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How to Retire Well in Maine

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how to retire well in Maine

For some retirees, the idea of heading to Maine is the dream. The Pine Tree State has a lot to offer, including a chance to enjoy the changing of the seasons, oceanside excursions, and much more. Plus, Maine has a lot of amenities, including many that can help seniors live their best life. However, Maine does cost more than some other options. That means that being financially prepared is essential, ensuring you have what you need to retire well in Maine. If you’re considering The Pine Tree State for your retirement, here’s what you need to know.


Cost of Living

When it comes to retirement planning, understanding an area’s cost of living is essential. It allows you to anticipate how expensive a state is in comparison to the national average, which can be vital if you want to ensure you have enough cash set aside to handle your needs.

For cost of living scores, the national average is permanently set at 100. If a state comes in with a score above 100, it means it’s more expensive than the average. Scores below 100 are a mark of increasing affordability, something that may be particularly critical for retirees with tighter budgets.

Maine’s cost of living score is significantly above the national average, coming in at 115.2. However, what may be surprising is that Maine’s housing score is closing to the average, sitting at 101.5.

The average home value in The Pine Tree State comes in at $259,991. That’s incredibly close to the national average, which sits at $256,663.

Maine’s transportation score also comes in near average, sitting at 100.6. However, the state comes in much higher in other areas, including groceries (135.0), utilities (111.9), and healthcare (114.4).

Tax Considerations

If you’re relocating to a new state for your retirement, it’s essential to understand the nuances of taxes in that area. Paying taxes can take a significant chunk out of your retirement income, making it relevant to both retirees with tight budgets that those whose retirement savings is substantial.

Maine does have a state income tax. It’s a bracket-based system, with rates coming in from 5.8 to 7.15 percent, depending on your income level.

Social Security is exempt from taxation in Maine, so that provides retirees with a bit of a reprieve. However, other forms of retirement income are taxable, including IRA, 401(k), and other pension plan payments.

Technically, there is also a $10,000 deduction each year on retirement income, but the amount is reduced based on the size of your Social Security benefit. For example, if your Social Security income is $8,000 per year, you would have a $2,000 deduction remaining. If your Social Security payments equal $10,000 or more a year, you can’t claim a deduction at all on your other retirement income.

Homeowners in Maine will also have to deal with property taxes. However, there are some programs available that can lessen this burden. If you own a homestead property for a minimum of 12 months and make it your permanent residence, you may qualify for a $25,000 exemption, reducing the taxable value of your home.

Retirees who are also veterans may qualify for the Veteran Exemption, which can be worth up to $6,000. Additionally, municipalities can have their own property tax deferral programs to assist senior citizens. Since these can vary from one municipality to the next, you would need to explore program options in the area you intend to live to determine what may be available.

Maine also has sales tax. The general rate is 5.5 percent, though some segments have higher rates, like prepared food (8 percent) and rentals of lodging (9 percent). However, there are no additional local taxes, so the rate is flat across the entire state, making it a bit easier to plan for and predict.

Part-Time Job Opportunities

Overall, part-time job opportunities tend to be available in any decently sized city or town. Initially, the coronavirus harmed the economy, leading Maine’s unemployment rate to climb as high as 10.4 percent for April 2020. However, that was far less than the national average at that time, which was 14.7 percent, a full 4.3 percentage points higher than Maine’s rate.

The Maine economy is recovering well from the COVID-19 pandemic. As of August 2020, the unemployment rate came in at 6.9 percent. That’s 1.5 percentage points lower than the national average for that same period, which was 8.4 percent.

While it appears that Maine is trending in the right direction, it is important to remember that the situation remains highly fluid. A resurgence could hinder the economy once again, and that could make it harder to find part-time jobs.

Best Cities for Retirees in Maine

The city you choose can have a major impact on your retirement. If you want to retire well in Maine, it’s wise to select a town that has the right kind of amenities, entertainment options, and more, based on your preferred lifestyle.

However, some options are popular with retirees. Kennebunk is considered by many to be a great choice thanks to its seaside location and wealth of recreation centers. Plus, a lot of medical services are available locally.

