4 states you should move to if you want to build your retirement savings

When you’re trying to put money away for a big goal like retirement, it can be difficult to move forward. You’re still working, but you also have to juggle multiple financial demands, including kids, college tuition, mortgages, and home improvements, while also trying to maintain a certain standard of living.

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Aside from saving on costs here and there, a significant money move can be just that – a literal move to a place with a lower cost of living that allows you to put more away for your future retirement. And if your vision of retirement includes a change of scenery – whether your goal is warmer weather, closer to family or, yes, cheaper, why not move early to get that head start?

“States with low cost of living, tax benefits and good quality of care can improve your retirement prospects,” says Erika Kullberg, attorney, financial expert and founder of Erika.com. “Low cost of living also helps stretch your retirement budget and make life in retirement more comfortable, but not more extravagant.”

Kurt Mattson, a wealth advisor at Northwestern Mutual, said it’s also important to fully evaluate the entire financial landscape of a potential location, including costs for things like healthcare, transportation, home insurance and entertainment – and really think about what everyday life will look like there in the future.

“When you retire, every day will be Saturday and Sunday, so you’ll have a lot more free time. And what do you like to do most?” he said.

No matter where you go, the key is to have a budget and stick to it, Mattson says.

“It doesn’t matter if you make $50,000 a year or $5 million a year. It means making tough decisions, putting off things you might want today and putting the money in a 401(k) plan instead,” he said. “The people who stick to those budgets can really be successful in any field.”

From lower taxes to affordable healthcare, here are four states experts recommend if you want to get ahead in retirement.

Tennessee

“States like Tennessee, Mississippi and Arkansas are known for their affordability, offering lower housing costs, cheaper groceries and generally lower taxes,” said Joseph Catanzaro, financial advisor at Oak & Stone Capital Advisors. “These states also tend to have milder climates, which can lower heating and cooling costs.”

Tennessee is especially friendly to current and future retirees because of its lack of income tax, affordable housing market, and plenty of vibrant culture and natural beauty. The state also courts retirees through its Retire Tennessee program, promoting communities that meet certain criteria for available resources and amenities to help retirees thrive.

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Advantages:

• No state income tax

• Average property value: 324,084 USD

• Low property taxes: Effective property tax rate of 0.48%, with a property tax relief program available to eligible low-income and disabled applicants

Disadvantages:

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Earning passive income doesn’t have to be difficult. You can start this week.

Texas

“Many younger retirees like Texas because it has no state income tax and it is an economic engine that offers many opportunities for a good work-life balance in the city and in the country,” Kullberg said.

Another advantage is that the government “provides more than adequate health care for retirees who are likely to need more of it in old age.”

The cost of living in Texas is also 7% lower than the national average, with housing costs 17% lower. And with cities like Austin, Houston, and Dallas, there’s plenty to do whether you’re retired or just thinking about it.

Advantages:

Disadvantages:

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Florida

It is not for nothing that Florida is at the top of the list of the most financially friendly states.

“Florida has no state income tax and the cost of living is relatively low. Additionally, there are several retirement benefits for seniors, such as property tax exemption and no taxes on retirement income,” said Michael Collins, founder and CEO of WinCap Financial.

Although Florida has a 7% sales tax, most general food, health, medical and prescription items are exempt from the tax.

“Florida offers ample opportunities for financial success with its booming real estate market and industries such as tourism, finance and healthcare,” Collins said.

The permanent holiday mood can’t hurt either.

Advantages:

• No state income tax

• Average property value: 3899,130 ​​USD

• No state tax on lottery winnings (good luck!)

Disadvantages:

• Weather extremes: Heat and hurricanes

• Exploding building insurance: Average annual premiums were $10,996 in 2023, compared to a national average of $2,377.

North Carolina

North Carolina may not be at the top of the list for affordable living costs—it ranks 24th in cost of living according to U.S. News & World Report—but Catanzaro said it’s still worth considering.

“North Carolina may be a bit more expensive, but it offers a mix of affordable living with access to world-class healthcare facilities and a welcoming community atmosphere,” he said.

Housing affordability is one area where North Carolina really shines. According to U.S. News & World Report, average monthly rent and mortgage rates in cities like Greensboro, Raleigh, Asheville and Charlotte range from $850 to $1,250.

Advantages:

• Sea beaches and the Blue Ridge Mountains

• Average property value: $335,760

• Free College for Seniors: Individuals age 65 and older may attend classes at community colleges and UNC campuses as auditors (without credit) and receive tuition waivers.

Disadvantages:

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This article originally appeared on GOBankingRates.com: 4 States to Move to If You Want to Build Your Retirement Savings