The excellent web resource Bankrate.com just released a list ranking the best and worst states for retirees, which is of interest to any Self-Directed IRA owner. Bankrate’s editors took the following characteristics into account:
- Cost of living
- Crime rate
- Community well-being
- Quality of health care
- Tax rate
Naturally, everyone wants to know the best and worst states, so let’s get those out of the way:
Best States To Retire
The top five states for Self-Directed IRA owners to retire in were dominated by a bunch of big, square states out west:
- South Dakota
These states tended to rank well in ‘community well-being. Indeed, none of them ranked higher than 17, and all but Virginia ranked in the top 10 states.
However, Wyoming ranked number 8 for weather. Which tells us that whoever put this chart together was either a dedicated skier or had not spent much time in Wyoming!
Worst States to Retire
From worst to less-worst:
- New York
- West Virginia
New York was no surprise to us. The combination of high taxes and high cost of living is brutal on retirement portfolios. Once a Self-Directed IRA owner retires, there’s no opportunity to take advantage of the comparatively high wages in the Northeast.
West Virginia ranked well for crime rate, and only slightly below average for taxes (number 33) but poorly for weather (47 out of 50) and dead last for community well-being.
Since our offices are in Asheville and Charlotte, North Carolina, we have many clients in the Southeastern United States. So let’s take a closer look at our own state as well as some of our neighbors. Here are a few words about the southeastern states, in order of their Bankrate ranking.
Virginia ranked number five in this survey, scoring high marks in crime rate (clearly exclusive of Washington, D.C!) health care quality (14) and cost of living (20), also clearly exclusive of Washington, D.C and Arlington/Georgetown! Virginia also scored well for weather (10) and was in the middle of the pack at 24 when it comes to their tax rates (exclusive of you-know-who).
Our own state ranks number 16, according to Bankrate’s editors, scoring strongest in health care quality (16), weather (19) and cost of living (21). It scored slightly below average for crime and tax rates (33 and 31, respectively).
The Palmetto State scored very well for its tax friendliness (9 out of 50) and for community well being (19). It scored very poorly for crime rates, at 48 out of 50. Only New Mexico and Louisiana did worse. So choose your community carefully!
At number 28, the Sunshine State’s biggest selling point for Bankrate’s editors was the health of its communities (12 out of 50) and its tax rate, at 17. However, for tax sensitive investors, we feel Florida should be ranked higher. Why? There is no state income tax. All your IRA distributions are state income tax free. That alone is a powerful factor for Self-Directed IRA owners.
The Bulldogs came in at number 33 – well below the median. It’s relatively cheap to live there – it ranked number 10 out of all 50 states for cost of living. But Georgia didn’t score all that well in any of the metrics Bankrate looked at. Its best score was on taxes, where it came in 19 out of 50. The state’s rank was also hurt by relatively low rankings for community well-being and quality of health care, at 41 and 40, respectively.
However, you don’t have to retire in the Carolinas for us to save you money on your Self-Directed IRA administration and other retirement fees. Our unusual flat rate approach to fee structures frequently saves self-directed retirement owners thousands of dollars per year compared to AUM fees, mutual fund expense ratios, and other costs.
For more information, visit us online at www.americanira.com or call us today at 866-7500-IRA(472).
We look forward to working with you.