Belfast is another destination worth considering, particularly since its home to numerous retirement communities. Rockland has a substantial senior population and is home to a range of attractions, including the annual Maine Lobster Festival.

How Much Money You Need to Retire Well in Maine

Since the cost of living in Maine is higher than average, you’ll need access to more money if you want to be reasonably comfortable. Exactly how much it takes can vary depending on the city you choose, as some are more expensive than others. However, generally speaking, you will need access to about $73,025 a year to retire well in Maine. That amount can cover all of your basic living expenses while also leaving room for some wants or creature comforts.

Do you have any other tips that can help someone retire well in Maine? Share your thoughts in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. If you want to be able to customize your blog on your own domain and need hosting service, we recommend trying BlueHost. They offer powerful hosting services for $3.95/month!

How to Retire Well in Arizona

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how to retire well in Arizona

Arizona is a popular choice for retirees, at least for the winters. The temperature is warmer, and the dryer climate can be beneficial for some, causing many to choose to spend part of their golden years in the Grand Canyon State. Plus, Arizona has a lot to offer, particularly when it comes to enjoying the outdoors. The significant retiree population also means many cities have exceptional amenities. If you are thinking about making your way to the Grand Canyon State, here’s what you need to know to retire well in Arizona.


Cost of Living

One of the most crucial points to examine when you’re selecting a place to retire is the state’s cost of living scores. These metrics let you know how expensive a state is in comparison to others and the national average, both overall and in key categories.

The national average is always 100. When a state has a score above that mark, it means it costs more than the national average and could be a sign that it isn’t ideal for retirees who don’t have a substantial amount of savings. When a score is below 100, that’s a sign that it is more affordable than the national average, and could indicate it’s a good choice for retirees on tighter budgets.

Arizona’s overall cost of living score comes in at 100.1. That is almost right on the national average. Two of its category scores are also functionally average. The Grand Canyon State’s grocery and housing scores are 99.1 and 100.4, respectively. However, Arizona’s average home value comes in at $293,397. That’s higher than the national average, which sits at $256,663.

One area where Arizona has below average costs – earning a score of 95.6 – is healthcare. This could be a boon for retirees with medical conditions, as treatment costs less in the Grand Canyon State than many other areas.

However, Arizona is higher than average in the utilities and transportation categories. For those, the state comes in with scores of 104.6 and 105.6, respectively.

Still, none of the categories are dramatically off of the average. As a result, Arizona isn’t necessarily unaffordable because it is a middle-of-the-road state.


Tax Considerations

Another critical point to review before you choose a state to live in during retirement is local tax rates. Paying taxes means using some of your retirement savings to cover what can be a substantial cost, leaving you with less in your monthly budget.

Arizona does have a state income tax. Like federal income taxes, it uses a bracketed system, with rates coming in between 2.59 percent and 4.50 percent, depending on income level.

However, if you are considered a full-year resident, some of your income is excluded from taxation. This includes Social Security and railroad retirement benefits. Additionally, retired military members do qualify for a small exemption, making up to $3,500 in retirement pay tax-free.

All other retirement pay is fully taxed in Arizona. This includes state retirement system pensions, 401(k)s, and taxable IRAs.

When it comes to sales tax, you’ll pay at least 5.6 percent. That is the statewide minimum, though counties and cities can add on to that amount, causing some cities to cross the double-digit mark.

For property taxes, what you pay depends on where you live, as some cities and counties have higher rates than others. However, the average effective rate comes in near 0.72 percent, which is lower than you’ll find in many other states.

There are programs available to assist retirees with their property taxes, or at least make them manageable. The Senior Freeze program can keep the official valuation (for tax purposes) from rising. The Elderly Assist Fund reduces how much seniors pay by reducing some of what’s owed based on school district taxes in the area.

Part-Time Job Opportunities

Generally speaking, part-time job opportunities are available in most Arizona cities. The state is recovering reasonably quickly from the initial COVID-19 pandemic. While Arizona had an unemployment rate of 13.4 percent in April 2020 – which was lower than the national average of 14.7 percent for that period – it has since declined.

