by Larry Gonzales

Retiring may be beyond the horizon for some of you but what you do today will have a tremendous impact on your ability to retire when you want to.  Owning a home now, in a place like Hawaii, where cumulative appreciation over time will help you tremendously in reaching the finish line of your career in the time you desire.  One thing to think about is where you retire.  I must admit, I did not have any clue where I wanted to retire when I was in my 20s and 30s (oh so many years ago).  But as I become more conscious of the retirement horizon looming, I began to look more closely at the 5 Ws of my retirement (Who, What, When, Where, Why). Here I'm going to talk a bit about the WHERE. Or more specifically, “where not.”


The following states might be perfectly pleasant places to live, but in terms of more practical benefits, they rank pretty low. Considerations in these states range from cold weather to high cost of living to poor medical facilities to high taxes to taxing your retirement income. To note, Hawaii is not on this list.  It is actually one of the best places to retire, despite the high cost of living – healthy lifestyle, weather, excellent and abundant medical facilities, and a big deal for me, my retirement income is not taxed.


So let's see some of the least favorable states to retire in!


1. West Virginia

  • Most retirement income is taxed after the first $8,000
  • Ranks low in retiree health, with only 57% of its population considered able bodied, compares to the national average of 65%.

2. Alaska

  • Harsh weather conditions coupled with a cost of living 32% above the national average makes Alaska unfavorable for retirees
  • However, there is no state income or sales tax!

3. Oregon

  • Oregon is pretty great - I actually do have family there and they absolutely love it! But even the one retirement-aged relative is still working.
  • High income taxes, cost of living at 18% above the national average, and an average household income of 16% lower than the national average might make retirees think twice about settling in this otherwise favorable state.

4. Minnesota

  • Like in Oregon, Minnesota has a higher cost of living coupled with below average income
  • The state taxes Social Security income and almost all other forms of retirement income, including military retirement pay. It also has a high sales tax.
  • It's COLD.

5. Kentucky

  • A high rate of smoking, poverty, and low physical activity, coupled with poorly rated nursing home care make Kentucky a risky place to live if you are not in total charge of your health.
  • However, the cost of living is low, and the first $41,000 of retirement income is not taxed and there is no tax on Social Security.
  • If you like bourbon, Kentucky might be the place for you.

6. Michigan

  • The state of Michigan has gotten a bad rep for not taking care of it's cities (e.g. Detroit and Flint). 
  • Soon, retirees will have to choose between having their Social Security taxed, or $20,000 of their retirement income.
  • Another brutally cold state! But the scenery is beautiful.

7. Montana

  • The cost of living is 3% above the national average, which might not seem like much until you consider that the average income is 21% below the national average.
  • Montana taxes most of your retirement income, plus has a top tax rate of 6.9% for anyone making over $17,400.
  • This might be a good option for snowbirds - the natural beauty of the state is something to marvel at!

8. New Mexico

  • Retiree poverty rate of 12% (the 3rd highest in the country).
  • Social Security and most other retirement income is taxed.
  • However, healthcare and overall cost of living are lower than the national average!


Original article: "Worst States to Retire" published 12 December 2018 on