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Thursday, June 08, 2023

Best U.S. states to retire in 2022

Best U.S. states to retire in 2022

map of U.S.

Key takeaways

It often makes financial sense to relocate in retirement, especially if your state has high taxes. Learn what are the best states to retire in 2022.

Paul Deer, CFP®


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.

Here’s a suggestion: You can understand the impact of retiring in minutes with Empower’s free Retirement Planner. With these online tools, you can anticipate big expenses (like buying a second house or sending kids through college), run different scenarios, and set a spending plan for retirement.

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 since the start of the pandemic. Still, some places started with high home and rent prices, and they’ve surged even higher. 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.

Healthcare costs

There are a lot of factors that influence a retiree’s healthcare costs, the least of which is location. A 2021 report from HealthView Services1 revealed that most retirees can expect their total retirement healthcare costs to fall between $156,208 and more than $1 million.

Costs that vary by state include Medicare Part D premiums, Medicare Advantage plans, Medigap premiums, and out-of-pocket spending. Massachusetts and Maryland are more expensive in these categories, according to the report, while Hawaii and New Mexico are less expensive, with some costs nearly 50% lower.


This is a big consideration throughout our lives, but when incomes 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 of.

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.


Are you looking for year-round sunshine? Or do you love to experience the seasons? Maybe two homes would better suit your snowbird tendencies. Whatever your preference, do your due diligence: Climate change is expected to have a major effect on popular retirement locales like Florida. The cost to insure a home2 in states with more climate risk factors is ever-increasing, so be sure to factor that into your plan.

The best states to retire in 2022

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. That way, we can account for both lifestyle considerations and which states make the most sense from a financial perspective. Obviously, this is really for fun, but it should give you a pretty good idea of some top options for retirees.

The top two states to retire in according to our formula are — drumroll please — Alaska and New Hampshire! Special mentions go to Delaware, Virginia, and Washington, which were all in the top 20 on both lists.

It’s interesting to see that low-tax states like South Dakota and Texas don’t make the top 10, or even the top 20 states with the most millionaires. We’ll be following to see if they make the list in future years, since these states generally offer good tax benefits.

Delaware is probably the biggest surprise on the shortlist (not a state you typically think of when it comes to the concentration of millionaires), followed by Wyoming and Florida not making the list given they are low-tax states and both offer great lifestyles. Florida is well-known for beachfront living, and if you’ve ever been to Jackson Hole, you’ll agree Wyoming is a lovely place.

Which states have the lowest tax burden?

Instead of looking at tax rates, which can vary depending on your specific circumstances, the “tax burden” number measures the proportion of total personal income that you’d pay towards state and local taxes.

To determine tax burden, we referenced Wallethub’s list3 that compares the 50 states across three types of state tax in 2022: property taxes, individual income taxes, and sales & excise taxes.



Total tax burden

Property tax burden

Individual income tax burden

Total sales & excise tax burden


























New Hampshire












South Dakota























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 percentage4 of millionaire households per total households as of 2019, the latest data available.



% of millionaire households


New Jersey


















New Hampshire











​​Does it make financial sense to relocate in retirement?

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 our free Retirement Planner tool, which allows you to do scenario planning to see how it impacts your chances of a successful retirement. 

1 Health View Services, "2021 Retirement Healthcare Costs Data Report," December 2020.

2 PolicyGenius, "Best and worst states for climate change," October 2022.

3 WalletHub, "Tax Burden by State," March 2022.

4 Kiplinger, "Millionaires in America 2020: All 50 States Ranked," May 2020.

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.


Paul Deer, CFP®

Paul Deer, CFP®


Paul is a CERTIFIED FINANCIAL PLANNER™ professional at Empower. With over a decade of industry experience, Paul’s current role as Vice President of Advisory Service at Empower keeps him focused on a team of financial advisors and their clients.

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Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 

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