Is Florida still the best place to retire? Could North Carolina, South Carolina, Tennessee, Mississippi, or another state provide a better combination of affordable living, favorable taxes, healthcare access, comfortable weather, and quality of life?
The answer depends on much more than whether a state charges income tax. A state with no personal income tax may have higher homeowners insurance, property taxes, housing costs, utility bills, or sales taxes. A state that collects income tax could still leave you with lower total annual expenses.
In this edition of Ask Mike, Mike Minter of Mintco Financial explains how retirees can compare states based on the expenses and lifestyle factors that may have the greatest effect on their financial security.
Is There One Best State for Every Retiree?
Mike: No. A state that is ideal for one household may be a poor fit for another. Your best choice depends on your income sources, housing needs, health, family relationships, hobbies, preferred climate, insurance costs, and how you expect to spend your time.
Someone with a large pension or traditional IRA may place greater importance on state income taxes. A homeowner near the coast may be more concerned about property insurance and storm exposure. A retiree managing a chronic medical condition may prioritize access to specialists and major hospitals.
Instead of choosing a state from a national ranking, calculate what retirement would realistically cost for your household in each location.
What Expenses Should Retirees Compare?
Mike: Begin with a side-by-side annual budget that includes:
- Housing payments or expected home-purchase price
- Property taxes
- Homeowners, flood, wind, and hurricane insurance
- Homeowners association or community fees
- State income taxes
- Sales and local taxes
- Electricity, heating, water, and internet
- Automobile insurance and registration
- Healthcare and prescription costs
- Medicare premiums and supplemental coverage
- Travel expenses for visiting family
- Golf, club, recreation, and entertainment costs
- Home maintenance and future repairs
- Long-term-care options
The calculation should include recurring expenses and major future costs. A house may appear affordable until you add insurance, roof replacement, community fees, utilities, and property maintenance.
Do Not Compare States Using Income Tax Alone
The best retirement state is usually the one that provides the most suitable combination of total cost, reliable healthcare, financial flexibility, personal safety, family access, and the lifestyle you will actually enjoy.
Is Florida the Best State for Retirement?
Mike: Florida remains attractive because it does not impose a personal state income tax. This may benefit retirees receiving pensions, taxable retirement-plan distributions, investment income, or substantial earned income.
Florida also offers warm winters, numerous retirement communities, major airports, extensive healthcare systems, beaches, golf, and recreational opportunities.
However, Florida should not automatically be considered the least expensive choice. Depending on the location and property, retirees may face high homeowners insurance, automobile insurance, property taxes, association fees, storm-related deductibles, housing costs, and summer electricity bills.
Florida may be a strong fit when the tax and lifestyle advantages outweigh those other expenses. The comparison must be made using your actual expected budget—not a general statewide average.
Could North Carolina Be Better Than Florida?
Mike: North Carolina may appeal to retirees who want four seasons, access to mountains and beaches, major healthcare systems, golf communities, and housing options outside the largest cities.
North Carolina has a state individual income tax, so a retiree moving from Florida should calculate that added expense. However, lower homeowners insurance, automobile insurance, property taxes, housing costs, or recreation expenses in a particular North Carolina community may offset part or all of the state income tax.
Communities frequently considered by retirees include Pinehurst, Southern Pines, Raleigh, Cary, Wilmington, Charlotte, Asheville, Hendersonville, and areas surrounding major lakes.
North Carolina can be especially attractive for retirees who want a balance between moderate weather, healthcare access, outdoor recreation, and lower property-related expenses than certain parts of Florida.
What Makes South Carolina Attractive?
Mike: South Carolina offers coastal, lake, city, and foothill communities. Popular destinations include Greenville, Myrtle Beach, Bluffton, Hilton Head Island, Charleston, Columbia, and communities around Lake Murray.
South Carolina collects individual income tax, but qualifying residents may have access to retirement-income deductions and additional deductions beginning at age 65. The actual benefit depends on age, income sources, and current tax rules.
Housing and property costs can be attractive in some inland areas. Coastal retirees should carefully evaluate homeowners insurance, flood insurance, wind exposure, evacuation considerations, and homeowners association fees.
Is Tennessee a Good Choice for Retirees?
Mike: Tennessee does not currently impose a broad personal state income tax. That can be attractive for retirees with substantial taxable retirement or investment income.
The state also offers mountain scenery, lakes, music, outdoor recreation, and communities with different cost levels. Popular retirement areas include Knoxville, Chattanooga, the Tri-Cities, Crossville, Tellico Village, Franklin, and communities outside Nashville.
Tennessee has relatively high sales taxes, and housing costs can vary considerably. Nashville and some surrounding communities may be far more expensive than rural or eastern parts of the state.
A retiree should also compare healthcare access carefully. Living in a beautiful rural area may create longer travel times to hospitals and specialists.
How Do Popular Retirement States Compare?
| State | Potential Advantages | Expenses to Examine |
|---|---|---|
| Florida | No personal state income tax, warm winters, extensive retiree services, beaches and golf | Home and auto insurance, housing, storm exposure, property taxes and association fees |
| North Carolina | Mountains, coast, four seasons, healthcare systems, golf and diverse communities | State income tax, location-specific housing costs, mountain or coastal risks |
| South Carolina | Retirement deductions may apply, mild climate, coast, lakes and growing retiree communities | State income tax, coastal insurance, hurricane exposure and community fees |
| Tennessee | No broad personal state income tax, mountains, lakes and several lower-cost regions | Sales taxes, healthcare access in rural areas and rising prices near popular cities |
| Mississippi | Lower overall price levels, affordable housing in many areas and warmer weather | Healthcare access, storm exposure, local employment and proximity to major airports |
| Arkansas | Low overall cost levels, lakes, mountains and affordable communities | Healthcare access, state taxes, transportation and distance from family |
The comparisons above are general observations, not guarantees. Taxes, insurance costs, housing prices, and available services vary by household, property, county, and municipality.