As of August 2020, it was back down to 5.9 percent. That’s 2.5 percent lower than the national average for that period, which came in at 8.4 percent.

Now, COVID-19 still makes the situation a bit precarious. However, the fairly low unemployment rate means retirees can likely find opportunities at the moment. Whether that will continue may depend on whether a resurgence occurs that negatively impacts the economy, so it’s critical to keep in mind that everything may be a bit fluid for some time.

Best Cities for Retirees in Arizona

When it comes to retiring well in Arizona, the city you choose maters. Some have more to offer retirees than others. Plus, affordability can vary, which may be a crucial point to consider if you’re on a tight budget.

If you want to be near Phoenix, then Sun City West could be a great option. This retirement community is mainly comprised of seniors. Plus, it has a lot to offer when it comes to recreation centers and medical facilities.

Green Valley, which is close to Tucson, is another great choice. It’s brimming with recreation options and is a popular destination for retirees. It is also fairly close to the Mexican border, which may be ideal for seniors who like to travel.

For retirees who want to be near the Grand Canyon, Prescott could be an excellent option. It has a solid senior population, ample medical facilities, and is within driving distance to Phoenix. Plus, it’s right next to Prescott National Forest, which is a superb destination for spending time outdoors.

How Much Money You Need to Retire Well in Arizona

Since Arizona’s cost of living is essentially average, it’s possible to retire comfortably there with a moderate income. Now, you may need to avoid some higher-cost cities, like Phoenix, if your budget isn’t ample. However, if you have around $63,453 a year, there’s a good shot you can retire well in Arizona. You’ll have enough to address your needs and cover some wants, too, ensuring you can live a good life after leaving the workforce.

Do you have any other tips that can help someone retire well in Arizona? Share your thoughts in the comments below.

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Ready for Retirement? Well Here’s How to Retire Well in Indiana

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how to retire well in Indiana

Once you get close to retirement, you are given an opportunity. Often, since you don’t have to report to a particular workplace each day. Then relocating can be an option. This means that nearly any state could become home, and that’s exciting. However, it can be hard to find a place that works for your retirement budget. It also isn’t uncommon to accidentally overlook some states that have serious potential, including Indiana. The Hoosier State has a lot to offer and is more affordable than some other choices. So if you’d like to give Indiana some consideration. Here’s how to retire well in Indiana.

Cost of Living

Every state has a unique cost of living score. It allows you to gauge how expensive states are in comparison to each other. As well as the national average. The national average is always 100. States with a score above 100 are more expensive than average. While states with lower scores are more affordable.

For retirees, finding a state with a lower score may be a necessity. It allows your retirement savings to go further and makes luxuries easier to squeeze into your budget.

Indiana’s overall cost of living score is 89.5 making it one of the most affordable states in the nation. Plus, Indiana really stands out in a critical area: housing. The Hoosier State’s housing score is a surprisingly low 75.2. Which means it costs significantly less in Indiana to buy a home in comparison to the national average.



The average home value in Indiana sits at $158,690. That’s $90,167 lower than the national average, which comes in at $248,857. While some may worry that lower home values mean there are problems with housing quality in Indiana. That isn’t how that works, generally. Since the cost of living is lower. Many properties are just more affordable overall. For example, if there were two carbon-copy properties. One in Indiana and one it a state with a higher cost of living. The Indiana one would just cost less, even though it is exactly the same as the other house.

Indiana also scores well in other categories. For groceries, utilities, transportation, and healthcare. The cost of living scores in Indiana are all below 100. That means it is less expensive than the national average across the board, essentially.

Tax Considerations

Tax rates are something every retiree needs to consider. Whether you only have a modest retirement fund or an ample sum available for your golden years. Taxes always take a bite out of that cash. When a state has higher tax rates. More of your retirement fund goes toward handling that burden. That means you’ll have less to spend on housing, groceries, entertainment, and everything else.


