N※N

Retirement on a Budget: Where Your Savings Stretch the Longest

  //business-finance.news-articles.net/content/202 .. dget-where-your-savings-stretch-the-longest.html
  Published in Business and Finance on Thursday, December 18th 2025 at 8:12 GMT by Investopedia

Retirement on a Budget: Where Your Savings Stretch the Longest

Retirement is a time to relax, travel, and enjoy the fruits of a lifetime of work. For many, the key to a comfortable second act is choosing a state that keeps the cost of living low, taxes minimal, and quality of life high. Investopedia’s recent analysis – “Top States for Retirees Who Want Their Savings to Last the Longest” – pulls together a wide swath of data to rank U.S. states by how friendly they are to the retirement‑savvy.

How the Rankings Were Built

Investopedia’s authors didn’t simply rely on anecdotal wisdom or a single metric. Instead, they combined five core data sources:

The authors created a composite score that weighted each factor roughly equally, then sorted the states from highest (most retirement‑friendly) to lowest. The result is a list that balances low taxes with high‑quality services – the perfect marriage for retirees who want every dollar to stretch.

The Top 10 Retirement‑Friendly States (2023)

Below is a quick rundown of the top ten states, with key stats and why they made the cut. All figures are rounded to the nearest whole number for readability.

A few things jump out:

1. Zero State Income Tax – Every state on the list has a 0% income tax on wages, the single most powerful lever for retirees.
2. Balanced Cost‑of‑Living – While Florida and Washington pull higher due to housing, states like Arkansas and Mississippi maintain very low COL indices.
3. Affordable Property Taxes – Even with higher COL indices, the property tax percentages stay under 2% for every state.

What Makes a State “Retire‑Friendly”

The Investopedia report explains the nuanced blend of factors that contribute to a state’s score:

1. Taxation
   * Income Tax: The most visible factor. Zero rates mean retirees’ pensions and Social Security are untouched.
   * Sales Tax: A lower sales tax reduces everyday expenses. Nevada’s combined state‑local rate of 8.1% is one of the lowest in the country.
   * Property Tax: Even in higher‑COL states, property tax remains manageable. Washington’s 0.95% ratio is a good example of a low tax burden on property income.

2. Housing Costs
   Housing is the single largest expense for retirees. Arkansas and Mississippi’s median home prices sit at roughly 60% of the national average, keeping mortgage or rental costs low.

3. Healthcare Access
   The AHA data used in the ranking shows each state’s hospital bed density and average out‑of‑pocket costs. Washington tops the chart, offering a high density of healthcare facilities per capita.

4. Cost of Living
   The C‑CORE COL index reflects everyday prices for groceries, transportation, utilities, and entertainment. States with indices under 100 are cheaper than the national average.

5. Climate and Lifestyle
   Although not directly measured in the ranking, the article notes that retirees often consider weather when choosing a location. Florida’s tropical climate and Texas’s diverse landscapes are highlighted as attractive for active retirees.

Deep Dives on Select States

Tennessee

• Why it matters: No state income tax, low housing costs, and an inexpensive healthcare system.
• Lifestyle perk: The Great Smoky Mountains and numerous retirement communities like Brainerd and Oak Ridge attract retirees who enjoy outdoor activities.
• Potential drawback: Tennessee’s 7.5% sales tax is one of the highest in the country, which can eat into savings for frequent shoppers.

Texas

• Why it matters: With a thriving economy, Texas offers excellent healthcare facilities in cities such as Houston, Dallas, and Austin.
• Lifestyle perk: The state boasts a variety of climates—from the dry plains in the west to the humid Gulf Coast—giving retirees a choice.
• Potential drawback: Property taxes can be higher in cities, and extreme heat in the summer can be a challenge for some retirees.

Florida

• Why it matters: The “Sunshine State” is a classic retirement destination thanks to no state income tax, a broad array of healthcare providers, and year‑round warm weather.
• Lifestyle perk: An extensive coastline with beaches, golf courses, and senior living communities make Florida a lifestyle haven.
• Potential drawback: The cost of living in the Orlando, Tampa, and Miami metro areas can be high, so retirees should weigh the trade‑offs carefully.

Washington

• Why it matters: The absence of a state income tax, combined with an abundance of healthcare facilities, makes it attractive.
• Lifestyle perk: Seattle and surrounding areas offer cultural amenities, but the state also has quiet, low‑density retiree communities like Olympia and the Puget Sound suburbs.
• Potential drawback: Housing costs are among the highest in the ranking, particularly in the Seattle metro.

Practical Take‑Away Tips for Retirees

1. Prioritize Income Tax – A zero income tax can double your retirement savings, especially if your pension or Social Security is a major income source.
2. Check Local Sales and Property Taxes – Even if a state has a zero income tax, high sales or property taxes can offset the benefit.
3. Factor in Healthcare – Look at hospital bed density and average out‑of‑pocket costs. States that perform well in this area reduce long‑term medical expenses.
4. Consider Climate Preferences – A mild climate may be a personal necessity. Make sure the state’s weather aligns with your health and activity preferences.
5. Look at Cost of Living Beyond Housing – Grocery, utilities, and transportation costs can vary wildly across states. A higher COL index might be offset by cheaper housing, but that balance must be evaluated for your personal spending habits.

Final Verdict

Investopedia’s 2023 “Top States for Retirees Who Want Their Savings to Last the Longest” offers a data‑driven guide for anyone planning to stretch their golden years. States that consistently appear on the list—Tennessee, Texas, Florida, Washington, and Nevada—share a common theme: zero income tax, balanced cost of living, affordable healthcare, and climate‑friendly options. By evaluating your own priorities against the composite score and state‑specific nuances, you can choose a location that maximizes your retirement savings while still providing the lifestyle you desire.