6 States Where Retirement Costs Are Surprisingly High Today

Key Takeaways The most expensive states for retirement tend to have low relative affordability rankings and high tax rates. Some of the most expensive states levy taxes on (or don't offer tax credits for) Social Security and retirement income. Retirees who move to some of these states may also be on the hook for estate tax. More than half of all Americans-55%-are concerned that they won't be able to achieve a financially secure retirement, according to a study from the National Institute on Retirement Security. Furthermore, a 2024 AARP survey found that 20% of adults aged 50+ have no retirement savings at all. Maine is one of the most expensive places to retire, according to Investopedia's analysis.Sura Ark / Getty Images These studies support what many Americans already know: Most of us are financially unprepared for retirement. Some future retirees consider moving to an area with a lower cost of living and access to affordable healthcare. But where to go? We looked at data from Bankrate’s “Best and Worst States to Retire" 2024 list and combined it with the Tax Foundation's state tax burden ranking for 2022 to determine which states are the most expensive. We considered each state’s cost-of-living rank and tax-rate rank. From our analysis, we found six states that appeared in the top ten in both categories, making them the priciest options for retirement overall. Here's the roster, starting with the most expensive state. Important Tax rates are just one of the factors you should consider when deciding where to retire. When managing a fixed income, it's important to know how much you'll owe in taxes each year to plan accordingly. But every financial situation is different, so consider your bigger picture when evaluating this list. New York Affordability rank: 49 Tax rate rank: 50 State individual income tax: 4.0% to 10.9% State sales tax: 4.0% (average combined state and local sales tax of 4.53%) Estate/inheritance tax: Yes/No Although New York doesn't have the highest cost of living in the U.S., the state’s 15.9% total tax burden for 2022 is well above the national average. In fact, it's the highest in the country. The state collected $3,573 per capita in state and local taxes in 2022 (the highest amount in the country), and state and local governments collected about $3,359 per capita in property taxes. California Affordability rank: 47 Tax rate rank: 46 State individual income tax: 1.0% to 13.3% State sales tax: 7.25% Estate/inheritance tax: No/No California has the highest cost of living and ranks fourth in tax rates. The top tax rate for individual income is 13.3%, the highest among states that impose an individual income tax. Its 2022 tax burden is 13.5%, and the state collected $3,743 per capita in state and local taxes (the first on the list). State and local governments collect about $2,100 per person for property taxes. The state sales tax is 7.25% (the highest among the states mentioned here), and the combined rate in special city/county taxing districts can...

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