents."

According to Bankrate’s 2014 rankings, the country’s interior states are the best option for retirement. The only coastal state to make the top 10 was Virginia, which taxes residents at a lower rate and has a below average cost of living.

"Of course, the best place to retire will differ drastically depending on the individual," Kahn said. "For some, the best place to retire is simply anywhere there's year-round warmth and sunshine. For others, it's where family and friends live. Retirees are best off deciding what factors matter most to them and checking the relevant statistics before making a final decision."

While the interior states mostly made up the top 10 states to retire in, the states in the bottom 10 are mostly in the east and south.

Bankrate used cost of living stats from the Council for Community and Economic Research, healthcare quality stats from the US Department of Health and Human Services’ Agency for Healthcare Quality and Research, state tax rates from the Tax Foundation, crime rates from the FBI, and weather statistics from the National Oceanic and Atmospheric Administration.

(Tax burden is a percent of state income and cost-of-living score of 100 is the national average).

10. Kentucky

Overall score: 41

Cost of living: 90.9

Tax burden: 9.5%

Average annual sunshine: 54.7%

Downtown Frankfort

According to Bankrate, Kentucky’s healthcare system is the fifth worst in the nation and the state’s well-being was the second worst (behind West Virginia). However, the state has a lower-than-average cost of living rank

9. Maryland

Overall score: 42

Cost of living: 116.5

Tax burden: 10.6%

Average annual sunshine: 57%

Baltimore as viewed from Federal Hill

According to the Tax Foundation, Maryland is the seventh-highest taxing state in the country and its cost of living is higher than the national average. On top of that, the state had low healthcare quality scores and an above average crime rate.

8. Oklahoma

Overall score: 43

Cost of living: 90.5

Tax burden: 8.5%

Average annual sunshine: 61%

Downtown Tulsa. © Caleb Long

With one of the highest crime rates in the nation (3,870 violent and property crimes per 100,000 people) and one of the worst healthcare systems, it’s probably not surprisingly that the state also received a low well-being score, according to Bankrate. The state’s tax burden is far better than most of the bottom 10, though.

7. Louisiana

Overall score: 44

Cost of living: 95.8

Tax burden: 7.6%

Average annual sunshine: 64.3%

Bourbon Street, New Orleans. © Chris Litherland.

The weather is warm, the cost of living is low, and the tax burden is light, but Louisiana has other problems that still placed it in the bottom 10. For instance, the state has a high rate of property and violent crimes, plus poor healthcare quality. And along with that warm weather comes a lot of humidity: Louisiana is the second-most humid state in the country.

6. Alabama

Overall score: 45

Cost of living: 93.4

Tax burden: 8.3%

Average annual sunshine: 57.7%

Downtown Huntsville

Poor healthcare quality, low scores for emotional and physical health, and a high crime rate makes Alabama a less-than-ideal retirement spot. However, the state’s cost of living is much lower than the national average.

5. Hawaii

Overall score: 46

Cost of living: 158.1

Tax burden: 9.6%

Average annual sunshine: 59.3%

Hamoa Beach, Maui

Beautiful weather and a high feeling of well-being might make Hawaii seem like a good retirement spot, but the state has the highest cost of living in the entire country, by far. Even second place Alaska’s score of 135.3 doesn’t come close to the 158.1 that Hawaii received.

Bankrate reported that a loaf of bread in Honolulu costs $1.30 higher than the national average, and a trip to the beauty parlor is $18 more expensive than the national average.

4. Arkansas

Overall score: 47

Cost of living: 91.5

Tax burden: 10.3%

Average annual sunshine: 65%

Little Rock

Arkansas may be the seventh cheapest place to live for retirees, but it’s unlikely that cost is the only factor you are going to consider. The state is one of the most humid, which can make it uncomfortable in the summer, the third-highest crime rate and the sixth-lowest rating for wellness. And, despite the fact that cost of living is low, Arkansas has above average state and local taxes.

3. Alaska

Overall score: 48

Cost of living: 135.3

Tax burden: 7%

Average annual sunshine: 37.7%

Downtown Juneau. © Alan Wu

Second only to Hawaii for cost of living, Alaska is an expensive place to live, although its tax burden is low (no state income tax). Plus, its weather is less-than-ideal for retirees. In Anchorage, temperatures stay below freezing for 3 months out of the year, and Juneau gets the least sunshine in the country.

2. West Virginia

Overall score: 49

Cost of living: 97

Tax burden: 9.7%

Average annual sunshine: 40%

Charleston

West Virginia’s wellness score is the worst in the country and its healthcare system received the second-lowest rating because of high rates of potentially avoidable hospitalizations for chronic conditions and poor communication between patients and doctors.

1. New York

Overall score: 50

Cost of living: 129.1

Tax burden: 12.6%

Average annual sunshine: 50.8%

Washington Square Park

New York is unaffordable for retirees unless they have a massive nest egg. Nearly half of New York’s residents live in New York City, which has high taxes and the fourth-highest cost of living. The tax rate is so high, according to Bankrate, because residents are helping to pay for the city’s extensive subway system, police force, parks staff, and other services. Over the years, the state consistently has been named the worst (or second-worst) for tax burden by the Tax Foundation.

Furthermore, the state’s healthcare quality and wellness scores are low and residents have to deal with frigid winters and potential hurricanes.