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Toughest States for Retirees

Kelly Miller, AARP, Updated January 2011

En español | Choosing where to live after retirement is a huge decision — and a very personal one. A low cost of living is a priority for some, while being close to family takes precedence for others regardless of the cost. As you plan for retirement, one smart way to identify the best place to retire for you is to eliminate the places that don't meet your needs.

See also: Best places to retire abroad.

Toward that end,, a website that provides information on retirement communities, has issued its list of the 10 worst states for retirement. The list is subjective, of course, but it's a good starting point for research. Factor in your personal retirement preferences as your review the rationale for why each of these states landed in the bottom 10.

In compiling its list, gave the most weight to three criteria: taxes, fiscal health and climate. Each of these factors is important, generally speaking, to retirees. On the financial front, high taxes can eat away at limited incomes, while poor fiscal health can force state governments to raise revenue or cut services. A warm climate is a natural draw for many retirees. If those three criteria aren't among your top priorities, then the low rankings might not influence your decision.

Here are the 10 worst states for retirement, with No. 1 being the lowest ranked, according to

Worst States for Retirement

Why You Should Think Twice

1) Illinois
Poor fiscal health
2) California Expensive, and its finances are in disarray
3) New York
Very high taxes, including property taxes
4) Rhode Island Worst-off state in the Northeast from a financial viewpoint; high taxes
5) New Jersey
Highest property taxes in the United States; has pension funding issues
6) Ohio High unemployment and cold winters
7) Wisconsin High property taxes and frigid weather
8) Massachusetts High cost of living and high property taxes
9) Connecticut Taxes Social Security and has high property taxes
10) Nevada
Foreclosure capital of the world

Visit for more details on why it ranked each state as low as it did. The information can be illuminating. Illinois, for example, is under such dire financial stress that it was forced to borrow money to fund its pension obligations. The state, however, doesn't tax retirees' Social Security income, which is a plus. The cold winters are inescapable.

You can also compare's choices to a similar list of the 10 worst-rated states for retirement that was compiled by, a finance website. Illinois didn't even make's list, which was topped instead by Nevada. gave significant weight to crime and unemployment rates. also issued a list of the 10 best states for retirement.

Use this checklist to factor in personal retirement preference.>>

Use this checklist from as you evaluate potential retirement states. Give the most attention to the factors that you think will matter most to you in retirement:

  • Taxes (sales, income, property, inheritance and estate)
  • Climate and topography
  • Crime
  • Fiscal health of the state government
  • Recreation
  • Transportation
  • Health care
  • Cost of living (including housing)
  • Education (including colleges)
  • Cultural resources
  • Natural disasters
  • Proximity to friends and family
  • Fitting in socially, politically and religiously

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You may also like: 10 best-rated states for retirement. >>