Cost of living : 3 percent above U.S. average
Population : 1.09 million
Best city : Glasgow
PROS: A cold but majestic state, Montana is the home of natural wonders like Yellowstone and Glacier national parks. Big Sky Country has one of the highest populations of seniors in the United States.
CONS: Montana may be beautiful, but retirees may not always have an easy time living there. With income levels below average and most retirement income including Social Security taxed. Plus, if you are not a nature lover, you may find Montana downright boring. Don’t forget to take your lifestyle into account before making this important decision.
Cost of living : 12 percent below U.S. average
Population : 10.2 million
Best city : Farmington
PROS: Michigan is appealing for retirees due to its low poverty rate and extremely low cost of living. The Great Lakes State also doesn’t tax Social Security benefits. If you love water sports or just looking at some beautiful scenery, you can enjoy the Great Lakes during spring and summer.
CONS: Michigan went through some tax changes which made things tricky for retired folks. Residents who are 67 and over have to choose between deducting Social Security income or a set amount from all their income sources: $20K for singles, $40K for couples.
Cost of living: 18 percent above U.S. average
Population: 4.27 million
Best city: Gold Beach
PROS: Oregon offers seniors slightly lower healthcare costs than other states, 2.6 percent lower than the national average. It also offers a multitude of outdoor activities for active pensioners to enjoy, if they don’t mind the rain. There sure is a lot of it during the eight-month long rainy season.
CONS: Oregon is not a very tax friendly state. Social Security is not taxed, but most other retirement income is. The state also has one of the highest state income taxes – 9.9 percent. Plus, the average income for seniors is on the low end, just over $45K.
Cost of living : 4 percent below U.S. average
Population : 12.78 million
Best city : Leland Grove
PROS: The fiscal standing of the state of Illinois has been on a downward trend for some time. The upside of that is that the cost of living is below the national average, which could make it affordable for retirees. The small town of Leland Grove was rated as the best place to retire in Illinois by Niche. It has a suburban feel, but also offers many restaurants and coffee shops.
CONS: Unfortunately, the state’s financial standing has earned it the second-lowest ranking for fiscal soundness. That means that tax breaks on retirement funds may not remain in place and there is also a high sales tax.
Cost of living : 5 percent below the U.S. average
Population : 1.6 million
Best city : Sandpoint
PROS: Idaho’s rugged landscape is breathtaking. Nature enthusiasts will be able to enjoy snow-capped mountains, canyons, and lakes. Its below-average cost of living will allow seniors to make the most of their income and enjoy their retirement with less financial pressures.
CON: Once again, Idaho is not for you if you are craving the excitement of a big city. There are no major metropolitan areas in the state. Taxwise for seniors, there are pros and cons. The state tax is six percent, and the state income tax is above seven percent, but Social Security is not taxed and there are no inheritance or estate taxes.