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Planning retirement? We reveal the best states to retire, for a comfortable, budget-friendly lifestyle.

Best States to Retire on Fixed Income (2025)

Disclaimer: This website and its content are for informational purposes only and is not financial advice.

Let's explore some of the best states to retire on a fixed income in 2025, highlighting what makes them attractive to those carefully managing their retirement funds.

Florida: The Sunshine State's Appeal

Florida consistently ranks high among the best states to retire, and for good reason. Its lack of a state income tax means that Social Security benefits, pension income, and other retirement distributions are not taxed at the state level, allowing retirees to keep more of their hard-earned money.

While property taxes can vary by county, and home insurance costs should be factored in, the overall tax burden for retirees is generally favorable. Beyond the financial advantages, Florida offers a warm climate year-round, abundant recreational opportunities such as beaches and golf courses, and a vibrant senior community.

The state also receives significant funding per senior from the Older Americans Act, supporting various programs like homemaker assistance and transportation. When considering the best states to retire, Florida's blend of financial perks and lifestyle attractions makes it a top contender.

Minnesota: The Healthcare Hero

For those prioritizing excellent healthcare in their golden years, Minnesota stands out as one of the best states to retire. The state consistently ranks at the top for healthcare access and quality, boasting numerous top-tier hospitals and a high number of geriatricians per capita.

This focus on senior care translates into better health outcomes and peace of mind for retirees. While Minnesota does have a state income tax, its cost of living is generally below the national average, particularly for groceries, utilities, and transportation.

Housing costs, though slightly above average in some areas, remain relatively affordable compared to many other states. Despite its colder winters, Minnesota offers a high quality of life with abundant outdoor activities and a rich cultural scene, making it one of the best states to retire for those seeking robust medical support.

Colorado: The Rocky Mountain Retreat

Colorado presents an appealing option for retirees who value an active lifestyle and breathtaking natural beauty. While the cost of living can be higher in some popular areas, Colorado offers several tax advantages for retirees.

The state allows for deductions on certain retirement income, which can be beneficial for those on a fixed income. Colorado also excels in promoting health and wellness among its senior population, with a high percentage of physically active retirees.

The abundance of sunshine and opportunities for outdoor pursuits, from hiking to scenic drives, contribute to a high quality of life. For those seeking the best states to retire with a focus on an active and healthy retirement, Colorado merits strong consideration.

Updated May 29th, 2025

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Western Affordability: Wyoming and South Dakota

Wyoming and South Dakota are consistently recognized among the best states to retire due to their remarkable affordability and tax-friendly environments. Neither state levies a state income tax, which is a significant advantage for retirees on a fixed income.

Property taxes are also generally low in both states. While the overall population density is lower, offering a more tranquil pace of life, they provide ample outdoor activities and friendly communities. South Dakota, in particular, also ranks well for its healthcare quality, adding to its appeal.

These states are excellent choices for retirees looking to maximize their budget and enjoy a quiet, spacious environment, solidifying their position among the best states to retire for financial reasons.

Other Contenders for Best States on Fixed Income

Beyond these highlighted states, several others offer compelling reasons to consider them for retirement on a fixed income.

• Pennsylvania: This state is a strong contender for the best states to retire because it does not tax retirement benefits, including Social Security, pensions, and 401(k) withdrawals. The cost of living is generally affordable, and it boasts a good healthcare system.

• Delaware: Delaware stands out with no state or local sales tax and no tax on Social Security benefits, making it highly tax-friendly. It also offers good healthcare services and proximity to major cities, making it one of the best states to retire for tax advantages.

• Alabama: With a low adjusted cost of living and favorable tax policies, including no tax on Social Security benefits, Alabama offers a relaxed pace of life and Southern hospitality. It is consistently listed among the most affordable states to retire.

• Tennessee: Another state with no state income tax, Tennessee combines a low cost of living with a rich cultural heritage, making it an attractive option for retirees. Its tax-friendliness on retirement income is a key draw.

• Georgia: Georgia provides significant tax benefits, including no state income tax on Social Security and generous exclusions for other retirement income for those over 65. Its affordability and mild climate also make it a strong candidate for the best states to retire.

• Mississippi: As one of the states with the lowest cost of living and favorable tax treatment for retirement income, Mississippi offers a budget-friendly option, especially for those who dream of a coastal retirement.

Key Takeaways

Finding the best states to retire ultimately depends on your individual priorities and financial situation. Whether it's the warm climate and tax benefits of Florida, the superior healthcare of Minnesota, the outdoor adventures of Colorado, or the sheer affordability of Wyoming and South Dakota, there are numerous excellent choices for retirees on a fixed income in 2025.

Careful research into each state's tax laws, cost of living, healthcare infrastructure, and lifestyle opportunities will help you make the most informed decision for your golden years.

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