Retirees Who Regret Moving Say These 8 States Aren’t Worth the Hype

When it's time to retire, many decide to pull up stakes and head for greener pastures. But what happens if the new locale isn't all you hoped it would be? Many retirees who move end up regretting their choice of a new home. And making a move to the wrong place is one of the biggest money mistakes to avoid in retirement.

Explore some of the states that retirees flock to, but many come to regret.

Editor's note: Tax information throughout is sourced from the Tax Foundation. 

Florida

The state makes up for its lack of a state income tax with relatively high sales taxes, currently at an average 7.02% combined state and local sales tax rate. Plus, it has a 0.74% effective property tax rate, which is relatively high for owner-occupied properties.

Notably, insurance premiums have skyrocketed in recent years, which has led to buyer's remorse for many out-of-state retirees. For example, following multiple hurricanes in the southwest part of the state, many retirees who had been hoping to soak up the sun in hotspots like Cape Coral are left with soaring costs that have quickly turned paradise into a never-ending money pit.

Texas

In recent years, the Lone Star State has become a magnet for retirees looking to escape state income taxes. The tax break is appealing, at least on paper. But after moving, many new retirees discover some unfortunate trade-offs.

For starters, Texas has relatively high property taxes, at a 1.36% effective property tax rate, which could make homeownership expensive, even with a paid-off residence. Plus, the average combined state and local sales tax rate of 8.20% puts a damper on budgets at every turn.

Beyond costs, Texas has been ranked low on several lists regarding health care access, meaning the state's health care resources are relatively limited. For aging retirees, that could be a real dealbreaker.

Arizona

Arizona is another sunny retirement destination that looks great on paper. But when it comes down to the details, the math doesn't always work out as expected. One major surprise to retiree transplants is the sheer cost of running an air conditioner in the relentless heat of the Arizona desert. Utility bills alone could amount to around $400 per month, which is significantly less than the rest of the country.

Generally, the cost of living in the Grand Canyon State is 6.4% above average compared to the rest of the U.S., according to BestPlaces.net.

Nevada

Nevada's reputation as a tax-friendly state makes it an attractive option for many retirees, especially those leaving high-tax states like neighboring California. But the lack of a state income tax doesn't automatically make the Silver State affordable.

Everyday expenses, from groceries to utilities, are often higher than incoming retirees expect, especially in popular areas like Las Vegas and Reno. For example, Reno's cost of living is 18.6% higher than the U.S. average, and Las Vegas' is 10.6% higher, according to BestPlaces.net. When you throw in the extreme summer heat and limited health care access in much of the state, some retirees aren't quite happy to call Nevada their new home.

Delaware

Delaware's lack of a sales tax and relatively low property taxes make the First State seem like a great option for retirees on a budget. That's especially true when you consider the lack of income taxes on Social Security income.

But unfortunately, ongoing health care shortages across the state have put a damper on the dreams of many Delaware retirees. Additionally, the coastline location puts the state at significant risk of storms and flooding. The state isn't a stranger to nor'easters, which could be dangerous for everyone, including retirees.

Tennessee

As another state without an income tax, Tennessee draws in a crowd of retirees hoping to enjoy a slower pace. But it seems that too many people have decided Tennessee is the place to be. Since 2010, Tennessee's population has grown by 10.9%, according to USA Facts. 

A rapidly growing population has also pushed housing prices higher, with Zillow showing average home prices in the state jumping from around $230,000 in 2021 to over $320,000 today. This makes it difficult for seniors to find an affordable place to call home.

Additionally, the state makes up for no income tax with some of the highest sales taxes in the nation, at an average combined state and local sales tax rate of 9.61%. For retirees seeking a low-cost escape, Tennessee doesn't always live up to its budget-friendly reputation.

Colorado

Retirees seeking natural beauty and fresh mountain air have begun pouring into Colorado. While the scenery is beautiful, Colorado's growing crowd of newcomers is forced to compete over relatively scarce housing. That's a recipe for rising housing costs, which takes a toll on most retiree budgets. Although housing prices have started to level out in this state, median sale prices are still at about $530,000, according to Zillow.

Colorado has a flat 4.4% income tax and an average 7.9% combined local and state sales tax rate. But both could add up to take a substantial bite out of any retiree's fixed income.

Idaho

Idaho has gained attention as an up-and-coming retirement spot thanks to its natural beauty and relatively low taxes. Many retirees move to the Gem State seeking a slower pace of life, easy access to nature, and lower costs.

While Idaho might deliver on natural beauty, it doesn't deliver on lower costs. In fact, the cost of living in Boise, Idaho's capital city, is 19.6% higher than the rest of the U.S, according to BestPlaces. Additionally, Idaho's income tax of 5.3% and sales tax of 6% could add up quickly for retirees on a budget.

Bottom line

The grass isn't always greener on the other side. Before you decide to move to a new place to call home as a part of your retirement plan, consider making more than a single visit to the place. If possible, give it a trial run by renting for a couple of months to decide if you like it before completely moving your life.

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