The five Worst States for Retirement

Retirement is a time when a person most seeks stability, security and comfort after many decades of hard work. While the best states to spend your golden years are probably widely known, given the difficult economic situation that the world is going through, it makes sense to also be aware of the five worst states for retirement.

Taking into account the various key aspects that make a state attractive for retirees, such as fiscal health, taxes, climate, cost of living and more, below are the five worst states for retirement:


Due to the recession, Illinois has racked up a $13 billion deficit which made it necessary to borrow a large amount of money in order to be able to sustain the pension fund. While there is no tax on pensions or on social security, other taxes  such as property, income, and business are among the highest in the US. The climate in Illinois isn’t one of the best either, since summers tend to be very hot and winters are really cold. It is also one of the states that are regularly swept by tornadoes, which is definitely not desirable if you’re looking for a peaceful, stress-free retirement.


While California may seem like a great place to retire because of the mild, pleasant climate, it is also one of the states with the highest levels of taxation and with a high cost of living. Furthermore, it is among the five states that don’t allow tax exemptions for pensions. And if that isn’t enough reason to be reluctant to retire here, the recession has strongly affected the finances of this state.

Rhode Island

Rhode Island is also among the five states that don’t offer tax relief for retirement income. Its pensions plan funding falls short of expectations and the taxes are among the highest in the Northeast. Rhode Island has been heavily hit by the recession and its financial recovery will probably take quite a while.

New York

Though it has one of the largest pension plan fundings and there is no income tax on retirement income, New York isn’t a very attractive state for retirees because of its sky-high taxes. And while New York has great transportation and has a lot to offer from a cultural point of view, it is no secret to anyone that living in this state is very expensive.


Alaska has a moderate level of taxation and no personal income or sales tax. It is also among the states that have managed to gather funding for future health benefits, despite its low pension funding. While the reasonable tax load is a strong point, Alaska isn’t a great state for retirees because of high cost of living and the cold climate.

When choosing a state for retirement, it is important to do research and carefully weigh your options based on your desires for the future and your economic situation. Being aware of the worst states for retirement is very useful because depending on what things you value the most i.e. tax exemptions, scenic views, warm or cool weather, etc., you can make an informed decision based on facts.