The Most Expensive States to Retire In

Last time we did the cheapest states. Today, the other end of the menu.

And there's a twist that ruins most retirement advice: two of the ten most expensive states have no individual income tax. One of them is the single most popular retirement destination in America.

Because "expensive" isn't one thing. It's ten different things wearing the same label — housing, property tax, insurance, groceries, estate tax, care costs — and each of these states is expensive for its own particular reason.

We used BEA's 2024 Regional Price Parities, where 100 = the national average price level, then layered on property taxes, insurance, estate taxes and long-term care.

Here's where your retirement dollar gets mugged. 👇

BEA 2024 Regional Price Parities. D.C. came in at 109.9 but isn't a state. Oregon (103.4) and Colorado (103.1) are right behind Florida — the cutoff is razor-thin.

Overall price level 10.7% above average. Fine. Then look at housing: 154.3.

That's roughly 54% above the national benchmark, the highest in the country by a wide margin, and it single-handedly explains California's ranking. Census data for 2019–2023 put the median owner-occupied home value at $695,400, median gross rent at $1,956, and median monthly owner costs with a mortgage at $2,865 — and statewide medians understate the coastal metros people actually want.

The long-term care number is the one that should genuinely scare you. Genworth's 2024 survey:

Three years of private-room nursing care in California is roughly $546,000. That's a portfolio, not a line item.

But the flip side: California's expense is also California's opportunity. A retiree sitting on a paid-off $900,000 house has an enormous, illiquid asset. Selling and moving to a state at 87 on the price scale doesn't just cut their costs — it converts a house into a portfolio. For a lot of Californians, the highest-return retirement move available isn't an investment. It's a moving truck.

Hawaii's 110.0 puts it a hair behind California, but the composition is different and arguably worse.

Its goods price level was 111.6 — about 11.6% above national. Most cost-of-living conversations obsess over rent and ignore goods, but groceries, appliances, building materials and household basics are a huge share of an actual retiree's spending, and on an island they all arrive by boat.

Now the trap almost everyone falls into. Hawaii's effective property-tax rate is roughly 0.30% — among the lowest in America. Sounds like a gift.

It isn't, because you multiply a rate by a price:

Identical bill. Always budget the dollar amount, never the percentage.

Hawaii also has an estate tax: as of January 1, 2026, a $5.49M exemption with rates from 10% to 20%.

Housing rent at 134.3 is bad. The property taxes are the headline.

Tax Foundation data put New Jersey's effective property tax at roughly 4.81% of personal income — among the very highest in the nation.

And here's the number that should reframe how you think about owning a home in retirement. Census data for 2020–2024 show New Jersey's median monthly owner costs for homeowners with no mortgage at all: $1,232/month.

That's roughly $14,800 a year to live in a house you already own outright. Property tax, insurance, utilities, maintenance. The mortgage ended; the housing bill didn't.

New Jersey also still imposes an inheritance tax in certain situations — which depends on who inherits, not just how much. Worth knowing if your plan involves leaving money to anyone other than a spouse or child.

107.9 overall, 122.2 on housing — but New York's real distinction is the total bill.

Tax Foundation's state-local tax burden data (2022) ranked New York highest in the nation at 15.9% of state income, with Connecticut at 15.4% and Hawaii at 14.1%. Not retirement-specific, and a few years old — but it captures something a headline income-tax rate never does: state income tax + local income tax + property tax + sales tax + everything else, added up.

New York is also the state where the average lies hardest. Manhattan and a small town in the Southern Tier are not the same country, let alone the same budget. The statewide index tells you to be careful; it doesn't tell you what your county costs.

No broad individual income tax on wages or ordinary investment income. Price level: 107.0. Housing: 126.0.

So where does the money go? Housing, mostly. But retirees with larger portfolios should note two more things:

A long-time Seattle homeowner with a paid-off house and a decent 401(k) can cross $3 million without ever feeling wealthy. That's the point.

105.8 overall, 128.1 on housing. Excellent hospitals a genuine, underrated retirement asset. Access to world-class medicine is worth paying for, and you will.

Homeowners insurance also runs high: NAIC data via the Insurance Information Institute put the average HO-3 premium at $1,871 in 2022 (dated, but directionally clear).

The one that catches ordinary people: the Massachusetts estate tax has a $2 million exemption as of January 1, 2026, with rates from 0.8% to 16%.

Two million dollars sounds like a lot until you add a Boston-area house, a 401(k) and life insurance. Plenty of people who never considered themselves rich are over that line.

105.0 overall, 121.1 housing, and something almost no other state does to retirees:

Maryland has both an estate tax AND an inheritance tax. The 2026 estate-tax exemption is $5 million, rates 0.8% to 16%.