In Indiana, the individual adjusted gross income tax rate comes in at 3.23 percent. However, Social Security and railroad retirement benefits are considered nontaxable income, so you won’t have to pay any state income taxes on that money if you retire in Indiana.

Military retirement will end up exempt from Indiana state income taxes, as well. The amount of the exemption is set to rise between 2019 and 2022. After 2023, military retirement income will become 100 percent exempt.

However, other kinds of retirement income are potentially taxable at the standard 3.23 percent rate. This can include distributions from 401(k) and IRA retirement funds, as well as many other pensions.

When it comes to sales tax, Indiana comes in at 7 percent. There aren’t any local taxes, so the rate remains the same in every city. Additionally, food, prescription medications, and certain medical equipment are sales tax-exempt.

For property taxes, Indiana comes in relatively low. Additionally, individuals aged 65 and up may qualify for various tax breaks or credits. Along with the Homestead Deduction, there’s an Over 65 deduction that reduces the taxed value of a home. Plus, the Circuit Breaker Credit prevents a person over 65 years old from having their property taxes rise by more than 2 percent in any given year.

Part-Time Job Opportunities

Traditionally, retirees wouldn’t have much trouble finding part-time jobs in Indiana. Pre-COVID-19, the state’s unemployment rate was below the national average, potentially qualifying as full employment.

Post-COVID-19, Indiana’s unemployment rate typically beat the national average. In July 2020, Indiana came in at 7.8 percent. During that same period, the national unemployment rate was 10.2 percent.

However, the employment situation overall is more complex due to the pandemic and may remain so for months, if not a few years. As a result, retirees anywhere may have a bit of a harder time finding part-time jobs for now, though that could improve down the road.

Best Cities for Retirees in Indiana

Which city is best for your retirement may depend on your preferences. However, Indiana does have something for nearly everyone. Evansville offers a great cost of living and a riverside lifestyle, while Fort Wayne is seemingly surrounded by beautiful parks and is also affordable.

If you’d prefer a bigger city, Indianapolis can be a good choice for retirees. It may cost a bit more than some other areas but is still more affordable than many cities in other states. Plus, it’s brimming with entertainment options and amenities, while being close to parks and nature preserves. It’s also home of the Indianapolis 500, making it a great choice for race fans.

You could also choose Carmel or Fisher, both of which are just outside of Indianapolis. It’s a little more expensive in those areas, especially when it comes to housing, but it can still be fairly affordable overall.

How Much Money You Need to Retire Well in Indiana

Since the Hoosier State has a lower cost of living, you don’t need as much money set aside to retire well in Indiana. While exactly what it takes for you to be comfortable may vary depending on the city you choose and your target lifestyle, having access to around $56,734 could do the trick. Your needs would likely be covered, and you should have some cash left over for some wants, too.

Do you have any tips on how to retire well in Indiana? Share your thoughts in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. If you want to be able to customize your blog on your own domain and need hosting service, we recommend trying BlueHost. They offer powerful hosting services for $3.95/month!

How to Retire Well in Delaware

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how to retire well in Delaware

For many retirees, Delaware could be an ideal place to spend their golden years. You can enjoy the changing of the seasons, life by the water, well-appointed cities, and rolling countrysides. However, if you want to retire well in Delaware, you need to make sure you’re financially equipped to thrive in the area. Otherwise, you may not get to enjoy your retirement as much as you’d hoped, which would be a pity. If you’re thinking about retiring in Delaware, here’s what you need to know.

Cost of Living

A state’s cost of living score is an important factor when you are trying to decide where to retire. It is a simple metric that allows you to see how a state stacks up against the national average, giving you a way to gauge whether a particular area is more or less expensive than others overall.

The national average is always set at 100. If a state has a score above that, it costs more than the national average. If it comes in under 100, it’s a more affordable place to live, which may be better for retirees with tighter budgets.

In Delaware, the overall cost of living score is 107.7, marking the state as being more expensive than average. The First State is in a worst position when it comes to housing, where it has a score of 123.0.

