#1 South Dakota
99
- COLI: 88.6
- Income tax: 0%
- Property tax: 1.14% effective
- Social Security: Not taxed
- Median home: $285,400
- Avg high temp: 52°F / Avg low: 28°F
- Hospitals per 100k: 3.8
Best States to Retire in 2026
A composite ranking that weights what retirees actually care about: low cost, friendly taxes on retirement income, accessible healthcare, and a tolerable climate. Florida is still good, but it's not the obvious winner anymore.
Cost of living: 40%Tax-friendliness: 30%Healthcare access: 20%Climate: 10%
The 2026 ranking
Top 10 states for retirement
| Rank | State | Composite | COLI | Tax score | Health score | Median home | Tax notes |
|---|---|---|---|---|---|---|---|
| #1 | South Dakota | 99 | 88.6 | 95 | 91 | $285,400 | No income tax. No SS tax. |
| #2 | Wyoming | 99 | 92.7 | 100 | 89 | $298,500 | No income tax. No SS tax. |
| #3 | Tennessee | 98 | 91.9 | 100 | 78 | $298,500 | No income tax. No SS tax. |
| #4 | West Virginia | 95 | 89.5 | 75 | 94 | $145,600 | Income 2.11-4.58%. No SS tax. |
| #5 | Nevada | 94 | 100.0 | 100 | 74 | $435,600 | No income tax. No SS tax. |
| #6 | Arkansas | 93 | 86.9 | 75 | 84 | $192,800 | Income 2-3.9%. No SS tax. |
| #7 | Washington | 92 | 107.0 | 95 | 88 | $568,500 | No income tax. No SS tax. |
| #8 | Iowa | 92 | 87.8 | 65 | 96 | $208,700 | Income 3.8%. No SS tax. |
| #9 | Louisiana | 92 | 88.2 | 75 | 83 | $198,200 | Income 3%. No SS tax. |
| #10 | Kentucky | 92 | 90.2 | 65 | 92 | $198,500 | Income 3.5%. No SS tax. |
Top 5 deep dive
Why these states win
#2 Wyoming
99
- COLI: 92.7
- Income tax: 0%
- Property tax: 0.56% effective
- Social Security: Not taxed
- Median home: $298,500
- Avg high temp: 52°F / Avg low: 28°F
- Hospitals per 100k: 4.5
#3 Tennessee
98
- COLI: 91.9
- Income tax: 0%
- Property tax: 0.56% effective
- Social Security: Not taxed
- Median home: $298,500
- Avg high temp: 70°F / Avg low: 48°F
- Hospitals per 100k: 1.8
#4 West Virginia
95
- COLI: 89.5
- Income tax: 2.11-4.58%
- Property tax: 0.53% effective
- Social Security: Not taxed
- Median home: $145,600
- Avg high temp: 60°F / Avg low: 38°F
- Hospitals per 100k: 2.4
#5 Nevada
94
- COLI: 100.0
- Income tax: 0%
- Property tax: 0.48% effective
- Social Security: Not taxed
- Median home: $435,600
- Avg high temp: 72°F / Avg low: 47°F
- Hospitals per 100k: 1.1
Social Security treatment
States that tax Social Security
Most states don't tax Social Security at all. The states that do typically apply exemptions or partial taxation; check current state rules for your specific income.
| State | Income tax range | COLI |
|---|---|---|
| Colorado | 4.4% | 103.1 |
| Connecticut | 2-6.99% | 103.6 |
| Minnesota | 5.35-9.85% | 98.6 |
| Montana | 4.7-5.65% | 94.6 |
| New Mexico | 1.5-5.9% | 92.2 |
| Rhode Island | 3.75-5.99% | 102.3 |
| Utah | 4.5% | 98.9 |
| Vermont | 3.35-8.75% | 98.0 |
States to think twice about
Bottom 5 for retirees
High costs, high taxes on retirement income, or both. Not necessarily bad places to retire, but they require more assets to do comfortably.
| State | Composite | COLI | Why it ranks low |
|---|---|---|---|
| Connecticut | 76 | 103.6 | Taxes Social Security. High property tax. |
| New Jersey | 77 | 108.8 | High property tax. |
| Vermont | 79 | 98.0 | Taxes Social Security. High property tax. |
| California | 81 | 110.7 | |
| Illinois | 82 | 100.0 | High property tax. |
Frequently Asked
Retirement, answered
What are the best states for retirees?
Tennessee, Florida, and South Dakota top our composite ranking, which weights cost of living (40%), tax-friendliness for retirement income (30%), healthcare access (20%), and climate (10%). All three combine no state income tax, no tax on Social Security, and below-average cost of living. Wyoming and Texas round out the top five.
Which states do not tax Social Security?
42 states do not tax Social Security: most of the country. The states that still do, with various exemptions, are Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont. Many of those have phased out the tax in recent years; check current rules before assuming.
What's the cheapest state to retire in?
On price level alone it is Arkansas, at 86.9 on the BEA all-items parity against a national 100.0. This page ranks on more than price: the composite here also weighs income tax, the treatment of Social Security and retirement income, and healthcare access, and on that basis it favours South Dakota. Price and suitability are not the same question, and the cheapest state is rarely the top of a retirement list.
Is Florida still the best retirement state?
It's a strong choice but no longer obviously dominant. Florida has no income tax, no estate or inheritance tax, mild winters, and broad Medicare Advantage coverage. The catch: housing has risen sharply since 2021, hurricane insurance premiums have climbed, and Medicaid was not expanded, so the uninsured rate is high. For retirees on fixed incomes, Tennessee, Wyoming, and South Dakota now compete.
What states should retirees avoid?
Our bottom five are Connecticut, New Jersey, Vermont, California, Illinois. Hawaii is dramatically expensive. New York and California have high taxes on retirement income alongside elevated costs. Vermont has high property taxes and taxes Social Security. New Jersey has the highest property tax in the country. None are necessarily bad places to retire if your assets and lifestyle suit them, but they require more money to do well.