Podcast Center
Video Center
Webcasts
Resource Center
Events
October 13, 2015 at 07:39 AM
People fortunate enough to have stockpiled enough money to retire comfortably are likely considering where they might best spend their years of leisure so as not to deplete their dollars.
We’ve already taken a look at the 10 best states to retire rich, and thought, just for grins, it might be fun to have a gander at the 10 worst states for that purpose.
In other words, here’s where you shouldn’t retire unless you’re looking forward to being parted quickly from all that hard-earned money you’ve saved up.
We had a little (well, a lot of) help with this. The folks at GoBankingRates crunched the actual numbers, looking at several major drains on the retiree’s wallet that you’ll probably want to avoid if you can:
Taxes.
Taxes aren’t so small in these states — including estate, inheritance, property, sales tax, and even (especially?) the taxes they’ll hit you with on your Social Security check.
Local living expenses.
These include how much you’re liable to get soaked buying a place to live and how much the tax man will expect you to fork over in exchange for retaining the privilege of living there. The state’s cost-of-living index is important, as is the local deposit rate — how much interest you’ll get on all that moolah parked in the bank while you’re out fishing.
Health.
The final factor (and it is final, if it’s not good) is the question of health. How healthy are the seniors in these states, and how hard is it to get or stay healthy? How expensive is it, and how much will Medicare help you out?
By the time it’s all added up, here are the 10 places you don’t want to retire — the 10 worst, if you want to stay rich:
1. New York
The streets here are not paved with gold, unless you work on Wall Street. New York scores at the bottom of the heap on all three factors: taxes, living expenses, and health care. Here’s why.
Your insurance premiums for health care will be pricey in the Big Apple (and elsewhere in the state).
In fact, they’re the third-most expensive in the country. Only New Jersey and Massachusetts would cost you more. When you consider that Medicare payouts are way below average, you’re getting skimmed on both ends of the deal.
If you’ve got lots of dinero, you’ll get a good average deposit rate — New York’s is in the top 10. And you won’t have to pay taxes on your Social Security check or on any inheritance you might receive.
But that’s where the good news ends. You’ll be spending all that interest and savings and then some, and your money won’t stay in the bank very long, what with the high cost of living and extremely high home prices.
You keep paying for that home year after year, too, what with high property taxes, and every time you go to the store you’ll be paying lots and lots of sales taxes. Why do you think so many people cross into neighboring states to go shopping?
See also: Almost half of Americans know nothing about their benefits
2. New Jersey
And you thought it was all about The Sopranos. Well, fuggeddaboudit. Your checkbook will be feeling the pain.
You don’t want to retire here unless you’re actually looking forward to paying the highest average insurance premiums in the country, in exchange for Medicare payments that are below average.
You’ll get soaked on the cost of health care and on your property taxes (oh, those property taxes!); pay for an otherwise high cost of living (not quite as bad as New York, true) and you’ll have to be masochistic enough to be willing to pay some of the highest estate and inheritance taxes in the country, should you be fortunate enough to inherit anything.
You not only can’t take it with you, you can’t keep it once you get it.
The good news? No tax on Social Security benefits.
Considering the big picture, big deal.
See also: Top 5 states with the highest state debt
3. Illinois
Average cost of living, but below-average deposit rates — sixth lowest in the country, in fact. But don’t worry, your money won’t be there long enough to worry about it.
And Illinois boasts a number of other discouraging stats. There’s poor health care, coupled with expensive insurance premiums, and low average Medicare payments.
And it may not tax Social Security or inheritances, but you’ll make up for it in property taxes and sales taxes.
See also: Chicago faces record tax increase as pensions compound deficit
4. Connecticut
You can stay healthy in the Nutmeg State, thanks to relatively affordable health care, although insurance premiums are high.
But Medicare payments are high, too, so it’s not terrible. And Connecticut residents are ranked as the sixth healthiest in the country, which is good.
But surely you didn’t think you were going to get to keep your money?
Everything, pretty much, gets taxed here: Social Security, estates (though not inheritances), high sales taxes — and the cost of living is high to begin with. Then there are high housing costs and high property taxes.