The First State’s average home value is $257,521. That’s a bit higher than the national average, which is at $248,857. For rentals, the median price in Delaware is $1,400 per month. Surprisingly, that’s $150 below the national average, which is $1,650. If you’re a retiree interested in renting over buying, this could work in your favor.

When it comes to other cost areas, groceries, transportation, and healthcare all come in with scores barely above 100, sitting at 101.1, 101.1, and 100.3, respectively. The only score that’s lower than average is utilities, which is at 96.0.

Tax Considerations

Understanding a state’s tax situation is critical for retirees. Since paying taxes can take a major bite out of your retirement savings, it is relevant to both retirees on tight budgets and those with more retirement income available.

Delaware does have state income taxes. Instead of using a flat-rate, The First State has a bracket system. For taxable income levels below $60,000, the graduate rate ranges between 2.2 and 5.55 percent. For income levels above $60,000, it’s 6.6 percent.

In Delaware, Social Security and railroad retirement benefits are tax-exempt. However, any other form of retirement income that is taxable on the federal level is also taxed as income in Delaware. This can include 401(k) and certain IRA withdrawals.

Delaware also taxes military retirement, at least partially. Taxpayers who are aged 60 or older qualify for an exemption on at least part of their military pension (up to $12,500), though it typically won’t cover it all. For those under 60, only $2,000 is exempt.

Now, Delaware does not have any sales tax, either at the state or local level. It does have property taxes, but they are fairly low compared to many other states, coming in with an effective rate of around 0.56 percent.

Additionally, there is a property tax relief program for seniors. Homeowners who are 65 or older can get a credit for up to 50 percent or up to $400, whichever is lower, of the regular school property taxes. However, you have to be in the state for at least ten years to qualify, regardless of age.

Part-Time Job Opportunities

In most cases, retirees can land a part-time job in Delaware with relative ease. The unemployment rate before COVID-19 was a bit higher than the national average but was by no means troublesome.

In the post-COVID-19 landscape, the unemployment rate (as of July 2020) is about 10.4 percent. Considering that the national average for that period is 10.2 percent, the situation could certainly be more challenging. However, it does mean many retirees may struggle to find opportunities, as they are competing with a substantial number of unemployed persons.

However, it is possible that things will return to normal in time. Until then, it’s wise for retirees not to count on part-time jobs as a source of income if they don’t have a position in the state already.

Best Cities for Retirees in Delaware

If you want to retire well in Delaware, the city you choose can matter. Some have a slightly lower cost of living score, have more amenities, or offer different lifestyles, all of which are worth considering before choosing a town to call home.

A popular option is Rehoboth Beach. You get a quaint, East Coast coastal lifestyle, which is perfect for many retirees. Plus, there’s ample entertainment options, a vibrant community, and quick access to nature.

Ocean View is another solid option for retirees who would like to be near the beach, and so is Long Neck. Additionally, both are near fabulous state parks, which is great if you enjoy being outdoors.

If you’d rather be near a city, consider Greenville. It’s regarded as a suburb of Wilmington but still offers easy beach access. It also has great historic charm, multiple museums, and is home to a beautiful botanical garden.

How Much Money You Need to Retire Well in Delaware

Since Delaware has an above-average cost of living, it takes more money to retire there comfortably. Now, the city you choose does play a role, as some are more expensive than others. However, if you want to retire well in Delaware, it usually takes about $68,271 a year to make it happen. With that, you can handle your needs and have some space in your budget for wants, allowing you to make the most of your time away from the workforce.

Do you have any other tips that can help someone retire well in Delaware? Share your thoughts in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. If you want to be able to customize your blog on your own domain and need hosting service, we recommend trying BlueHost. They offer powerful hosting services for $3.95/month!

How Are Social Security Benefits Calculated?

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Social Security Benefits

You’re going to retire in the relatively near future. You intend to get some or all of your retirement income through social security benefits. How will that work? Many people aren’t quite sure how the Social Security Administration calculates their benefits. If you don’t understand that, then you might not know how much post-retirement income you can expect. And without that information, it’s very hard to plan for the future.

