For those saving and planning for the challenges of retirement, living in certain states can cost a lot, while living in others can give a good planner an edge.
MarketWatch retirement and personal finance writer Robert Powell taps into analysis from LPL Financial Research, which has created a Retirement Environment Index of measures conducive to retirement planning. Powell notes that the basket of factors LPL looks at include a state’s fiscal health, access to health care, quality of life, and employment and education opportunities, and wellness. Here's what LPL says about highlights of the 2016 index:
- Rounding out the top five with Virginia, are, in order, South Dakota, Wyoming, Michigan and Iowa. Michigan was a new addition to this elite group, lifted from its previous ranking of No. 19 with improvement within the financials category.
- The bottom five states, each with an overall F grade, are California, Alaska, New York, Oregon and New Jersey. Alaska and Oregon slipped from their previous rankings, while New Mexico, previously No. 49, was upgraded to an overall D grade.
- California's bottom position was hampered by an elevated tax burden (fifth highest in the nation) and an extremely high cost of living. Healthcare did not play to the state's favor either, as healthcare expenditures per capita are below national averages, and it has a below-average percentage of pre-retirees who are covered by health insurance.
- New York was the only state to have three categories ranked with a grade of F, including housing, community quality of life and financial.
- Budgetary woes in Illinois knocked the state's financial category rating down one notch to a D from last year's C rating. Since last year, the average local and state tax burden rose nearly 1%, median income declined, and the cost of living rose.