Delaware Named Best State to Retire in the U.S. for 2023, Surpassing Iowa

Delaware has claimed the top spot as the best state in the United States for retirees in Bankrate's annual ranking. The small state, known as the "First State," earned its position due to its high marks in affordability, access to quality healthcare, overall well-being, and other categories.

Bankrate ranked states based on five key metrics, with affordability weighing the most heavily at 40% of each state's overall score. Well-being accounted for 25%, access to high-quality healthcare for 20%, weather for 10%, and crime for 5%. Delaware, previously ranked second in 2023, surged to the first place due to its affordability metric.

Analyzing the economic landscape, Bankrate analyst Alex Gailey highlighted the rising cost of living as a driving factor in Delaware's ascent. In recent years, food prices have escalated significantly, with Americans spending more of their income on food than in the past three decades. Additionally, home prices rose by 5.3% and auto insurance increased by 19.5% year over year.

Retirement savings continue to be a concern for many Americans. Only 20% of workers aged 55 or above have saved $447,000 or more, according to Prudential Financial's 2024 Pulse of the American Retiree Survey. A separate study on Gen X's retirement preparedness showed that half of the respondents said they would need a "miracle" to retire comfortably.

While Delaware's cost of living is higher than the national average, it excelled in other affordability metrics. The state boasts the absence of state or local sales tax and exempts residents from paying income tax on social security benefits. Its racial and ethnic diversity, as well as its high proportion of residents aged 62 and above, also contributed to its top ranking.

Access to high-quality healthcare was another vital consideration for retirees, and Delaware stood out in this regard as well. According to Gailey, access to good healthcare is crucial in retirement, given the significant costs incurred.

Conversely, Alaska was ranked the lowest at number 50. Its poor performance across various metrics led to its low ranking. Other states such as New York, Washington, and California also received low rankings due to their high costs of living. Gailey emphasized the challenge of living on a fixed income during retirement, especially when expenses are high.

Overall, Delaware's top-ranking position reflects its appeal to retirees due to its affordability, healthcare access, diversity, and strong presence of older residents. As retirees continue to navigate the financial challenges associated with retirement, choosing a state with favorable conditions becomes increasingly crucial.