Key takeaways

• It often makes financial sense to relocate in retirement, especially if your state has high taxes
• The ideal retirement destination can differ depending on lifestyle elements, such as weather, cultural events, and being close to family
• Overall cost of living can vary significantly by state and includes day-to-day purchases like groceries and transportation

Making a short list of where to retire should combine fun and financial elements.

Congrats! Your kids are out of the house, your mortgage may be paid off, and you’re ready to retire. So now the question is: Where should you retire? There are some states that might offer a better retirement lifestyle and have certain financial benefits, but the right place will depend on what’s most important to you.

What to consider when choosing the best state to retire in

As with any financial decision, your own unique situation and priorities will lead you to the best choice. Here are some important things to consider when it comes to finding the best places to retire — for you.

Quality of life

This might be the most personal consideration because everyone has a different definition of what makes life great. For some, it may mean soaking up all the cultural capital a city has to offer. For others, it may mean solitude or being surrounded by nature.

Do you crave the slowness of a beach town or the hustle and bustle of a mid-to-large sized city? Are you open to exploring a new community and making new friends or would you rather forge deeper connections with people you already know or move closer to family? All of this and more will have an impact on your overall quality of life.

Housing costs

Housing costs have been on the rise nearly everywhere, with the median price of existing homes in the U.S. reaching an all-time high of $435,300 in June 2025. Whether — and where — you plan to buy or rent a home in retirement is likely going to have a bigger impact on your budget than anything else.

Read more: The 10 best places to retire in Arizona

Healthcare costs

There are a lot of factors that influence a retiree’s healthcare costs, the least of which is location. Some couples may require as much as $413,000 to pay for medical costs in retirement.

Costs that vary by state include Medicare Part D premiums, Medicare Advantage plans, Medigap premiums, and out-of-pocket spending.

Read more: The 10 best places to retire in Florida

Taxes 

This is a big consideration throughout our lives, but as incomes may decrease in retirement, it can become a huge factor. Depending on the type of retirement income, you may have to pay taxes on your distributions. Federal income tax is a given, but living in a state with a high-income tax rate could leave you with even less income to live off.

Plus, if you meet the income threshold for your filing status, you may have to pay federal income tax on your Social Security benefits. Depending on where you live, you might also have to pay state income tax in addition to federal income tax on your Social Security benefits.

Read more: The 10 best places to retire in California

Cost of living   

State cost of living is an umbrella category that includes housing, healthcare, insurance, and taxes, but also the cost of daily goods and services, like food and transportation.  Some places in the U.S. are easier on your wallet than others. If you’re looking to trim costs in retirement, this may be the primary consideration.

Read more: The 10 best places to retire in North Carolina

Weather

Are you looking for year-round sunshine? Or do you love to experience the seasons? Maybe two homes would better suit your snowbird tendencies. According to Empower research, Americans are all over the map when it comes to their ideal retirement location: 24% seek a warmer climate, 23% want to be closer to the ocean, and 20% are on a quest for a less-populated town. 

Read more: The 10 best places to retire in South Carolina

The best states to retire to in 2025

To find an objective answer to the question of what states are the best to retire in, we came up with a relatively simple formula: Follow the money.

Millionaires tend to be able to live in places that offer the best lifestyles. Of course, anyone can run out of money if they overspend, but the more money you have, the more options you have as to where to live.

So, to come up with the best states for retirees, let’s look at the states with the highest percentage of millionaires and compare that list with the states that have the lowest taxes, to see which states make both lists. That way, we can account for both lifestyle considerations and which states make the most sense from a financial perspective.

Read more: The cost of living in paradise

Which states have the best tax situation?

Instead of looking at tax rates, which can vary depending on your specific circumstances, the Tax Foundation’s State Tax Competitive Index accounts for many complexities: individual income taxes, sales taxes, corporate taxes, property and wealth taxes, unemployment insurance taxes, and use and excise taxes.¹

Here are the top 10 states based on that ranking:

Which states have the most millionaires?

Next, to get a read on lifestyle in various states, let’s take a look at the 10 states that have the highest amount of households making $1 million or more a year in adjusted gross income, based on an analysis of 2022 data from the Internal Revenue Service.²

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The results

The top two states to retire in according to our formula are — drumroll please — Wyoming and Florida. Wyoming takes the top spot in having a competitive approach to state taxes. Plus, Empower Personal Dashboard^TM data** from August 2025 reveals that people in Wyoming have an average retirement savings of $500,528 and are in the top 15 states based on average net worth ($617,364). Florida ranks similarly, with its residents holding an average of $519,724 in retirement savings and taking one spot higher in terms of average net worth ($619,823). They’re also both lifestyle standouts: Florida is well-known for beachfront living, and if you’ve ever been to Jackson Hole, you may agree Wyoming is a lovely place.

Special mentions go to Texas, New Hampshire, and Montana, which were all in the top 20 on both the tax and millionaire lists.

For those of us who want to retire in the U.S., there are nine states that have no state income taxes: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. For many retirees with the means to move, it may make financial sense to relocate — especially if their home state has high taxes like California or New York.

What about retirement lifestyle?

Money isn’t everything in retirement — there’s no point in having money if you can’t spend it on a lifestyle that makes you happy, such as being able to roam in nature or go out to nice dinners, shows, and museums. Many of us won’t have unlimited funds when we reach retirement age, so we may need to make sacrifices and relocate.

It’s impossible to say with any real conviction which states offer the best lifestyle for retirees since it’s such a subjective decision. Are you a big city person? Or do you prefer the quiet of a small town? Or maybe you’d prefer a secluded country retreat? Which states are the best states to live in is really going to depend on you.

Our take

There’s no definitive answer to the question of which states are the best ones for retirement. Everyone’s a little biased, anyways. Personally, my home state of Hawaii would be wonderful based on lifestyle, but from an affordability standpoint, Colorado, where I’ve been for nearly two decades, has many of the same lifestyle perks (believe it or not) with lower overall costs.

So, while this list is really for fun, it also can be a good place to start if you’re thinking of relocating to a lower-tax state. To see if it would make financial sense for you to relocate, check out the Empower Retirement Planner tool, which allows you to do scenario planning to see how it impacts your chances of a successful retirement.