Texas Is Among The Top Ten Best States To Retire, Study Shows (2024)

FAQs

Is Texas a good state for seniors to retire? ›

Texas is a low-tax state.

And the tax situation is even better for retirees. Texas doesn't have any state income, inheritance, or estate taxes. Social Security isn't taxed, and neither are retirement distributions like 401(k), IRA, or pensions.

A report from Seniorly, which provides an online directory of more than 60,000 senior living communities, ranked the Lone Star State as the seventh-most expensive state for seniors. The ranking accounted for average retirement income, cost of living, average electricity bill cost and more.

1 state to retire in, Virginia has taken the top spot this year, according to personal finance website WalletHub's “2023′s Best States to Retire” study. WalletHub evaluated all 50 U.S. states in three key categories: affordability, quality of life and access to health care.

1. Florida. The Sunshine State's ranking as the best state to retire in the country should come as no surprise. For some, the weather alone is enticing enough.

A new ranking by banking and credit union library Bank Locations listed Texas as the best state for retirees in 2023. Michigan also beat out Florida as a more appealing locale for older Americans, based on factors like cost of living, quality of life and access to healthcare.

Texas has proven to be tax-friendly toward retirees. SmartAsset said since there was no state income tax in Texas, Social Security income and withdrawals from retirement accounts would not be taxed by the state. According to the study, Texas had a net gain of 5,542 retirees in 2021.

Texas is tax-friendly toward retirees. Social Security income is not taxed. Withdrawals from retirement accounts are not taxed. Wages are taxed at normal rates, and your marginal state tax rate is 0.0%.

Pharr provides a high livability score and low monthly rent, making it almost the best city for living solely on Social Security.

Seniorly experts said, “The average retirement income in Texas is $30,751, Medicare costs $13,458, and 76.1% of seniors spend less than 30% of their income on housing.” The Census Bureau, Medicare and Medicaid Services, and Missouri Economic Research and Information Center provided data for all 50 states.

What state does not tax your retirement? ›

Fortunately, there are some states that don't charge taxes on retirement income of any kind: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.

The United Arab Emirates claim the top spot for the happiest place to retire. The study reveals that the United Arab Emirates is the happiest place to retire with an overall score of 7.76. It comes as no surprise that with the average yearly temperature being 27 degrees and 3,508 hours of sunshine, they came out on top ...

1. Alaska. Alaska is the most tax-friendly state for retirees because it has no state income tax or tax on Social Security. And its sales tax rate is the fourth lowest on our list - fifth lowest in the U.S. But keep this in mind: The cost of living in Alaska is higher than in most states.

To acquire the full amount, you need to maximize your working life and begin collecting your check until age 70. Another way to maximize your check is by asking for a raise every two or three years. Moving companies throughout your career is another way to prove your worth, and generate more money.

Inflation and stock market dips have also negatively impacted their financial situation. In response, seniors are seeking more affordable places to call home. For example, many are moving to Baldwin County, Alabama, the fastest-growing county in the state.

Florida is the hottest state in the US, with an average temperature of 73.4 °F. Louisiana is the second hottest state, with an average temperature of 68.5 °F, followed by Texas, the third hottest state, with an average temperature of 68 °F.

Cost Of Living

If you are a home buyer, you will pay more to purchase a home in Florida than in Texas. The median sales price of a home in Florida in Q1 of 2021 was $317,500 versus Texas at $274,000 in the same time period. If you rent, this difference will trickle down to you as a renter.

State leaders pointed to a number of reasons why people — mainly millennials — have been so attracted to Texas. There's no state income tax and the cost of living is lower than the national average. Plus, there are plenty of business-friendly policies.

What is special about living in Texas? ›

Warm and tax-friendly, living in Texas is a great idea. With many diverse cities and endless job opportunities, Texas is a popular destination for young professionals, families, and retirees. Compared to living in Florida, Texas is slightly cheaper and just as warm as the sunshine state.

At what age do you stop paying school taxes in Texas? Never! Unless they are totally exempt from property taxes, a homeowner continues to pay property tax even after age 65, so long as they live in that house. Homeowners aged 65 and above are eligible for a "tax-ceiling".

If you have a low living cost and can supplement your income with a part-time job or a generous pension, then retiring on $3,000 a month is certainly possible.

Property Tax and Appraisals

The Texas Tax Code, Section 33.06, allows taxpayers 65 years of age or older to defer their property taxes until their estates are settled after death.

El Paso. El Paso is often ranked as the cheapest place to retire in Texas, but it also gets high marks for the overall happiness rating of its residence. You'll get access to high-quality healthcare, recreation, and cultural attractions.

Ecuador. If you're looking for a country where you can retire outside the US comfortably with $800 per month and experience one of the most ecologically diverse places in the world, then Ecuador might be for you. The go-to city for US retirees in Ecuador is Cuenca, which also happens to be a UNESCO World Heritage site.

Average Monthly Retirement Income

According to data from the BLS, average incomes in 2021 after taxes were as follows for older households: 65-74 years: $59,872 per year or $4,989 per month. 75 and older: $43,217 per year or $3,601 per month.