How Social Security Benefits Are Calculated

The Social Security Administration explains that they calculate social security benefits by taking the following into consideration:

  • The amount of money that you have earned in your lifetime from employment.
  • They adjust this amount to consider how average wages of changed over the years.
  • They base the adjustment on the 35 years you earned the most money during your lifetime.

Then it says, “we apply a formula to these earnings and arrive at your basic benefit” amount.

While the words sound straightforward, this is all a little bit confusing. After all, you probably don’t know how to adjust your wages for changes in wage rates across thirty-five years of employment. Moreover, this tells us nothing about the “formula” they apply.



Digging Deeper Into These Calculations

In order to better understand, we need to dig deeper. The Social Security Administration publishes an Annual Statistical Supplement that includes an appendix that provides us with more information about how social security benefits are calculated. The 2019 version explains that a basic calculation:

  • Assumes that you didn’t take any disability time during your working years. Further assumes that you didn’t work after becoming eligible for retirement.
  • They use “wage indexing” to calculate your lifetime earnings. This is how they figure out what you earned, adapting decades-old wages to modern standards of living. They base the adjusted amount on the year that you turn 60. For example, as of 2017, someone who earned $20000 in 1990 would have that count as over $47,000 towards their lifetime earnings based on the “wage indexing” math. You can see further examples of Wage Indexing math on this page.
  • Now about that “formula” – this is a weight of giving weight to “provide a higher replacement of earnings for lower-wage workers” in retirement. The SSA says that “the formula for persons aged 62 in 2019 is 90 percent of the first $926 of AIME; plus 32 percent of the next $4,657; plus 15 percent of the AIME over $5,583.”

So, as we dig deeper, we see that social security benefits are calculated based on what you earned (at today’s current value for those earnings) for the 35 highest-paid years of your career. This number is then adjusted with that “formula.”

What Can Change These Basic Social Security Benefits?

However, additional things can increase or decrease your basic benefits. Varied factors include:

  • Early retirement; if you retire at age 62, you can still get benefits but they’ll be lower than if you wait to retire until age 65
  • Late retirement; if you retire later than 65, you’ll typically increase the amount of benefits you can receive
  • Continuing to earn money after age 61 but still retiring at 65
  • Long periods of not working during your working years
  • Cost-of-living adjustments for the years after you’ve turned 65
  • Military service, pensions, railroad work and other factors that impact the Social Security tax you’ve paid

This is complicated stuff. No wonder many people aren’t sure how social security benefits are calculated! There is a worksheet here that can help you calculate all of this.

Get an Estimate of Your Social Security Benefits

The link above will take you to a worksheet that you can print out and fill in yourself. It should provide you with an accurate representation of what you can expect to earn in social security benefits. However, if that’s too much work for you at the moment, you might instead wish to use the Social Security Administration’s Retirement Estimator.

This is not going to give you the exact number. It fails to take into consideration many of the more complex details about how social security benefits are calculated. That said, it can give you a good starting point to guess what you are likely to earn in social security income. To keep things even simpler, although perhaps not quite as good of an estimate, the SSA also offers a Quick Calculator.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. If you want to be able to customize your blog on your own domain and need hosting service, we recommend trying BlueHost. They offer powerful hosting services for $3.95/month!

How to Retire Well in Iowa

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how to retire well in iowa

Choosing a place to retire can be an exciting time, but it’s also a serious undertaking. How far your money will go is impacted by a variety of factors, influencing how much it takes to retire well in a given area. Many soon-to-be retirees want to find an affordable location that offers the kinds of amenities they require. While they may spend time exploring traditional retirement states, many overlook amazing options like Iowa. The Hawkeye State has a ton to offer. Plus, your money can go further there, allowing you to retire well for less. If you want to see why Iowa should be on your list, then read on to learn how to retire well in Iowa.

Cost of Living

Each state has a cost of living score, comparing its affordability to the national average, which is set at an even 100. When a state has a score below 100, that means it’s cheaper to live there than the national average. Often, this means a retiree’s savings can go further or last longer there, something that may be critical if you have a tight budget.

