10 Best States to Retire in 2027

Florida and Tennessee: the two states most retirees compare first

Almost every 2027 retirement short-list narrows to the same pair once the spreadsheet is done: Florida for the headline lifestyle and Tennessee for the dollar-for-dollar value. They win for overlapping but distinct reasons, and understanding the split tells you which one is actually your best fit.

Florida's case is built on the cleanest tax picture in the country combined with year-round warmth and enormous, established retiree infrastructure. It has no state income tax, no tax on Social Security or pension distributions, and no estate or inheritance tax. Metros like Tampa, Orlando, Naples, and Sarasota offer deep healthcare networks and 55+ communities where a new arrival can build a social circle in weeks. The trade-off is cost: a median home near $400,000 and, more importantly, property-insurance premiums that have climbed sharply because of hurricane exposure. In some coastal counties, wind and flood coverage now rivals a second property-tax bill, and that line item is the single biggest reason a Florida budget blows past projections.

Tennessee wins the value crown by delivering most of Florida's tax advantage at a materially lower entry price. It also has no state income tax — the old Hall tax on investment income was fully phased out — so Social Security, pensions, and 401(k) withdrawals are all untaxed at the state level. The median home sits around $340,000, and the broader cost of living runs well below the national average. Nashville anchors a surprisingly strong healthcare economy (it's the headquarters city for HCA and a cluster of hospital operators), while Knoxville and Chattanooga add options. You give up ocean beaches and true year-round warmth — Tennessee has four seasons and real winters in the higher elevations — but you gain the Smoky Mountains, lakes, and a budget with genuine breathing room.

The honest framing: Florida is the best all-around pick if warm weather and turnkey retiree amenities top your list and your budget absorbs insurance. Tennessee is the smarter buy if you want the tax savings and a lower cost basis and you don't need the beach. Neither is objectively "correct" — the right answer is the one whose trade-offs match your health, your income mix, and your tolerance for heat versus seasons.

How to decide between a warm tax haven and a low-cost value pick

Run the decision as a sequence of filters rather than a gut call. The order matters because the first filter — how your specific income is taxed — can eliminate a "no income tax" state that still taxes the exact dollars you live on, or promote a state with modest income tax but a huge retirement exclusion.

Start with your income mix. Both Florida and Tennessee exempt essentially all retirement income, so for a pension-and-Social-Security retiree they're a wash on income tax and the decision moves to cost and climate. But if you're comparing against runners-up, the nuance bites: Georgia offers a retirement-income exclusion up to $65,000 per person over 65 and a flat 5.39% rate, which can net out cheaper than a no-income-tax state once property and insurance costs load in. Pennsylvania levies a flat 3.07% income tax yet fully exempts pensions and 401(k) distributions — excellent for a pensioned retiree, less so for one living on taxable brokerage gains.

Second, weigh climate against your health, not just your preference. Heat, humidity, cold, and altitude each affect mobility and comfort differently as you age. Florida's summer heat and humidity are constant; Tennessee's winters bring cold snaps but nothing like the North. Third, price in healthcare *access*, not merely quality rankings — a specialist 60 minutes away is a real cost that a glossy "best hospitals" list won't show. Both Florida and Tennessee clear this bar in their metros.

Fourth, look past income tax to the whole tax stack. Some no-income-tax states recover lost revenue through higher property or sales taxes, so a state that looks free on paper can cost more in practice — always model the full picture before you commit.

The concrete numbers behind each state

Numbers turn a preference into a decision. Here is the specific, current data that separates the contenders, starting with the two leaders and moving through the runners-up that round out a serious 2027 short-list.

Florida — median home price about $400,000; no state income tax; no tax on Social Security, pensions, or 401(k) withdrawals; no estate or inheritance tax. Sales tax is moderate. The variable that dominates the budget is property insurance, which in hurricane-exposed counties can run several thousand dollars a year and has risen faster than home prices. Healthcare access is strong across Tampa, Orlando, Naples, and Miami.

Tennessee — median home price roughly $340,000; no state income tax; retirement income untaxed; cost of living well below the national average. Sales tax is on the higher side, which is how the state replaces income-tax revenue, so factor it into everyday spending. Healthcare concentrates in Nashville, Knoxville, and Chattanooga.

South Carolina — median near $370,000; does not tax Social Security and grants generous retirement-income deductions; top income rate around 6.2% before deductions. Strong draw for coastal and golf-oriented retirees around Charleston, Greenville, and Hilton Head.

Arizona — median about $450,000; low flat 2.5% income tax; Social Security untaxed; dry warmth, hot summers, mild winters. Phoenix and Tucson offer deep healthcare, including a major Mayo Clinic campus. Abundant active-adult communities.

Wyoming — median around $370,000 (Jackson far higher); no state income tax; very low property and sales taxes; frequently rated the most tax-friendly state overall. The trade-off is rural healthcare access that can require long drives.

Delaware — median about $390,000; no sales tax; low property taxes; Social Security untaxed plus retirement-income deductions for those over 60; top income rate near 6.6%. Coastal towns like Lewes and Rehoboth Beach draw East Coast retirees who value proximity to Philadelphia and Baltimore.

Nevada — median around $450,000; no state income tax; retirement income untaxed; higher sales tax; dry, warm, entertainment-rich around Las Vegas and Reno.

North Carolina — median about $370,000; flat, declining income tax of 4.25%; Social Security untaxed; mountains-to-coast geography with strong medicine in the Research Triangle (Duke, UNC) and Charlotte.

