Retirees looking for financial security might want to think twice about seeking warmer environs.
Wyoming, the state with the smallest population, is the best place to live out your golden years – that’s the result of a new study from the National Institute on Retirement Security. Close on its heels are Alaska, Minnesota and North Dakota.
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The report looked at different variables within three major categories including potential retirement income, retiree costs, and labor market opportunities. Interestingly, the study doesn’t take into account one factor important to many retirees: weather. That probably explains why California, South Carolina and Florida were at the bottom of the list. Illinois and Nevada also aren’t desirable destinations when it comes to economic pressures facing retirees, such as housing prices and out-of-pocket Medicare costs.
The study paints a detailed picture of how states have improved or worsened over the years by comparing the most recent figures, which are from 2012, to data from 2000 and 2007, the year the 18-month recession began. While Wyoming has remained in the highest echelon, Minnesota is one state that’s made great strides since 2000. Michigan, however, has moved in the opposite direction.
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That’s one reason Chuck Graham, 84, of Minneapolis decided to maintain his taxpaying residence there, even though he winters in Arizona, which is classified as “below average” in the study’s overall rankings. Still, the former University of Minnesota administrator said the housing situation in Green Valley, where he’s owned a home for 15 years, is one reason he spends time there. “There’s relatively modest-priced housing down here,” Graham said, adding that the cost of living “is not prohibitive for most middle-class communities.”
For older Americans who want to continue working, North Carolina should be avoided. Alaska, North Dakota and West Virginia have the best job prospects for people in age group, the study found.
“In many older households, we’re seeing work becoming a source of income,” said Diane Oakley, executive director of the National Institute for Retirement Security. “The savings piece is often tied to the work.”
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Oakley said that while one purpose of the study was to get future retirees and policymakers thinking about what improvements they can make, she also acknowledges that the report’s findings have their limitations. “I don’t know that we’re going to see a lot of retirees flocking to Fargo,” she said.
Overall, in terms of income – retirement account balances, tax rates for pensions and retirement plan participation rates in the workplace – South Dakota is the place to be.
This piece was updated at 5:30 p.m. on March 7, 2014.
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