Retirement planning is all about making the right decisions. And one of the biggest decisions you'll face is choosing where to live. In this video, Johnathan Rankin from Theorem Wealth Management is breaking down the best states to retire in 2023. With over 234K Americans moving to retire in 2022, it's important to understand what factors you should consider. WalletHub recently released its list of the most retirement-friendly states in the country, based on Affordability, Quality of Life, and Health Care.

It's important to understand the metrics that go into these studies as what's important to you may not be reflected in the rankings. Join us as we explore the best states for retirement in 2023 and discover the difference between metrics and reality. While WalletHub ranks the best states, according to a study by AARP, retirees are relocating to completely different places than the “Best States to Retire”

@Wallethub   Study: https://wallethub.com/edu/best-and-worst-states-to-retire/18592

@AARP  Top 5 States Where Retirees Are Moving: https://www.aarp.org/retirement/planning-for-retirement/info-2023/most-popular-relocation-states.html

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Read The Transcript

In this video we are discussing the best states to retire to in 2023

Hey everyone I’m Johnathan Rankin with Theorem Wealth Management, where our goal is to help you maximize your retirement.

When it comes to retirement, there are many decisions you need to make. From figuring out when to take your social security to deciding how much you'll spend in retirement, the choices can be overwhelming. But one decision that can have a big impact on the quality of your retirement years is where you choose to live.

Think about it, have you ever heard the saying "Home is where the heart is"? Well, the same goes for retirement. The old saying isn’t “home is where the work is”. Many people relocate for work throughout their career and it takes them to places they never thought they would end up when they started out. That is exactly what happened to me. I was born and raised in Sacramento CA and went to California State University Sacramento. When I was in college I never imagined that I would live anywhere else and then immediately upon graduating I moved to Phoenix and then a decade later I moved again to Dallas.

But where you end up for your career might not be where you want to spend your retirement. According to a recent study over 234K Americans moved to retire in 2022. That was 4% more than in 2021.

1 in 8 retirees who relocate do so to cut housing expenses. With the high levels of inflation we have seen over the past few years, cutting costs can be very important when it comes to your long term retirement success. Last year, Florida was the most popular state to move to, followed by North Caroline, Michigan, Arizona and Georgia.

Those might be the most popular, but are they the best state to retire?

When you break down what people want in retirement, it really comes down to 6 things.

Affordability, Safety, Culture, Access to good Healthcare, good weather and family.

Some of those are individualized like proximity to family and even possibly healthcare if you need a particular specialist.

To help break down the best states to retire in, Wallet Hub recently released their list of the most retirement friendly states in the country. WalletHub compared the 50 states across three key dimensions: 1) Affordability, 2) Quality of Life and 3) Health Care.

They evaluated those dimensions using 47 relevant metrics each with a different weight based on importance. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for retirement.. So when you think about those 6 things people want in retirement Affordability, safety, culture, access to good healthcare, good weather and proximity to family, Wallet hub went a step further and attached measurables so you can quantify each aspect.

The Affordability dimension could have a maximum score of 40 took into account the adjusted cost of living, tax-friendliness, and the cost of in-home services and adult day health care, among others. The Quality of Life dimension included factors like elderly-friendly labor market, access to public transportation, mild weather, and access to adult volunteer activities, among others. Finally, the Health Care dimension considered the percentage of fully vaccinated residents, the availability of healthcare professionals, and drinking-water quality.

Each state was given a score based on the weighted average of all metrics, and the final ranking was determined by the overall scores. So based on that, the number one state to retire is Virginia. They had the highest total score. Right behind them was Florida, Colorado, Wyoming and Delaware.

That top 5 is a lot different than the list of where people are actually moving to which was Florida, North Carolina, Michigan, Arizona and Georgia.

Based on the metrics in the Wallethub study, Florida ranks #2, North Carolina #12, Michigan #28, Arizona #20 and Georgia#27.

That is a big difference between metrics and reality of what people are actually doing. That is because the study weights factors in a way that may not be the way you would rank them in importance. For example, the cost of living is only a total of 25% of the affordability dimension and Tax Friendliness on estate or inheritance tax accounts for 12.5% of that same dimension. If you aren’t planning on leaving a large inheritance or that is just not a priority for you, that might change how you view a certain state. In fact if because of the weightings, it might not tell the whole store. For example, many studies show that Hawaii is by far the most expensive state based on cost of living, but in the wallet hub study, the affordability dimension ranks them at 38th most affordable in stead of dead last  That is why it is important to understand the metrics that go into studies like this before you make any big decisions. Because what might be important to you may not be what’s measured in studies like this. If you want to see the 5 worst states to retire, make sure you check out this video coming up next.

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