how to retire well

How to Retire Well in Kansas

December 11, 2020 By Tamila McDonald Leave a Comment

When you get close to retirement, you may decide that now is the time to head somewhere new. Many retirees relocate to a different area, allowing them to enjoy what a particular state has to offer. While Kansas isn’t a traditional choice, it’s critical not to overlook the Sunflower State. Aside from great affordability, it brings a lot more to the table. If you’re wondering if you can retire well in Kansas, here’s a look at some critical decision-making points.

Cost of Living

Before you settle on a place to retire, it’s crucial that you take a look at a state’s cost of living scores. Those metrics give you indications about a state’s affordability, both in comparison to other states and the national average.

For simplicity, the national average is always set at 100. If a state has scores above 100, either overall or in individual categories, it means that it is more expensive than average. For scores below 100, it can be a mark of affordability.

Overall, Kansas has a cost of living score of just 87.9. Additionally, the Sunflower State has some of the lowest housing costs around, coming in with a score of only 71.8.

In the United States, the average home value is $262,604. However, in Kansas, the average is just $167,248. That’s a $95,356 difference.

As for other cost of living categories, Kansas also does very well. All of the scores remain below 100. Groceries and transportation are just 92.8 and 94.8, respectively. Healthcare comes in with a 98.4, and utilities, which has to highest score, is still only 99.4.

Tax Considerations

When you’re choosing a place to retire, looking at various local tax rates is a smart move. How much you’ll owe in taxes impacts how far your income and savings will go, significantly affecting your budget.

Kansas does have a state income tax. The Sunflower State mimics the federal government’s approach, using a bracketed system. Depending on your income level, your tax rate can vary between 3.1 and 5.7 percent.

There are some exemptions that can reduce your income tax burden. For example, retirement income from a Kansas Public Employees Retirement System account isn’t taxed. If your federal adjusted gross income is no more than $75,000 a year, then Social Security may be exempt, too.

However, most other retirement income is taxable. This includes military retirement, as well as IRA, 401(k), private pensions, and similar sources.

Kansas also has a sales tax. The base rate for most retail purchases is 6.5 percent. Cities can also add more sales tax. For example, starting in 2021, the combined tax rate in Douglass will hit 8.5 percent. But that isn’t the highest rate. In some locations, sale tax rates are 10 percent or more.

In Kansas, property tax rates are generally reasonable. Plus, retirees may qualify for programs that reduce how much they owe. For example, the Kansas Property Tax Relief for Low Income Seniors provides qualified individuals with a property tax refund worth up to 75 percent of what’s owed. For those who aren’t eligible for that program, there’s also a Homestead Refund worth up to $700.

Part-Time Job Opportunities

One option may retirees take is to find a part-time job after leaving their main career. It provides them with a source of income, something that can help them stretch their retirement savings or even set aside more money for their golden years.

Generally speaking, part-time jobs are typically available in Kansas. However, COVID-19 has shaken things up a bit, impact the availability of opportunities.

When the pandemic first began, The Sunflower State saw it’s unemployment rate skyrocket from 2.8 percent in March 2020 to 11.9 percent in April 2020. While those numbers are both markedly better than the national averages at that time – which came in at 4.4 percent and 14.7 percent, respectively – it does show that opportunities dwindled quickly.

As time passed, Kansas has largely recovered. While the national average in October 2020 came in at 6.9 percent, Kansas was at 5.3 percent, a full 1.6 percentage points lower. However, that’s still high in comparison to March’s 2.8 percent. That means it may be harder to find a part-time job, at least for a little while. So, it’s important to make sure you have enough in savings to cover you if you can’t secure a position.

Best Cities for Retirees in Kansas

Another big decision point for retirees is the city they head to for retirement. Every location can bring something a bit different to the table. Some a vibrant while others are laidback, for example. Additionally, they may offer up a unique variety of amenities and can have different costs of living.

If you’re trying to figure out which city may be a good choice, there are a few that stand out. If you want to be near Kansas City, then Lansing might be right for you. It’s a smaller city along the Missouri River that’s just brimming with amenities, all while being just a quick drive away from the big city.

Lawrence can also be a great choice. While it’s seen as a college town, it has a lot to offer retirees. It has a vibrant arts scene, for example. Lawrence also does well when it comes to accessing critical amenities.

Atchison should also be on your list. This quaint railroad town was the birthplace of Amelia Earhart, and it also settled near the banks of the Missouri River. There’s also a college in the area that gives the city a hint of youthful flare.

The same goes for Emporia. This charming town is between Wichita and Topeka, making both cities accessible. It’s also a college town, ensuring it remains vibrant and that there are plenty of amenities.

How Much Money You Need to Retire Well in Kansas

With the cost of living in Kansas being fairly low, retiring comfortably there doesn’t take as much income as some other areas. With a moderate amount of income, you might be able to retire well in The Sunflower State.

Overall, if your annual income level is at least $54,832, you will likely be in pretty good shape in Kansas. Covering your needs shouldn’t be an issue, and many of your wants should fit into your budget, too.