Which State Makes Financial Sense for You?
Ask Mike to help you compare total living costs, retirement taxes, housing, insurance, income needs, investments, Medicare, and long-term financial goals.
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Which States Have the Lowest Cost of Living?
Mike: Several Southern and Midwestern states frequently have lower overall price levels than the national average. Mississippi, Arkansas, Iowa, Oklahoma, and West Virginia can offer lower housing or general living costs in many communities.
Lower cost does not automatically mean better retirement quality. Retirees should confirm access to hospitals, specialists, airports, reliable internet, recreational activities, and family support.
A lower-priced home located far from medical care or family could create costs and difficulties that were not visible in the initial calculation.
Which Taxes Matter Most in Retirement?
Mike: The importance of each tax depends on your financial situation. Review:
- Taxation of pension income
- Taxation of traditional IRA and 401(k) withdrawals
- State treatment of Social Security benefits
- Property taxes and senior exemptions
- Sales and local-option taxes
- Taxes on investment income
- Estate or inheritance taxes
- Taxes on business or rental income
- Automobile and personal-property taxes
A retiree living primarily on Social Security may reach a different conclusion from someone receiving substantial pension, business, or IRA income.
How Important Are Homeowners Insurance Costs?
Mike: Insurance can materially change the affordability of a retirement location. Premiums and deductibles may be higher in places exposed to hurricanes, flooding, wildfires, hail, or severe storms.
Before buying a home, obtain actual insurance estimates for that address. Do not assume the seller’s current premium will apply to a new owner.
Also review the age and condition of the roof, electrical system, plumbing, heating and cooling equipment, windows, drainage, and nearby trees. These items may affect insurability and future repair costs.
Should Healthcare Decide Where I Retire?
Mike: Healthcare access should be one of the most important considerations, especially for retirees managing chronic conditions or expecting specialized care.
Check the distance to:
- Primary-care physicians
- Major hospitals
- Cardiology and cancer centers
- Rehabilitation services
- Pharmacies
- Urgent-care facilities
- Long-term-care communities
- Airports with convenient access to family
Also verify whether your doctors and preferred medical facilities participate in your health or Medicare plan.
Should I Rent Before Buying?
Mike: Renting temporarily can be a smart way to test a community before committing to a permanent home.
Spend enough time there to experience traffic, weather, healthcare access, community activities, shopping, airport travel, and daily life. A town that is enjoyable during vacation may feel very different as a permanent residence.
Renting can also give you time to study neighborhoods, insurance costs, property taxes, homeowners associations, and future resale demand.
Could Keeping Two Homes Be More Expensive Than Expected?
Mike: Yes. Maintaining two homes can require two sets of property taxes, insurance policies, utilities, repairs, landscaping, security systems, transportation expenses, and possibly community memberships.
A seasonal arrangement can provide flexibility, but calculate the complete annual cost. Also consider residency rules, tax filing, homestead benefits, vehicle registration, insurance, and where you spend most of the year.
How Can I Compare Two States Accurately?
Mike: Create a ten-year projection rather than comparing only one year. Include:
- Annual living expenses
- Expected inflation
- State and federal taxes
- Insurance increases
- Property appreciation assumptions
- Roof, heating and cooling, and major repairs
- Mortgage costs or investment income from home-sale proceeds
- Club and recreation expenses
- Healthcare and long-term-care costs
- Travel to visit family
- Potential moving and closing costs
Then compare the financial result with the lifestyle difference. Saving money does not help if the location makes you unhappy, isolated, or unable to receive suitable healthcare.
What Is Mike’s Final Answer?
Mike: There is no universal best state. For some retirees, Florida’s absence of personal income tax and warm climate may make it the strongest option. Others may save more overall in North Carolina despite paying state income tax because housing, insurance, and property expenses can be lower.
South Carolina may provide a balance of retirement tax provisions, mild weather, and lower-cost inland communities. Tennessee may appeal to retirees who want no broad personal income tax and access to mountains and lakes. Mississippi or Arkansas may work for someone prioritizing low housing and everyday expenses.
Your best state is the one that supports your income, protects your savings, provides suitable healthcare, keeps you connected to the people you love, and offers a lifestyle you can comfortably maintain for many years.
Ask Mike: Where Should You Retire?
Considering Florida, North Carolina, South Carolina, Tennessee, or another state? Ask Mike about comparing retirement taxes, housing costs, insurance, investments, Medicare, Social Security, and long-term income.
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Educational Sources
Cost-of-living comparisons may be researched through the U.S. Bureau of Economic Analysis Regional Price Parities:
BEA Regional Price Parities
.
State tax information should be verified directly with the applicable state revenue department:
Important disclosure: This article is provided for general educational purposes and is not intended as individualized investment, insurance, tax, accounting, real-estate, or legal advice. Taxes, insurance costs, housing prices, deductions, retirement rules, and product availability can change. Consult qualified tax, legal, insurance, and real-estate professionals before changing residency, selling property, or making a retirement decision.