South Dakota: #1 Best State to Retire in 2018

After rating all 50 states for retirement based on factors including cost of living and taxes, South Dakota ranked first on our list of best states for retirees.

Trying to pick where to retire? It's not an easy decision. Personal preferences come into play, from climate to being near the grandkids. Money matters, too, perhaps even more so. That's where we can help the most. We ranked all 50 states for retirement based on financial factors, figuring that the best states for retirees will offer low living costs and light tax burdens, as well as affordable health care options. We also favored states that are economically healthy and home to fit, active and relatively prosperous residents age 65 and over. After crunching all of the numbers, South Dakota ranked first on our list of the best states for retirement.

South Dakota: #1 Best State for Retirement

Population: 851,058

Share of population 65+: 15.2% (U.S.: 14.5%)

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Cost of living: 4% below the U.S. average

Average income for 65+ households: $43,712 (U.S.: $53,799)

Average health care costs for a retired couple: Below average at $415,297 (U.S.: $423,523)

Tax rating for retirees: Most Tax Friendly





The Mount Rushmore State might not be the first place that comes to mind when you dream of where to retire, but it's first place on our list. Affordability is the main factor pushing it to the top spot. In addition to low living expenses, including for health care, South Dakota is one the 10 Best States for Taxes on Retirees. And you can be confident it'll stay that way. The state ranks third in the country for fiscal soundness, according to a recent report from George Mason University's Mercatus Center, which indicates high confidence that it can keep up with short-term expenses and long-term financial obligations.

Learn more about how we ranked all 50 states for retirement including our methodology and data sources.

Stacy Rapacon
Online Editor, Kiplinger.com

Rapacon joined Kiplinger in October 2007 as a reporter with Kiplinger's Personal Finance magazine and became an online editor for Kiplinger.com in June 2010. She previously served as editor of the "Starting Out" column, focusing on personal finance advice for people in their twenties and thirties.

Before joining Kiplinger, Rapacon worked as a senior research associate at b2b publishing house Judy Diamond Associates. She holds a B.A. degree in English from the George Washington University.