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5 Unexpected Best States to Retire In

When determining the best U.S. states to retire in, there’s a lot to factor: cost of living, the tax code, housing affordability, public transit options, infrastructure, low-cost health care options, plentiful amenities, low crime rates, and so much more.

A recently offered list names the top 5 states for today’s active seniors, but the winning destinations may not be what you would expect (Neither Florida or Arizona made the list!).

The top 5 states to retire in according to USA Today, using research from Kiplinger’s, SmartAsset and BankRate.com, are:

South Dakota

A sparsely populated Midwestern state where business costs fall 17% below the national average and are third lowest in the U.S. It has low costs and quality healthcare, according to USA Today. Also worth mentioning, South Dakota is home to Mount Rushmore.

Sioux Falls, its largest city, has a growing number of hospitals specializing in eldercare, landing it the second best city to retire in, according to Kiplinger’s Best Cities for Aging report.  Housing prices are above average for small metros.  


The cost of living is lower than the national average and affordable housing is plentiful (fourth lowest housing costs in the U.S.!), according to a SmartAsset analysis. For retirees needing to tap into their 401(k) or IRA early on, the state allows penalty-free withdrawals starting at age 59 ½.

The Bluegrass State offers a moderate climate and diverse landscapes. For seniors with a knack for hiking, golfing, fishing or simply enjoying the view, Kentucky may be worth a look.


·          Wyoming

An attractive tax environment and low crime rates are among the advantages of retiring in this mountain region state. Wyoming’s combined state and local sales tax rate is just 5.83%, placing it among the top 10 lowest in the nation, according to a 2015 study by Tax Foundation. It also ranks among the top 5 states with the lowest crime rates. 

Famed for Yellowstone National Park and with 62,448 total residents, it also the least populous state. 


The Old Dominion boasts a state income tax rate below the national average (ranked the 11th lowest by Smart Asset) and some of the best public transit and healthcare in the U.S.

For seniors still in the labor force, it may be advantageous to consider Virginia, where one in 5 people over the age of 65 are still working. 



Possibly the least expected state on the list due to its median age of 29.2 years, well below the 37.2 median in the rest of the U.S., Utah may be ideal for retirees who enjoy a youthful, active atmosphere. Also below the national average are healthcare costs and cost of living, according to Kiplinger research.

Salt Lake City, UT is ranked #5 in the Best Cities for Aging for its solid financial infrastructure, vibrant economy, abundant healthcare facilities and professionals, and access to banks and groceries. The downfall? Utah is one of 13 states that tax Social Security income.