Move over Florida and California — the Hawkeye State may be the new golden child as the top state to retire.
A new study from Bankrate ranks all 50 U.S. states when it comes to affordability, overall well-being, healthcare quality/cost, weather and crime, and Iowa rates at the top if the list. With soaring inflation and a volatile stock market, affordability was given the most statistical weight, with the others decreasing respectively.
Iowa is the best state in which to retire, the study found, thanks to its affordability (3), quality/cost of health care (11) and crime (12).
“Choosing where to retire is deeply personal, but Iowa’s affordable cost of living, inexpensive but high-quality health care and low crime make it a compelling option for retirees looking to stretch their retirement income in this economy,” said Bankrate analyst Alex Gailey. “In our overall ranking, the best and worst states for retirees are split geographically. The Midwest and the South claim the top five states, while the Northeast and West claim the bottom five states, primarily because of the differences in cost of living.”
For some residents nearing retirement in Alaska – ranked 50 out of 50 – New York (49), California (48), Washington (47) and Massachusetts (46), a move toward the middle of the country could pay off, Bankrate’s findings suggest.
While all five of the least favorable states scored poorly when it came to affordability, Alaska also ranked last for weather and 49th for crime.
Why Iowa?
With its vast farmlands, peaceful countryside and friendly locals, Iowa offers a unique retirement experience for many Americans seeking a more relaxed and affordable lifestyle with access to the outdoors and retirement-age communities, Bankrate said.
Iowa’s affordability is a big draw for retirees. Iowa is the sixth cheapest place to live in the U.S., according to the Council for Community and Economic Research, which is a huge advantage for retirees on a fixed income. Lower housing costs also helped prop the Hawkeye state up to the No. 3 spot for affordability. Iowa’s median home price is $239,400, per Redfin data — well below the nationwide median home price of $388,800. Homeowners insurance in Iowa is also below the national average.
Iowa lands near the middle of the pack tax-wise. The state ranks No. 23 for property taxes and No. 22 for state and local sales tax. Iowa also doesn’t tax Social Security benefits, and Iowans age 55 and older are exempt from paying state taxes on retirement income for tax year 2023. The state also topped our ranking for its high-quality healthcare services and low healthcare costs.
If you’re looking for retirement-age friends, you’ll have a good chance of finding them in this state as well, where nearly 20 percent of the population is age 65 and older, Census data shows.
Meanwhile, for potential retirees seeking a cultural melting pot and warm weather, Iowa may not be a good choice. It ranks poorly for racial and ethnic diversity, and its community well-being index is subpar. It also is generally colder in Iowa and has a high incidence of tornadoes, which may not be appealing for many retirees.
To see the entire study, click HERE.
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