Mid-Atlantic US State Is Best in the Country for Retirement: Report

Longwood Gardens in Wilmington, Del. (Photo courtesy of Harold Hank)

With factors such as a tax-friendly status and good climate, the Mid-Atlantic and Northeastern state of Delaware was found to be the best state for retirement in the United States in 2024, according to financial services company Bankrate.

Bankrate analyzed American states on the basis of affordability, overall well-being, weather, the cost and quality of health care, as well as crime, said a July 22 report. Delaware came out on top this year. While the state isn’t a “retirement haven,” it has enough good metrics for retirees to move in, the report said. Delaware is a pricier state to live in compared to others, Bankrate noted. However, it scores well on certain affordability metrics.

“Delaware is a tax-friendly state for retirees. It doesn’t have state or local sales tax, and it doesn’t tax Social Security benefits. It also has lower property taxes relative to the rest of the country, averaging roughly $1,939 annually,” the report stated.

“Earthquakes, tornados, and hurricanes are also rare, and the climate is temperate. The state’s weaker spots are its cost of living, crime, and cost of health care.”

West Virginia, Georgia, South Carolina, and Missouri took the remaining four out of the five spots in the list. Iowa and Mississippi, both in the top five rankings last year, moved down this year.

Meanwhile, Alaska was ranked the worst state to retire for the second consecutive year, followed by New York, Washington, California, and North Dakota.

Alaska “was dragged down by back-of-the-pack scores in affordability, quality and cost of health care, weather, and crime.”

“In our overall ranking, the best and worst states for retirees are split geographically. The Midwest and the South claim the top five states, while the Northeast and West claim the bottom five states, primarily because of differences in cost of living,” Bankrate said.

Delaware is roughly ranked in the middle when it comes to the age of retirement and the expected amount of money required to retire comfortably, according to data from financial services firm Madison Trust Company.

The age of retirement in Delaware is 63, higher than the lowest-ranked West Virginia and lower than the top-ranked District of Columbia.

Delaware is ranked 18 out of 50 states and the District of Columbia when ranked according to the highest annual cost for comfortable retirement. Living in the state will cost an average retiree an estimated $58,418, with close to $1 million needed to survive to the age of 80.

Unprepared for Retirement

The Bankrate report coincides with concerns that soon-to-be-retired Americans may not be financially prepared for life after retiring from their jobs.

“Fifty-five-year-old Americans are far less financially secure than older generations, and face mental and emotional strain that extends beyond prevailing notions about the ‘midlife’ crisis,” said a June 24 Prudential Financial press release.

The median retirement savings among 55-year-olds are less than $50,000, which is “significantly short” of the typical goal of having eight times their annual income saved by this age limit. The vast majority were afraid they would outlive their savings.

Older groups, aged 65 and above, were found to be more confident than 55-year-olds about retirement savings lasting throughout their life.

Moreover, inflation is disrupting retirement plans among this age group. A sizable number postponed their retirement due to rising living costs, Prudential said.

Inflation has remained elevated after it started to rise in May 2020. Over the past year, the 12-month inflation rate has consistently remained at or above three percent, putting pressure on people’s budgets and disrupting their retirement saving plans.

If the 3 percent inflation rate continues for three years, people would require almost 10 percent more money to have the same buying power.

Another major issue is potentially lower social security payouts. The Social Security Board of Trustees estimates that the social security trust fund would deplete by 2035, which would be around the time that current 55-year-olds are retired.

The depletion would force the agency to cut down benefits. As a result, social security will only be able to pay 83 percent of scheduled benefits.

People who plan on banking on their retirement funds and social security over the next decades could thus face significant financial challenges.