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Illinois called worst state in which to
retire by TopRetirements.com
For more information on retirement
locations, go to
http://www.TopRetirements.com in which
this article first appeared
December 13, 2010 — The 50 U.S. states are
in a beauty contest. Whether they know it or
not, they are being judged by a tough jury
of 76 million or so baby boomers looking for
the best place to retire. Unfortunately, for
those living in Illinois, the Land of
Lincoln comes in last according to
TopRetirements.com notes that these baby
boomers are hard to please, they are used to
moving to new places, and are not going to
settle for second or third best when it
comes to enjoying their retirement years.
This article provides our list of the 10 (or
so) worst states for retirement, 2010
edition. This report was quoted extensively
in Robert Powell’s “10
Worst States for Retirement”
Everybody’s situation is different
Every individual has to consider his or her
own criteria for selecting a list of the
worst or best states to retire.
The list of the best
places for military to retire
from USAA.com and Military.com is a perfect
example of a list that makes sense for a
specific set of retiree needs.
Their lists were carefully tailored to U.S.
military retirees who typically have a nice
pension that they don’t want taxed at the
state level, and who need to be close to a
base for shopping and healthcare.
Our criteria for identifying the best or
worst retirement state:
- Income (Taxation of pensions and social
security might be better or worse in
- Sales (Not usually a deal breaker, but
- Property (Often the biggest state/local
tax for a retiree. Some states have programs
to help seniors control their property
- Inheritance and Estate (Some states have
neither, a few have both)
Climate and Topography
Fiscal health of the state
Cost of living including housing
Education including colleges
Proximity to friends and family
Fitting in socially, politically,
The best way to start your individual list
of best or worst states is to think about
and rank these criteria with your personal
A typical priority list might weight
recreation, climate, being close to a
college, cultural resources, and proximity
to friends and family more heavily than
But for someone else, avoiding taxation at
the state level of their government pension
and being close to high-quality medical
specialists might be much more important.
Because states are very large and diverse
entities, some factors, like proximity to
colleges or hospitals, have to be considered
at the local level.
Our Top Weighting Criteria
We heavily weighted this list on 3 criteria:
Fiscal health, taxation, and climate. If
those are not key factors for you, your list
might look very different.
Fiscal health, because as
the NY Times’ “Mounting
State Debts Stoke Fear of Fiscal Crisis“,
in Fiscal Trouble “ report,
and the Wall Street Journal’s “States
Face Budget Gaps”
article point out, many U.S. states are
having serious trouble balancing their
budgets, not to mention adequately funding
their future pension and health care
High tax states dominate
We weighted climate heavily
because we think the majority of today’s
retirees have a bias towards places with
The 10 Worst States for Retirement
Each state name has a link that goes to a
more detailed retirement guide for that
state. This list and its rankings are
somewhat arbitrary, but we stand by the
opinion that these states have many reasons
why they should be considered for any worst
places to retire list.
Lastly, please remember that our list might
be totally irrelevant to many people. Folks
for whom money or taxes are not important
will find our worst 10 list of little value,
because they have other considerations that
are far more important. For example, those
who want to retire near their family members
have such an important driver that the
“worst” state on this list could be their
1. Illinois (PR).
IL’s fiscal health could be the worst of any
state. It has even borrowed money to fund
its pension obligations. To be fair,
however, we need to mention that IL does not
tax pension or social security income, a
definite plus for the state’s retirees.
2. California (PR).
The Golden State is expensive and its
finances are in serious disarray. Has paid
bills with vouchers in the past. Does have a
Very high taxes, including property taxes.
Second highest tax burden and 5th highest
per-capita property taxes. Dysfunctional
state legislature. Very expensive to live
here. Most pensions are exempt, however.
Probably the worst off state in the
Northeast from a financial viewpoint. High
taxes. Does have some great places to live.
The highest property taxes in the U.S. as
well as the highest tax burden (as reported
by the Tax
Has serious pension funding issues.
High taxes (7th highest tax burden) and
unemployment. Cold winters.
7. Wisconsin (PR).
A high tax state (9th highest tax burden)
with cold weather. High property taxes. But
it does not tax military pensions.
High taxes including high property taxes.
Very high cost of living.
CT has the 3rd highest tax burden of any
state, taxes social security, and has very
high property taxes. It has some terrific
places to live, but the cost of living is
10. Nevada (PR).
The foreclosure capital of the world. State
is having financial problems. But it does
not have an income tax (yet).
(PR) = This state mentioned as a problem in
the Pew Report: “States in Fiscal Trouble”
Arizona (PR), Oregon (PR), and Florida (PR)
are all frequently mentioned as problem
states because of their unhealthy economies.
These high-growth states are having to deal
with no growth, and the transition has been
difficult. On the plus side, they (except
for OR) have warmer climates and are popular
with retirees. Florida does do not have an
income tax, Oregon does not have a sales tax
or tax social security or military pensions.
Kansas is mentioned along with IL as having
unfunded pension problems.
Vermont, one of the few states that taxes
social security, has the 8th highest tax
burden in the country. Michigan has taxes
that are in the middle of the pack, but its
economy is in terrible shape.
Street Protests Ahead?
Who knows what the future will bring
as problem states try to return to financial
solvency. Their troubles might not lead to
street protests and violence as we have seen
recently in Greece, England, or Ireland, but
it could be very bad. There could very well
be public outcry and protests when residents
see their public services slashed along with
a drastic rises in taxes. Defaults are a
So our bottom line, if you don’t like
strife, stay away from the states that are
in the worst shape.