The State You Retire In: Maybe Your Most Important Financial and Health Decision

Retirement Planning
Written By Tommi Harris

As financial advisors, we often get asked: "Where’s the best place to retire?" While there’s no one-size-fits-all answer, where you live in retirement may affect far more than your view; it can shape your health, wealth, and the legacy you leave behind.

Let’s break it down.

Your Health: The Climate Shift as You Age

What used to be a mild inconvenience in your 50s, like high humidity or cold winters, can become a health hurdle in your 70s and 80s.

  • High Humidity: As we age, our bodies have a harder time regulating temperature, making hot, humid climates uncomfortable or even dangerous for older adults with heart or respiratory issues.

  • Cold Winters: Alternatively,  frigid northern winters bring risks like falls on icy sidewalks, isolation, and seasonal depression.

  • Air Quality Matters: States with higher pollution or wildfire risk (think parts of California, Arizona or Michigan being close to Canada) can take a toll on respiratory health, especially for those with asthma or COPD.

Here’s a tip: Think beyond sunshine. Look into year-round air quality, allergen levels, and access to top-tier healthcare.

Your Wealth: The Fine Print of State Taxes

Many people are surprised to learn that their state of residence can have a significant impact on what their heirs receive and what the government does.

Here are key tax differences across states:

  • Estate and Inheritance Taxes: In addition to the federal estate tax, 12 states and the District of Columbia impose additional estate taxes, while six states have inheritance taxes. As of December 2024, Maryland was the only state that imposes both an estate and an inheritance tax. In Massachusetts and Oregon, for example, estates over $1 million are taxed. Compare that to Florida or Texas, which have no estate or inheritance tax.

  • State Income Tax: Some popular retirement states like Florida, Nevada, and Tennessee have no state income tax, meaning your retirement income, such as; pensions, Social Security, and IRA withdrawals, extends farther.

  • Capital Gains and Real Estate: States like California not only tax income heavily, but also gains from selling real estate or investments. In retirement, this could mean losing tens of thousands of dollars unnecessarily.

Source: https://taxfoundation.org/data/all/state/estate-inheritance-taxes/

Health + Wealth = Legacy

We encourage clients to think strategically about retirement location. It’s not just about a warmer winter or a lower cost of living; it's about aligning where you live with your values, your health, and the legacy you want to leave.

At Ecos Wealth Advisors, we walk clients through these nuanced decisions not just from a financial lens, but from a life-planning perspective. We help you:

 ✅ Understand the tax laws in potential retirement states
✅ Project healthcare costs and Medicare differences across regions
✅ Weigh the pros and cons of downsizing or relocating
✅ Create estate plans that preserve more for your heirs, not the IRS

Let’s Talk Before You Pack Your Bags

Thinking of moving or staying put? Let’s explore how your next chapter can protect both your health and your wealth.

Schedule your retirement planning review today: 248.942.4842.

Tommi Harris
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