It also has local income taxes, which means two retirees with identical incomes can owe different amounts depending on which county they live in. Your ZIP code is a tax rate.

Maryland is also wildly uneven internally: the D.C. and Baltimore suburbs are a different financial planet from the rural Eastern Shore or western counties. The statewide number is a blend of both.

No broad income tax. No sales tax. Retiree paradise, right?

Tax Foundation puts New Hampshire's effective property tax at about 4.64% of personal income — second-highest in the country. NAHB data put it near 1.94% of property value, against California's 0.70% and Hawaii's 0.30%.

Run it on real houses:

New Hampshire will happily not tax your income — then collect roughly $13,600 a year from your house. For a retiree whose income is modest but whose home is valuable, that trade can run backwards.

It's a genuinely great deal for someone with high taxable income and a modest house. It's a rough one for the opposite.

103.6 doesn't look alarming. Connecticut's problem is that nothing is cheap:

The estate tax is actually the friendly part: a $15M exemption in 2026 with a 12% top rate — irrelevant to almost everyone.

California is expensive because of one enormous category. Connecticut is expensive because six medium categories stack. Both end in the same place; only one is obvious from the brochure.

America's retirement capital. No individual income tax. And a 2024 price level of 103.4 — putting it in the ten most expensive states in the country.

Housing rent: 122.1. And then the category nobody plans for:

Florida had the highest average homeowners-insurance premium in the nation — $2,677 for HO-3 in 2022.

And that's just the standard policy. Add windstorm coverage, flood insurance, HOA fees, storm deductibles and roof-age requirements, and the annual carrying cost of a Florida home can dwarf the income tax you moved there to avoid.

Do the arithmetic honestly. If you're avoiding, say, $4,000 a year of state income tax and paying $5,000 more in insurance and carrying costs, you didn't save money. You changed which envelope it leaves in.

None of which makes Florida a bad choice — it's a tax-and-lifestyle state, and lots of people are delighted there. Just stop filing it under "cheap."

Say you need $70,000/year for your lifestyle in a state priced at 100:

California to Mississippi on the same lifestyle is a swing of roughly $16,600 a year — $415,000 over a 25-year retirement, before investment returns.

At a 4% withdrawal rate, that $16,600 of annual spending is the equivalent of needing $415,000 more portfolio to fund the identical life. Location isn't a lifestyle preference. It's a line on your balance sheet.

(Illustrative — RPPs measure broad consumption, not a retiree's exact basket.)

The federal exemption is enormous, so people assume estate tax is a billionaire problem. At the state level it isn't.

A paid-off house plus a retirement account plus life insurance clears $2 million more easily than most people think. If you're in Massachusetts or Washington, this belongs in your plan — not your children's.

The ten priciest states by BEA's 2024 measure: California (110.7), Hawaii (110.0), New Jersey (108.8), New York (107.9), Washington (107.0), Massachusetts (105.8), Maryland (105.0), New Hampshire (104.2), Connecticut (103.6), Florida (103.4).

But "expensive" is not the same as "wrong." People pay more to be near grandchildren, near great hospitals, near the ocean, near the life they built. That's a legitimate purchase.

The mistake is accidental expense — moving somewhere for a tax benefit you never actually collect:

So run the whole stack before you move: housing + property tax + insurance + income tax + sales tax + healthcare + long-term care + estate tax. Then compare the two or three places you'd actually live — not the fifty on a chart.

An expensive state with a paid-off house and strong income can work beautifully. A cheap state can turn expensive fast if you rent in its nicest city, need a specialist it doesn't have, or fly out every month to see the kids.

The goal was never the cheapest ZIP code. It's the place where your money buys the life you actually want.

See you next issue. 🪙

Penny Brief is for informational and educational purposes only and is not individualized tax, insurance, investment or relocation advice. Price levels are BEA 2024 Regional Price Parities (U.S. = 100), which measure broad consumption baskets rather than a retiree's specific spending. Property-tax figures are Tax Foundation (share of personal income) and NAHB (share of property value); state-local tax burden figures are Tax Foundation 2022 data and are not retirement-specific. Estate and inheritance-tax figures reflect Tax Foundation's 2026 compilation. Homeowners-insurance averages are 2022 NAIC HO-3 data via the Insurance Information Institute and are not current quotes. Long-term care costs are Genworth/CareScout 2024 national and state medians. Housing figures are U.S. Census Bureau medians for the periods noted. The 2026 standard Medicare Part B premium is $202.90/month before income-related adjustments. Rates and prices change — verify current figures for your specific city and situation before relocating.

Sources: U.S. Bureau of Economic Analysis; U.S. Census Bureau; Tax Foundation; NAHB; Insurance Information Institute / NAIC; Genworth-CareScout Cost of Care Survey; CMS.