Worst States to Retire In

High Taxes Make These States Unfriendly to Retirees

Do You Know When to Retire?

SolStock/Getty Images 

Looking for a place to retire? You might steer clear of these states. Although each state on our list has plenty of positive selling points, other states may lend themselves better to retirees looking to relocate.

The map below shows a breakdown of the eight worst states for your retirement, not to be confused with the best states for retirees.

West Virginia

Although you’ll meet some incredible people in West Virginia, you won’t find the state scoring high on very many “best of” lists. Unfortunately, we have to agree when looking at the state from the lens of a retiree. Most retirement income, including Social Security, is taxed after the first $8,000, the average income for retiree households is only $40,000 and only 8 states scored below West Virginia in fiscal soundness. It also ranks near the bottom for retiree health. Only 57 percent of its population is able-bodied compared to the national average of 65 percent.


If reality TV is any guide, America is fascinated with Alaska but not as a place to grow old. The harsh conditions and high cost of living—32 percent above the national average, might be why only 69,300 of its residents are over the age of 65.

Despite the collective “no” from seniors, there’s plenty of reasons why Alaska isn’t as bad as it sounds. No state income or sales tax, the annual dividend check from the state’s oil well savings ($1,100 per person) and, of course, the absolutely beautiful scenery.


No sales tax, over 300 miles of beautiful coastline, Portland being the most bike-friendly city in the country, low crime rate, farmers markets everywhere and beautiful weather. What’s not to like about Oregon? The 9.9 percent top income tax rate for one. Also, the high cost of living that comes in 18 percent above the national average and the below average household income. At $53,799, that’s 16 percent lower than the average.


How does 44.3 inches of snow per year sound? Or an average low temperature of 0.2 degrees in January? Above average living expenses and below average income and the state taxes Social Security benefits as much as the federal government along with almost all other retirement income including military, government, and private pensions. Add to that the high state sales and income tax, and you can see why Minnesota might not be high on your list. On the other hand, it ranks sixth for the most agreeable state and the “land of 10,000 lakes” is a real thing. Want waterfront property? No problem.


Unfortunately, Kentucky is either at the top or near the top of worst places to retire, including ours. The high rate of smoking, poverty and low physical activity along with a dismal rating for the quality of nursing home care place the healthcare situation at the bottom of the list.

On the other hand, the cost of living is low, median home prices are a mere $113,000, and the state doesn’t tax the first $41,000 of retirement income and doesn’t tax Social Security at all. And the state produces 95 percent of the country’s bourbon. That has to count for something.


This poor state (literally) can’t get out of its own way. With cities like Detroit struggling to survive and the Flint, Michigan water crisis that made national headlines, the state hasn’t been cast in a positive light over the past handful of years. Add to that challenging winter weather, and an upcoming change where seniors will have to choose between having their Social Security taxed or $20,000 of their retirement income, and rising poverty, seniors are looking elsewhere.

Some bright spots—cost of living is 12 percent below the national average, and the scenery—yes!


You won’t have any trouble finding beautiful views in Montana but holding onto your money might be a challenge. The cost of living is 3 percent above the national average while income is 21 percent below. Montana will tax most of your retirement income including a top tax rate of 6.9 percent that isn’t just for the filthy rich. Once you earn $17,400 or above, 6.9 percent is your rate. Ouch!

By the numbers, Montana isn’t a place you want to move to for retirement but lifelong residents don’t often leave. Nearly 17 percent of the population is 65 or older and there’s always the snowbird option.

New Mexico

Most of the states on our list have been in the northern portions of the country but there are some steer-clear states in the southern portion as well. Leading that charge is New Mexico. The retiree poverty rate of 12 percent is the 3rd highest in the country. The tax on Social Security benefits and most other retirement income is probably a big reason for the high poverty rate although low-income seniors can receive an $8,000 exemption. On the bright site, healthcare costs are below average along with the cost of living.