Retirement Apps you can use in Kansas

App	Fees and Minimum	Best for:
Betterment	0.25% per year no account minimum	Saving for retirement
Ellevest	$1-$9 per month no account minimum	Retirement especially for women
Personal Capital	Free	Planning retirement

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

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How to Retire Well in Missouri

December 8, 2020 By Tamila McDonald Leave a Comment

Choosing a place to retire can be tricky. Often, aspiring retirees who are open to relocating focus on traditional destinations. While this can certainly work, it also means you may overlook the potential of a state like Missouri. The Show-Me state actually has a ton to offer. Plus, it’s substantially more affordable than many other states you may be considering. If you are wondering what it takes to retire well in Missouri, here’s everything you need to know about spending your golden years in this state.

Cost of Living

One of the biggest factors to consider when you’re choosing a place to retire is the state’s cost of living scores. With those, you can see how expensive a state is in comparison to others, as well as the national average.

For cost of living scores, the national average is forever set right at 100. When a score exceeds that mark, it means it is more expensive than average. When a score is below 100, that can be a sign of affordability.

Missouri’s overall cost of living score is just 88.9, showcasing that it costs less to settle in Missouri than many other states. Grocery and healthcare both come in with scores of 97.6, putting them slightly below average. Utilities are similar with a score of 97.5, and transportation comes in even lower with a 93.9.

However, where the Show-Me State really stands out is housing. That score is a startling 71.6, making it one of the lowest in the nation.

While the average home value in the United States is $262,604, the average in Missouri is just $173,541. That’s a difference of $89,063, showing just how affordable homes can be in the Show-Me State.

Tax Considerations

Before you pick a state to retire in, you also want to look at the tax implications of choosing that location. How much you have to pay in taxes affects your budget and how far you’re savings will go, so it’s important to take taxation into consideration.

Missouri does have a state income tax. Like the federal system, the Show-Me State uses tax brackets. Depending on your income level, you could pay anywhere between 0 to 5.4 percent on your taxable income.

Now, not all forms of retirement income are taxable income if you live in Missouri. Many qualify for deductions or exemptions. Social Security is exempt if you are at least 62 years old (or are disabled) and have less than $85,000 a year in income as an individual, or $100,000 per year if you file jointly.

There are also other exemptions and deductions available, including for public and private pensions, though not everyone is eligible. However, funds from an IRA or 401(k) don’t qualify for deductions or exemptions.

There’s also sales tax to contend with if you choose to retire in Missouri. The state sales tax rate comes in at 4.225 percent. However, cities, counties, and districts can impose additional taxes, leading to higher rates in many areas.

When it comes to property taxes, Missouri’s are fairly reasonable. Additionally, many retirees may qualify for credits or deductions that lower the cost. For example, the Missouri Property Tax Credit Claim can be worth up to $1,100 a year.

Part-Time Job Opportunities

Many retirees look for part-time jobs to bring in a little income during their golden years. In many cases, Missouri has quite a bit to offer in this department. However, COVID-19 may make positions comparatively scarce, at least for a while.

At the beginning of the COVID-19 pandemic, Missouri went from an unemployment rate of 3.9 percent in March 2020 to 10.2 percent in April 2020. Now, both of those numbers were better than the national average, which came in at 4.4 percent and 14.7 percent, respectively. However, it certainly led to some hardship.

As recovery efforts moved forward, Missouri faired well. While the national average in October 2020 was 6.9 percent, Missouri’s was 4.6 percent, less than a percentage point away from pre-pandemic levels.

While this suggests that opportunities may be returning to normal, it’s important to remember that the situation is highly fluid. As a result, it’s best not to count on part-time work as being an option, at least for the near future.

Best Cities for Retirees in Missouri

The city you choose has a big impact on your retirement. Not only can it affect your budget, as some areas cost more than others, but it can also do more. Some locales have better amenities or different vibes, altering your quality of life.

If you’re looking for a slower pace, Kennett could be a great choice. It’s in a mostly agricultural part of the state and has a smaller population. However, it still has everything you could need.

Kirkwood is another great option, especially if you want to be near St. Louis without living in it. It’s a very charming suburb that’s part of the inner ring, ensuring you can access all that St. Louis has to offer easily.

Springfield could also be an excellent choice. It’s near the Ozark Mountains, which could make it ideal for outdoorsy retirees.

How Much Money You Need to Retire Well in Missouri

Overall, the Show-Me State is pretty affordable, thanks to its lower cost of living. As a result, you should be able to secure a comfortable retirement without a ton of savings.

Generally, if you have access to at least $55,973 each year, you can likely retire well in Missouri. You should be able to cover your needs without much trouble, and many of your wants would fit into your budget, too.

