In Search for Retirement Location, Best Places to Live Lists Make Things Worse

        We are not fans of rankings when it comes to the best or worst states for anything, but magazines like AARP and web sites like MoneyRates.com cannot seem to resist taking advantage of the human inclination toward Top 10 lists.

        We were reminded of this when we stumbled across a one-year old article at MoneyRates.com, a site that says it finds its users the best bank rates available.  Would that it did the same thing with its information about retirement locations.  AARP and other media outlets picked up the MoneyRates rankings and ran with them, almost without comment (and certainly no critical comment).

        On the face of it, most of the criteria MoneyRates factors into its

selections cover the range of categories we all consider when triaging our list of places to retire.  They used data on climate, crime rates, life expectancy and economics; but in breaking down “economics” into cost-of-living, unemployment and “average state and local tax burden,” MoneyRates shows the uselessness of state-by-state rankings.  Why, for example, would anyone care what the local taxes are in, say, Sarasota, when they are considering a home in a golf community in Fort Myers?  And while we are on the subject of taxes, an overemphasis on low state income tax rates blots out the effects of high local property taxes; many retirees whose incomes drop after their working days are over may not feel the pull of a state income tax the way they once did, but those property taxes might put a serious crimp in their lifestyles.

        Consider, also, the size of Texas, for example, and you have the essence of why it is a foolish exercise to identify a best or worst state for any category as broad as retirement choices.  Is Austin, a favored city for retirees over the last few decades, anything like Houston or Dallas?  Would a person seriously considering San Antonio as a retirement destination ever seriously consider Fort Worth?  People should and do choose a retirement location based on local factors, not irrelevant state data.

        The MoneyRates editors must know something baby boomers don’t know.  Some of the very states that thousands of boomers flock to each year are on MoneyRates’ worst 10 list, including the two Carolinas (SC at 4^th worst and NC at 8^th worst); Tennessee at 6^th and Arkansas at 10^th complete the southern list of bad states.  The MoneyRates best and worst lists may purport to factor in climate as an important consideration, but few southern states make the “best” list. New Hampshire, with no state income tax, is anointed the best state for retirement; it’s a beautiful state, especially in spring and fall, but the cost of living (extra clothing, heating costs) goes up dramatically in winter.  Bizarrely, Hawaii ranks at #2; it is a great state for climate and golf, but don’t expect family members from the mainland to visit too often and, oh, make sure to bring buckets of spending money (consider the costs of the many foods that must be shipped or airlifted onto the islands).  The same person who would retire to New Hampshire for the income tax advantage would never consider Hawaii, and vice versa, yet they hold down the top two rankings.

         The top 10 best retirement states list is rounded out, in order from #3, by South Dakota, North Dakota, Iowa, Virginia, Utah, Connecticut, Vermont and Idaho.  Perhaps the editors of MoneyRates are skiers or simply can’t stand the heat, in which case they should get out of the ranking business.