Generally, a good retirement income is about 75% to 85% of the pre-tax income earned in your last working year. This rule-of-thumb reflects the following assumptions: you have been saving about 15% of earnings annually, you will maintain a balanced budget and you will pay less in taxes during retirement.

The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67. The chart below lists the full retirement age by year of birth.

At what age is 401k withdrawal tax free? ›

The IRS allows penalty-free withdrawals from retirement accounts after age 59½ and requires withdrawals after age 72. (These are called required minimum distributions, or RMDs). There are some exceptions to these rules for 401(k) plans and other qualified plans.

Social Security benefits may or may not be taxed after 62, depending in large part on other income earned. Those only receiving Social Security benefits do not have to pay federal income taxes.

Countries Natixis ranked as secure retirement locations are mostly concentrated in Europe but also include New Zealand and Australia. The top three countries in the rankings are Norway, Switzerland and Iceland, all of which have life expectancies of 83 years, compared to 77 in the U.S. and the world average of 72.

According to Moss, the happiest retirees are those who have paid off their mortgage or will have it paid off soon. And, it isn't necessarily the house that leads to happiness but often the neighborhood or community the home is in.

The average retirement age in U.S. is 64 years old, with the average retirement age across all states spanning from 61 to 67 years old. The Social Security Act sets the minimum age to retire at 65 to receive full retirement benefits, although the minimum retirement age will continue to rise.

1. Hawaii. Hawaii residents enjoy the lowest property tax rate in the U.S. However, the high cost of living and limited housing opportunities make it a very expensive place to live.

In 2020, the average American contributed 8.9% percent of their income in state taxes. Alaska had the lowest average overall tax burden – measured as total individual taxes paid divided by total personal income – at 5.4%, followed by Tennessee (6.3%), New Hampshire (6.4%), Wyoming (6.6%) and Florida (6.7%).

MoneyGeek's analysis found that Wyoming is the most tax-friendly state in America, followed by Nevada, Tennessee, Florida and Alaska. States that received a grade of A all share something in common: no state income tax. Washington and South Dakota — which both received a B — also have no state income tax.

What Is the Social Security Bonus? There is no specific “bonus” retirees can collect from the Social Security Administration. For example, you're not eligible to get a $5,000 bonus check on top of your regular benefits just because you worked in a specific career. Social Security doesn't randomly award money to people.

What changes are coming to Social Security in 2023? ›

Social Security recipients will get an 8.7% raise for 2023, compared with the 5.9% increase that beneficiaries received in 2022. Maximum earnings subject to the Social Security tax also went up, from $147,000 to $160,200.

You must have worked and paid Social Security taxes in five of the last 10 years. • If you also get a pension from a job where you didn't pay Social Security taxes (e.g., a civil service or teacher's pension), your Social Security benefit might be reduced.

Texas is a low-tax state.

And the tax situation is even better for retirees. Texas doesn't have any state income, inheritance, or estate taxes. Social Security isn't taxed, and neither are retirement distributions like 401(k), IRA, or pensions.

Social Security recipients will soon receive their biggest benefit hike since 1981, with the pension program set to deliver an 8.7% cost-of-living increase in 2023.

Social Security benefits and Supplemental Security Income (SSI) payments will increase by 8.7% in 2023. This is the annual cost-of-living adjustment (COLA) required by law. The increase will begin with benefits that Social Security beneficiaries receive in January 2023.

Texas is tax-friendly toward retirees. Social Security income is not taxed. Withdrawals from retirement accounts are not taxed. Wages are taxed at normal rates, and your marginal state tax rate is 0.0%.

Average Cost of Independent Living in Texas

On average, independent living in Texas can range from $450 to $4,800 per month.

Maine topped The Motley Fool's list of best U.S. states to retire, with high marks for quality of life, safety, and health care cost and quality. The state has the highest percentage of residents over age 65, so retirees can find like-minded neighbors who enjoy the outdoors, natural beauty, and reliable health care.

At what age do you stop paying school taxes in Texas? Never! Unless they are totally exempt from property taxes, a homeowner continues to pay property tax even after age 65, so long as they live in that house.

This local option exemption cannot be less than $3,000. To qualify for the age 65 or older residence homestead exemption, the individual must be age 65 or older, have an ownership interest in the property and live in the home as his or her principal residence.

Do retirees pay property taxes in Texas? ›

Property tax deferral for seniors

You may be aware that seniors can apply for an exemption from Texas property taxes. This is true: when you reach the age of 65, you can file an affidavit with the chief appraiser in your district to exempt yourself from the collection of taxes on your property.

Killeen. If you're looking for the cheapest place in Texas to live, another consideration is Killeen. Nearby Fort Hood has one of the largest military bases in the U.S. Although many of the activities are geared toward families, two senior centers ensure retirees have plenty to do.

Texas Health Information, Counseling and Advocacy Program can help you find information and enroll in Medicare, Medicaid, and long-term care. Area Agencies on Aging (AAA) can help you find services for people age 60 and older and their family members and caregivers.

Fortunately, there are some states that don't charge taxes on retirement income of any kind: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.

Countries Natixis ranked as secure retirement locations are mostly concentrated in Europe but also include New Zealand and Australia. The top three countries in the rankings are Norway, Switzerland and Iceland, all of which have life expectancies of 83 years, compared to 77 in the U.S. and the world average of 72.