The best state to retire in the United States is also one of the smallest, according to a new ranking.
Because of its high scores in affordability, access to high-quality health care, overall well-being and other categories, Delaware, known as the “First State,” earned the top spot in Bankrate’s annual ranking of the best states to retire in the U.S. In 2023, the state ranked No. 2, behind Iowa.
“Even if you don’t think of Delaware as a typical retirement haven, it has a lot of strong selling points for retirees,” Bankrate analyst Alex Gailey told CBS MoneyWatch.
Bankrate ranked states based on their scores on five key indicators: affordability, overall well-being, access to health care, weather and crime. Given its critical importance to most retirees, affordability outweighed other categories, accounting for 40% of each state’s overall score. Well-being accounted for 25%, access to quality health care for 20%, weather for 10% and crime for 5%.
“Delaware moved from second to first place on the affordability index. That’s the one that carries the most weight in terms of what’s happening in the economy, with the cost of living going up so much,” Gailey said.
In fact, food prices have increased dramatically Since 2019, Americans have spent more of their income on food than they have in 30 years. Home prices increased 5.3% from April 2023 to April 2024, according to a CoreLogic analysis in June. Car insurance has seen a significant increase 19.5% over one year in Juneshow the latest CPI data.
Americans also report being behind on their retirement savings. one in five workers According to Prudential Financial’s 2024 Pulse of the American Retiree survey, 55-year-olds have retirement savings of $447,000 or more. separate study A study on Generation X’s preparation for retirement found that half of those surveyed said they would need a “miracle” to retire.
Although the cost of living in Delaware is higher than the national average, the state scores well on other affordability indicators. For example, there is no state or local sales tax, and residents do not have to pay income tax for Social Security benefits.
Delaware’s racial and ethnic diversity and high proportion of residents aged 62 and older also helped propel it to the top of Bankrate’s list. The state also offers its residents access to high-quality health care, a key consideration for many retirees.
“Having access to good quality health care is very important in retirement because it is one of the biggest costs,” Gailey said.
The Worst US State to Retire In
Alaska, on the other hand, is ranked 50th. The state’s poor ranking is due to its poor scores almost everywhere, Gailey said.
Other poorly ranked states include New York (49), Washington (48) and California (47), all of which are penalized for their high cost of living.
“What these states have in common is that they are expensive to live in,” Gailey said. “In retirement, you have a fixed income and it can be destabilizing and stressful to see your retirement savings dwindle.”
See the full ranking here.
