2023's Best & Worst Places To Retire

Only 27% of workers reporting that they are “very confident” they will have enough money for retirement

After putting in decades of hard work, we naturally expect to have financial security in our golden years. But not all Americans can look forward to a relaxing retirement. According to the Employee Benefit Research Institute’s 2023 Retirement Confidence Survey, 64% of workers reported feeling at least somewhat confident that they will have enough money to retire comfortably, but only 27% said they were “very confident.”

If so many American workers are worried about their financial future, what other options provide a pathway to a comfortable retirement? For some, the only solution is to keep working. According to Gallup polling, workers in 2022 planned to retire at age 66 on average, compared to age 60 in 1995. The alternative? Relocate to an area where you can stretch your dollar without sacrificing your lifestyle.

Retirement isn’t all about the money, though. Retirees want to live in a place where they enjoy safety and access to good healthcare, especially in the wake of the COVID-19 pandemic. The ideal city will also have lots of ways to spend leisure time, along with good weather.

To help Americans plan an affordable retirement while maintaining the best quality of life, WalletHub compared the retiree-friendliness of more than 180 U.S. cities across 45 key metrics. Our data set ranges from the cost of living to retired taxpayer-friendliness to the state’s health infrastructure.

Best vs. Worst

• Pearl City, Hawaii, has the highest share of the population aged 65 and older, 25.50 percent, which is 3.2 times higher than in Irving, Texas, the city with the lowest at 8.00 percent.
• Brownsville, Texas, has the lowest adjusted cost-of-living index for retirees, 75.39, which is 2.4 times lower than in Honolulu and Pearl City, Hawaii, the cities with the highest at 182.16.
• Plano, Texas, has the highest share of workers aged 65 and older, 26.73 percent, which is 2.4 times higher than in Gulfport, Mississippi, the city with the lowest at 11.10 percent.
• St. Louis has the most home health care facilities (per 100,000 residents), 79.26, which is 28.8 times more than in New York, the city with the fewest at 2.75.

Expert Commentary

What financial factors should retirees take into consideration when deciding where to retire?

“There are a number of factors, including cost of living factors such as housing. One big one is whether the state taxes Social Security. Two important factors that are not considered that much are access to medical facilities and social support networks. Many retirees choose semi-rural communities that are cheaper, but the trade-off is that medical care may be less available, more expensive, and require driving long distances. It is very important to make certain that your medical insurance will cover expenses in that area…I have heard of cases where retirees unexpectedly lose coverage but would have been able to keep it if they lived a block away. Access to social support networks is also critical. Any COL savings may be offset by expenses required to visit family. Many of the young (65–79) move to warmer climates but end up moving back to be closer to families in their 80s, when they may start needing more assistance.”
Carolyn M. Aldwin, Ph.D. – Professor Emerita, Oregon State University

“Any item on the budget would be good to consider. For example, taxes especially state income tax, property tax, sales tax, and excise tax. Additionally, consider the cost of living such as healthcare, food (including groceries and dining out), housing (including retirement communities, assisted living, and nursing facilities), utilities, services such as home and auto maintenance as well as lawn care and pest control, transportation, communication, entertainment, and travel (proximity to a major airport).”
Rui Yao, Ph.D., CFP^® – Professor; Director of Graduate Studies, Personal Financial Planning, University of Missouri

What is the biggest mistake that people make when planning their retirements?

“A big one I see is expecting to overcome savings shortfalls by working longer. Sadly, how long you work (or in what position or capacity) is not always up to you. There are various factors that can force you into early retirement: health (for you or a loved one), company layoffs or acquisitions, changes in job requirements and responsibilities, etc.”
Seth Priestle – Adjunct Instructor, University of Cincinnati

“Retiring too early, getting less social security, having less time to contribute to their retirement funds, and not anticipating increased medical costs.”
Carolyn M. Aldwin, Ph.D. – Professor Emerita, Oregon State University

What percentage of income should you aim to replace in retirement?

“The ‘top-down’ strategy is particularly effective for individuals who are more than five years away from retirement. This method suggests replacing a specific percentage of your current gross income during retirement, with many people aiming for a 60% to 80% income replacement ratio. However, as you near retirement, adopting a ‘bottom-up’ approach becomes increasingly advantageous. This entails assessing your anticipated retirement lifestyle and developing a budget based on those specific needs and desires.

It is worth noting that in practice, many retirees tend to spend based on the income streams they have in place – like Social Security benefits, annuities, and interest payments – rather than actively drawing down their portfolios. This behavior is often driven by a psychological reluctance to see their net worth decline over time. Both planning approaches are valuable, but understanding the psychological factors that influence spending can offer a more nuanced and effective retirement strategy.”
Colin M. Slabach Ph.D. CFP^® – Clinical Assistant Professor; Faculty Lead for the Masters in Financial Planning program, New York University

“It is highly dependent on individual goals and circumstances. Eighty percent is the rule of thumb that many have heard of. Although I don’t disagree, it is a good place to start. No two households are the same, and retirement is too important a decision to apply a generic rule of thumb.”
Rui Yao, Ph.D., CFP^® – Professor; Director of Graduate Studies, Personal Financial Planning, University of Missouri