Retirement destination rankings have long been a high-stakes game of musical chairs, with states jostling each other for the top spots year after year. While in 2022, Florida was blessed with the crown, this year, it tumbled down to the 8th spot. The allure of the Sunshine State’s balmy weather does seem to lose its sheen when juxtaposed with the spiralling housing costs. A median Florida home cost a staggering $409,100 in June 2023, as per Redfin, dwarfing the average retiree’s budget.
Crowded out of the top spot, Florida has made way for a rather unexpected champion this time around – Iowa. Unlike its sun-kissed predecessor, Iowa owes its rise to the top to its affordability. Well known tips embodied in the Warren Buffet Guide to Investing are often cited as financial gospel, but when it extends to retirement plans, the tables seem to turn. Forget the bright lights and limitless entertainment options, retirees are showing us that when the chips are down, it’s good old financial stability that takes the cake.
According to comprehensive data from a recent Bankrate study, maintaining a stable and comfortable retirement in Iowa doesn’t burn a hole in your pocket, with the median home price being a mere $232,200, almost half of that in Florida. With the majority of retirees navigating life on a fixed income, it is no surprise that they are flocking to this Midwest gem, turning affordable living into a delightful reality.
Bankrate’s ranking methodology propels affordability to the driver’s seat, comprising 40 percent of the total score. The other key factors for the best states to retire include well-being (25%), health care quality and cost (20%), weather (10%), and crime rates (5%).
Surprisingly, Delaware, with national highs in health care quality and an inviting tax environment, bagged the second spot, despite ranking 31st in affordability. The state remains a fortress for retirement planners with its lower property taxes and exempted Social Security benefits.
Larry Sprung, a financial advisor and Mitlin Financial’s founder, underscored the importance of evaluating not just the present but also the future prospects of potential retirement destinations. In conversation with Bankrate, he shared that a holistic approach would provide retirees with a destination that is not just appealing today but also sustains its charm economically and contextually over the long term.
While it is essential to analyze all your cards before picking your forever home, remember, it’s about more than just numbers and ratings. Important considerations include proximity to family, access to engaging activities, and your personal preferences. Also, ensuring the place can adjust with changing times could be a winning strategy for a blissful retirement.
This retirement puzzle is a multifaceted game of balancing practicality with personal fulfilment. The take-home message, though? Embrace the investing wizard’s essence in Warren Buffet’s Guide in your march towards a future of comfortable retirement. They quite aptly remind us: while luxury may appeal, affordability rules.