Best Retirement Apps you can use in Missouri

App	Fees and Minimum	Best for:
Betterment	0.25% per year no account minimum	Saving for retirement
Ellevest	$1-$9 per month no account minimum	Retirement especially for women
Personal Capital	Free	Planning retirement

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

How to Retire Well in Colorado

October 29, 2020 By Tamila McDonald Leave a Comment

Choosing a place to retire is a big decision. Where you live can play a big role in how far your retirement savings go. As a result, it’s crucial to pick a destination that has everyone you want at a price you can afford. For many, the idea of heading to Colorado is enticing. The Centennial State has a ton to offer, particularly for those who enjoy spending time outdoors. If you are wondering whether it could be a good match for your golden years, here’s what you need to know to retire well in Colorado.

Cost of Living

Before you settle on a place to retire, it’s critical to examine the area’s cost of living scores. Those numbers give you an idea of how much a state costs in comparison to the national average. It allows you to estimate a state’s affordability before you pack your bags and head that way.

For simplicity, the national average cost of living is permanently set at 100. If a state has a score above 100, it’s a sign that it costs more to live there. For states below 100, it’s a signal of better affordability.

Colorado has a moderate cost of living score, sitting at 103.2. That makes the Centennial State seem reasonably affordable.

It’s important to note that the category cost of living scores can alter the story. In Colorado, both groceries (97.2) and utilities (86.1) are below the national average. However, housing (112.8) and transportation (105.8) are above. For healthcare, the score is near the middle, sitting at 101.0.

Housing is often a major concern. In Colorado, the average home value is $423,364. That’s a shocking $163,458 more than the national average of $259,906. And that doesn’t mean that homes are a nicer quality. Instead, it means two comparable homes, one listed in Colorado and one that’s elsewhere, that the Colorado house would be more expensive to buy.

Tax Considerations

Another critical point to examine when choosing where to retire is local tax rates. The amount of income that has to go toward paying taxes can significantly impact your lifestyle and an area’s affordability.

Colorado does have a state income tax. Unlike the federal tax system, the Centennial State doesn’t use brackets. Instead, it has a flat-rate of 4.63 percent.

When it comes to retirement income, Colorado does tax it. This includes Social Security and funds from other retirement accounts or pensions. However, they do offer an exemption of up to $24,000, depending on your age and income sources.

The Centennial state also has a sales tax. The state’s sales tax rate is 2.9 percent. However, cities can tack on their own sales taxes. This means that many areas have higher sales tax rates, with some exceeding 11 percent.

When it comes to property taxes, Colorado’s are actually fairly low. They are the third-cheapest overall, which can make a higher-cost home more affordable to keep long-term. Additionally, the Centennial State does have senior property tax programs that can help reduce the cost further.

Part-Time Job Opportunities

Many retirees have little trouble finding a part-time job in Colorado, especially if they retire in or near a larger city or town. The Centennial State weathered the coronavirus pandemic fairly well. As of April 2020, the unemployment rate hit 12.2 percent, which was significantly below the national average at that time, which came in at 14.7 percent.

Colorado has also been ahead of the national average during recovery. In September, the unemployment rate in the Centennial State was 6.4 percent. In comparison, the national average during that time was 7.9 percent, marking a full 1.5 percent difference.

Now, it is crucial to remember that the COVID-19 situation remains incredibly fluid. Some states are seeing a possible resurgence, and certain ones are even having to enact new measures in an attempt to slow the spread of the virus. As a result, it could be challenging to find part-time jobs for a while, or at least until the pandemic calms.

Best Cities for Retirees in Colorado

The city you choose has a substantial impact on your quality of life. If you’re thinking about heading to Colorado, you need to select a city that has the right kinds of amenities and lifestyle.

If you don’t know where to begin, Littleton is worth considering. There are ample recreational opportunities and a bustling downtown. Plus, you’re close to hiking and biking trails, and the city hosts a wide range of festivals and celebrations.

Englewood is another destination that should be on your shortlist. For outdoor enthusiasts, it’s hard to beat. Additionally, it’s only 20 minutes away from Denver by car, ensuring you can get into the city with ease.

If you’d rather choose a smaller town, you might enjoy Evergreen. There’s plenty to do, and it’s popular with seniors. You’ll also find plenty of options for appreciating the great outdoors.

How Much Money You Need to Retire Well in Colorado

Since Colorado has a moderate cost of living, you do need access to a decent amount of income if you’re going to retire well in the Centennial State. While the city you select is also a factor, making additional savings necessary to maintain a comfortable lifestyle, even lower-cost areas in Colorado may be more expensive than what you find in other states.

Overall, if you have access to about $65,418 per year in income, retiring well in Colorado is definitely possible. Taking care of your needs shouldn’t be an issue with that much cash, and you’d be able to handle some wants, too.

Have any tips that can help someone retire well in Colorado? Share your thoughts in the comments below.

How to Retire Well in Maine

October 15, 2020 By Tamila McDonald Leave a Comment

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.

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

September 25, 2020 By Tamila McDonald Leave a Comment

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.

How to Retire Well in Iowa

September 17, 2020 By Tamila McDonald Leave a Comment

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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