Georgia — median about $340,000; retirement-income exclusion up to $65,000 per person over 65; flat 5.39% rate; Social Security untaxed; warm climate and reasonable costs outside metro Atlanta.

Pennsylvania — median about $280,000, among the lowest here; flat 3.07% income tax but full exemption on Social Security, pensions, and 401(k) distributions; strong healthcare near Pittsburgh and Philadelphia; four full seasons with cold winters.

Property and sales taxes deserve a second look because they quietly reshape these rankings. Alabama and Mississippi pair low property tax rates (roughly 0.4%–0.6% of home value) with broad retirement-income exemptions. Texas and New Hampshire have no income tax but lean on property taxes often running 1.5%–2.5% of assessed value — enough that a moderate-income-tax state with low property levies can be cheaper overall. On healthcare quality, Minnesota and Wisconsin consistently rank near the top for physician density and hospital networks, while rural stretches of Idaho and Montana can mean 60-plus-minute drives to a specialist.

Sequencing your move and the runners-up worth weighing

Picking the state is step one; executing the move well is where retirees save or lose thousands. Sequence it deliberately.

First, establish domicile correctly. If you're leaving a high-tax state, the new state's tax benefit only lands once you've genuinely changed residency — driver's license, voter registration, primary-home designation, and time-in-state documentation. Second, lock down healthcare before you list your current home: confirm your Medicare Advantage or Medigap plan is offered and well-rated in the new county, and that your specialists have in-network equivalents. Third, price insurance *before* you make an offer, especially in Florida, where a wind/flood quote can change which neighborhood — or which state — makes sense. Fourth, rent for a season before buying if you can; a Florida August or a Tennessee January tells you more than any ranking.

Among the runners-up, match the state to a specific lifestyle need. South Carolina suits mild winters, golf, and historic coastal towns. Nevada fits retirees who want desert warmth and entertainment and don't mind extreme summers. Wyoming and rural low-cost picks like Arkansas or Kentucky (median homes under $250,000) reward self-sufficient retirees who value scenery and low taxes over urban medicine. Colorado draws active retirees with hiking and skiing but at home prices often above $550,000. The through-line: the best states to retire in 2027 are the ones where the tax math, the healthcare map, and your daily climate comfort all point the same direction — for most people, that's Florida or Tennessee, with a runner-up chosen to fill whatever the leader can't.

Related questions

Which states have no tax on retirement income at all?

Florida, Tennessee, Nevada, Wyoming, and Texas levy no state income tax, so Social Security, pensions, and 401(k) withdrawals go untaxed at the state level. Watch property and sales taxes, which several of these states raise to offset the missing income-tax revenue.

Is Florida still worth it given rising insurance costs?

Yes for many retirees, but only after you get an actual wind and flood quote for the specific county. Inland and non-coastal areas carry far lower premiums than beachfront. Budget insurance as a fixed cost alongside the mortgage before committing.

What's the cheapest state on this list to buy a home?

Pennsylvania, with a median near $280,000, is the most affordable among the leaders, and it fully exempts pensions and 401(k) income despite a 3.07% flat tax. Rural Arkansas and Kentucky drop under $250,000 but with thinner rural healthcare.

Do I need to change my legal residency to get the tax break?

Yes. The new state's tax advantage only applies once you've genuinely established domicile — driver's license, voter registration, primary-home designation, and documented time in state. High-tax states can challenge a sloppy move, so keep records.

Which state is best if healthcare access is my top priority?

For top-ranked physician density and hospital networks, Minnesota and Wisconsin lead. Among warm-weather picks, Florida's major metros and North Carolina's Research Triangle (Duke, UNC) combine strong medicine with retiree-friendly living.

FAQ

What is the best overall state to retire in for 2027?

Florida remains the top overall choice thanks to no state income tax, no tax on retirement income, no estate tax, and a warm year-round climate. Its median home price near $400,000 and rising property insurance are the main trade-offs to budget for carefully.

Which state offers the best value for retirees?

Tennessee is the standout value: no state income tax, retirement income untaxed, a cost of living well below the national average, and a median home price around $340,000. Nashville and Knoxville provide solid healthcare, though you trade beaches for four-season mountain living.

How were these states ranked?

Rankings weigh the factors that matter most on a fixed income: state tax rules (especially on Social Security, pensions, and 401(k) income), healthcare access and quality, climate, and overall cost of living — using current tax rates and affordability data rather than lifestyle preference alone.

Are there states with no tax on retirement income?

Yes. Florida, Tennessee, Nevada, Wyoming, and Texas have no state income tax, so retirement income is untaxed at the state level. Because several offset that lost revenue with higher property or sales taxes, always model the full tax stack before deciding.

Does healthcare access really change the rankings?

Significantly. A state can rank well on cost yet require long drives to specialists in rural areas. Metros in Florida, Tennessee, North Carolina, and Arizona clear the access bar, while rural Wyoming, Idaho, and Montana may mean 60-plus-minute trips to specialty care.

Can I find affordable housing in the top-ranked states?

Affordability varies within each state. Tennessee (~$340,000), Georgia (~$340,000), and Pennsylvania (~$280,000) offer lower medians, while Florida (~$400,000), Arizona (~$450,000), and Nevada (~$450,000) run higher. Compare specific regions, since coastal and resort areas skew well above the statewide figure.

Sources

• https://taxfoundation.org/
• https://www.kiplinger.com/retirement
• https://www.zillow.com/research/data/
• https://money.usnews.com/money/retirement
• https://www.kff.org/statedata/
• https://www.aarp.org/livable-communities/
• https://www.ssa.gov/
• https://www.medicare.gov/

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