Iowa’s overall cost of living score comes in at 91.4, which is significantly below the national average. However, Iowa really shines in when it comes to housing costs. For that segment, Iowa’s score is 76.0, marking it as one of the most affordable states for homebuyers.


In Iowa, the average home value is $154,727. In comparison, the national average sits at $248,857. That’s more than a $94,000 difference.

While some fear that the lower home value represents an issue with a property’s quality, that isn’t necessarily the case. At times, it simply means that the going rate for homes is lower overall, allowing you to secure a nice property for less than what a comparable house would cost in a different state that had a higher cost of living.

Iowa also does well in other sectors. It has a score of 96.3 for groceries and a 97.6 for transportation. For utilities, Iowa comes in as average, which a score of 100.0. The only area where Iowa is more expensive than average is healthcare, which landed at a 102.4. However, since it is more affordable in essentially every other sector, the slightly higher costs in the healthcare area have little impact on overall affordability.

Tax Considerations

Whether you’re working with a limited amount of retirement savings or have a significant sum set aside, tax rates matter. If you choose a state that has higher taxes, you’ll have to dedicate more of your retirement funds to cover those expenses. That means you’ll have less money available to support your preferred post-retirement lifestyle, and that isn’t always ideal, particularly if you have a tight budget.


In Iowa, there is a state income tax. However, you don’t have to pay taxes on your Social Security benefits. Military retirement is also tax-exempt.

Other types of retirement income are potentially taxed. Depending on your situation and filing status, you may be able to exclude up to $6,000 as an individual, or $12,000 if you’re married, of retirement income that comes from IRAs, annuity, pensions, or other plans. Generally, those who are at least 55 years old are eligible for some level of exclusion.

Beyond the exclusion, you do pay income taxes on your retirement income. Iowa has a bracket system. Income tax rates come in at 0.33 percent to 8.53 percent, so how much you pay varies depending on your income level.

Iowa also has a sales tax. The lowest rate, as set by the state, is 6 percent. However, each jurisdiction can charge an additional 1 percent, if they so choose. Overall, this rate is comparable to the rates set by most other states.

Individuals who are 65 or older are also eligible for a property tax credit. Usually, the Iowa Homestead Credit reduces the assessed value of the home (for tax purposes only) by about $4,850. This can result in a savings of $100 to $200 on your property tax bill, depending on your jurisdiction’s rate.

Part-Time Job Opportunities

Generally, retirees can find part-time jobs in Iowa with a reasonable amount of ease. Even in the wake of the pandemic, Iowa’s unemployment rate (as of July 2020) came in at 6.6 percent. That’s below the national average of 10.2 percent for the same period.

Before COVID-19, the unemployment rate was also below the national average. In February 2020, it was a startlingly low 2.8 percent.

However, that doesn’t mean the landscape isn’t more challenging today than it was previously. Additionally, until the COVID-19 event completely calms, the situation remains precarious. As a result, retirees today may have a harder time landing a part-time job, though that may subside down the line.

Best Cities for Retirees in Iowa

If you’re looking for a great city in Iowa to call home during your retirement, you have quite a few options. The town of Clear Lake is a popular choice, offering a small-town ambiance and welcoming vibe. Ames is another lovely choice. It’s conveniently located near Route 35, is highly affordable, provides a great feel, and it just 30 miles from Des Moines.

For retirees who want to be closer to a big city, Windsor Heights, a Des Moines suburb, is a solid choice. West Des Moines is a similarly excellent option.

It’s also wise to keep Mount Vernon, Clive, and Johnston on the table. They each have a great atmosphere, though each in a unique way.

How Much Money You Need to Retire Well in Iowa

Since the state has an affordable cost of living, you don’t need as much stashed away to retire well in Iowa. While the exact amount it takes to stay comfortable does vary depending on the city you select, if you have around $57,938 a year available, you should do well in Iowa. Covering your needs shouldn’t be an issue at that income level, and you can also get quite a few wants if you have access to that much cash.

Do you have any tips on how to retire well in Iowa? Share your thoughts in the comments below.

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