For many seniors, the idea of facing retirement is one that comes with a great deal of stress and trepidation. Reaching your financial goals for retirement can be an overwhelming prospect for any senior. The concept of a financially successful retirement can vary from individual to individual, and while every senior will have their own path to retirement, there are a few things that can make it even more challenging.
There are actually some states in the U.S. that are worse for retirement than others and states that actually can make it more difficult for seniors to achieve their retirement goals. There are some seniors that may already be retiring in these states, however, for those who are considering moving to these areas, they may want to think twice about moving to these states.
High cost of living, high taxes and expensive senior care services can all make it increasingly difficult for seniors to not only reach their retirement goals but continue to live the retirement lifestyle that they have always dreamed of. Many of these states also have a low percentage of seniors living in them due to the financial difficulties many of these seniors face.
Using the advanced SeniorScore™ tool, we have taken a look at how different states across the U.S. stack up in terms of their financial landscape and how easy or difficult they make it to retire. We have already ranked some of the best states in the country for retirement and are now taking a look at the five worst states in the U.S. for retirement finances. Here is how they stack up:
On paper, California may seem like a great place to retire, with its mild winters and warm sunny beaches. However, there is more to the Sunshine State than its weather. California is actually the number one worst state on our list for seniors who want to retire, based on the state's financial landscape.
California ranked in the bottom half of the country in our overall ranking of U.S. states for seniors, based on quality of life. Both property taxes and sales tax in California are higher than the national average, not to mention that the average state income tax for California is more than the average in the rest of the country. Californians face an extremely high unemployment rate and a cost of living that is much higher than the national average.
When it comes to paying for senior living expenses, California seniors can also expect a much higher annual cost than seniors in the rest of the country. Assisted living costs, adult daycare costs and home healthcare costs in California are significantly higher than they are in the rest of the state. Seniors, looking for nursing homes can also expect to pay around $10,000 more a year for this type of care in California.
Together these features have made California a very difficult place financially for seniors to retire. While it isn't impossible to reach a financially secure retirement in the state, adults should plan to face an uphill battle when planning for their financial future in California. This is may be why California has a lower percentage of seniors in their population then the rest of the nation.
2. Rhode Island
Rhode Island is another state that ranks in the bottom half of the country on our overall list of states ranked by their SeniorScore™. While there are issues with recreation and leisure and overall quality of life that caused Rhode Island to rank poorly, it is their financial landscape that makes this country one of the worst for seniors looking to retire.
One of the major issues comes with taxes, the property taxes and sale tax in Rhode Island is higher than the national average. Meanwhile, the state faces issues with an overall high cost of living and a high unemployment rate.
When it comes to affording senior care, residents of Rhode Island will need to plan ahead for expensive senior living services. The average assisted living community in Rhode Island costs around $63,900 per year, which is more than $20,000 more per year than the national average of $42,700. Nursing home costs are around $10,000 more a year in Rhode Island and home healthcare costs are also significantly higher than the national average.
With costs like this for those living in Rhode Island, it should come as no surprise that the state has a very low percentage of seniors who call this area home.
3. New York
When SeniorScore™ ranked its list of Top 10 Worst Cities for Seniors, New York made the cut. In fact, the state isn't just one of the worst states for seniors due to it's health and safety and recreation rankings, but it is also one of the worst due to it's finances.
The financial situation of New York has made it one of the most difficult states in the country for seniors to retire in. Property taxes and state income taxes in New York are very high when compared to the national average. Plus, property taxes average 5.15% of total income in New York, which is significantly higher than the national average of 2.79%.
Cost of living in New York is very high, which is perhaps one of the reasons why there isn't a large percentage of seniors living in the state. While assisted living and home healthcare costs are high, it is nursing home costs that will really cause retired seniors to penny pinch. While the cost of this type of care is around $92,481 per year in the rest of the country, it costs, on average a staggering $128,583 per year in New York. Adult daycare is also around $6,000 more per year in this state than it is in the rest of the country.
With numbers like this coming in from New York, it is easy to see why it made our list of worst states for seniors when it comes to retirement finances.
In Illinois, high property taxes, income taxes and sales taxes all add up for seniors looking to plan a financially successful retirement. All of these tax amounts are well over the national average, in a state that already has issues with high unemployment rates:
- Property taxes average 4.8% of total income in Illinois, which is significantly higher than the national average of 2.79%.
- Property taxes in Illinois are around 1.70% of the property value in Illinois but only around 1.09% for the national average.
- The average sales tax in Illinois is 8.63% which is significantly higher than the national average of 6.97%.
There are less seniors living in Illinois, than the national average of seniors in the population. This may have to do with the overall high cost of living in the area, or the high costs of senior care. Assisted living costs in particular are significantly more than the national average.
When it comes to the SeniorScore™ listing of all 50 states, based on how good they are for seniors, Illinois ranks in the bottom half.
Maine is another state that made the SeniorScore™ list of Top 10 Worst Cities for Seniors. Taking a look at the financial issues in the state, it should come as no surprise why this state was ranked among the worst in the country.
Property taxes in Maine are higher than they are in the rest of the country, while the average state income tax is also higher than the average of other states around the country. The average household income is lower than other states across the U.S., yet the cost of living is very high compared to the rest of the country, making it difficult for savers to reach their retirement goals.
Seniors can also expect to pay a lot more when it comes to their senior living expenses, with assisted living costs, nursing home care and home healthcare costs all being significantly higher in the state than they are in the rest of the country. However, it is adult daycare that is truly expensive for those living in Maine. While most of the country pays around $17,931 per year for this service, those in Maine pay around $28,771 every year for this care.
The finances in Maine can make it difficult for even the most diligent planners to reach their retirement goals.