The best states to retire (early) in

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A new study by personal finance tech firm SmartAsset has revealed the best U.S. states in which to take an early retirement. Using its retirement income tax calculator, SmartAsset simulated more than 600 different tax scenarios in each state to determine effective income tax rates for retirees ages 55 to 64. The firm also factored in cost of living and the concentration of arts, entertainment and recreation establishments, among other factors.

Highlights among the SmartAsset findings include:

0 percent effective income tax: States that do not tax retirement income were more likely to make the top 10 list.
The Great Outdoors: States with attractions and activities appealing to outdoor adventure-loving early retirees placed well.
Whistling Dixie: More than half of the top 10 is comprised of Southern states.


More on the SmartAsset study, including full methodology and rankings, can be found at https://smartasset.com/retirement/the-best-states-for-an-early-retirement-2016-edition.

Source: SmartAsset
Posted 12 December, 2016

10. New Mexico (tie)

A haciend-style Southwestern house in Coralles, New Mexico
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"New Mexico is tied with Nevada as the 10th best state for an early retirement. New Mexico ranks well in the cost of living measures. It has the second-lowest average health-care expense, at $5,200 per year, as well as the 10th-lowest average housing cost, at $9,300 per year. A potential drawback to retiring early in New Mexico is the lack of doctors' offices. According to data from the Census Bureau, New Mexico has only 4.7 doctors' offices per 10,000 residents, which ranks 43rd in the nation."

Source: SmartAsset

10. Nevada (tie)

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"High rollers may be pleased to see Nevada crack our top 10. Nevada offers a 0 percent effective tax rate on income and has the sixth-most doctors' offices per resident, meaning help is never far away. Living costs in the Silver State can be fairly steep though, including a combined $20,000 per year on housing and health-care costs on average."

Source: SmartAsset

9. Louisiana

Entrance to French Market, New Orleans, Louisiana.
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"Louisiana has a lot to offer as a state for an early retirement. The third-lowest property taxes, seventh-lowest housing cost, ninth-lowest non-housing cost of living and eighth-highest rate of doctors' offices in the country are all on offer for people looking to retire in Louisiana. Unfortunately, Louisiana is not a utopia for early retirees. There are relatively few arts, entertainment and recreation establishments per 100,000 residents and it has one of the highest sales tax rates in the country."

Source: SmartAsset

8. Texas

A historic house, circa 1905, near downtown Dallas, Texas.
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"Texas has a little bit of everything, meaning just about anyone can find themselves at home there. The Lone Star State has no income tax and the non-housing cost of living is low. The average cost of an annual silver health-care plan in Texas is $6,626. That's the 14th-lowest. However housing costs can get pretty high relative to everything else. The average Texan pays $11,600 per year in housing costs. "

Source: SmartAsset

7. Pennsylvania

Philadelphia, Pennsylvania
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"Like many in the top 10, Pennsylvania is another state which does not tax retirement income, which makes it a great option for an early retirement. Pennsylvania also has the 10th-lowest average health-care costs in the country. The average cost of a silver health-care plan in Pennsylvania is only $6,500 per year."

Source: SmartAsset

6. Florida

Fort Lauderdale, Florida.
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"The state that is famous for its retirees and bad drivers comes in sixth place for best states for an early retirement. Florida ranks well because of its 0 percent income tax rate and the 9.15 doctors' offices per 10,000 residents. But living costs in Florida can get pretty high. Average housing costs are almost $12,000 per year and the non-housing cost of living sits at 102 which rank 30th and 31st respectively."

Source: SmartAsset

5. Tennessee

Couple prepare their small boat to row down the Little Tennessee River as dawn mist lifts at dawn on August 25, 2014 near Gatlinburg, Tennessee, USA.
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"The Southern theme continues with Tennessee claiming the fifth spot for best states for an early retirement. Tennessee is another state with a 0 percent effective income tax which is only partly offset by the nation's highest average state and local sales taxes at 9.5 percent. Tennessee also has 6.55 doctors' offices per 10,000 residents and 36 arts, entertainment and recreation establishments per 100,000 residents. "

Source: SmartAsset

4. South Dakota

Man riding bike in Badlands National Park, South Dakota.

"The Mount Rushmore State is another great option for an early retirement. Other than the gorgeous scenery, South Dakota can offer potential early retirees a 0 percent effective income tax and some of the lowest housing costs in the country, at $8,900 per year on average. Besides gazing at Mount Rushmore, there are plenty of things to do. There are 79 arts, entertainment and recreation establishments per 100,000 residents — the second-highest in the nation."

Source: SmartAsset

3. Mississippi

Bay Saint Louis is a city that is the county seat of Hancock County, Mississippi.
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"Mississippi is the second-highest-rated Southern state and third-highest overall for best states for an early retirement. Mississippi is similar to Kentucky in that it is a cheap place to retire. It has a 0 percent effective tax on retirement income. It also has the lowest non-housing cost of living as well as the second-lowest housing costs in the nation. So why isn't it first or second? There are only 22 arts, entertainment and recreation establishments per 100,000 people — the lowest in the nation. There are also not as many doctors' offices in Mississippi as there are in other states. Our data shows that it ranks 33rd in this measure."

Source: SmartAsset

2. Kentucky

Kentucky Countryside
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"The Bluegrass State comes in a close second, thanks to six metrics scoring in the top 20 and its tax-friendly environment. Particularly attractive for prospective early retirees are the low costs of living. Kentucky ranks fourth in average housing costs per year at $8,600 and fifth in non-housing cost of living. But early retirees in Kentucky may need to develop some personal hobbies. According to data from the Census, there are only 28 arts, entertainment and recreation establishments per 100,000 residents, 44th best in the country. "

Source: SmartAsset

1. Wyoming

Crowd awaits Old Faithful's erruption in Yellowstone National Park, Wyoming.

"Wyoming jumps two places from last year to take the top spot in our study of best places for an early retirement. This state offers an effective tax rate of 0 percent on retirement income and has the third-lowest non-housing cost of living. To go with the relatively cheap living costs, Wyoming also has 73 arts, entertainment and recreation establishments per 100,000 people. That score ranks fifth in that metric. What hurt Wyoming (although not enough to prevent it from snagging first place) is the relatively high average health-care costs. Wyoming ranks second to last in this measure paying an average of $11,000 per year. Only Alaskans pay more."

Source: SmartAsset

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