Retirement decisions often come down to two numbers: how much you’ve saved and how far that money will actually go once you stop working. But geography plays a bigger role in retirement security than many people realize, and a new analysis shows that some states give older Americans a much stronger financial cushion than others.

A recent study from Caring.com compared states across several key measures of retirement readiness, including average retirement income, accumulated savings, homeownership rates and the annual cost of maintaining a comfortable lifestyle (1). The researchers then ranked each state on how well it positions retirees for long-term financial success.

The results reveal a clear top five: states where income, affordability and supportive tax structures combine to stretch retirees’ dollars further. Below, we break down why these states scored so well and what their strengths can teach you about choosing the right place to live later in life.

Below are the five states that scored highest in the study, and why each one stands out for retirees looking to make their money last.

The state doesn’t top the charts in any single category, but it performs solidly across the board: retirement income, savings and homeownership rates are all close to national averages. What helps Illinois stand out is its relatively affordable housing market compared with coastal states, which can make fixed retirement budgets stretch further.

Still, the state’s higher overall tax burden can offset some of those gains, making Illinois best suited for retirees who value stability over extremes.

A higher-than-average household income helps residents build stronger retirement savings than many of their peers, while homeownership rates remain robust. That financial foundation gives Minnesota retirees a solid cushion, though the state’s higher cost of living can erode some of those advantages. For retirees who have already built up a healthy nest egg, Minnesota offers a stable environment, but it may be less attractive for those who need to make every dollar stretch.

Connecticut, at No. 3, has the highest average retirement savings. And retirees with an adjusted gross income (AGI) of less than $75,000 are partially exempt from taxes on Social Security.

Connecticut is also one of 10 states with active state-sponsored retirement plans, which can make it easier to contribute to savings (since it’s automatic). Many other states are considering retirement mandates.

But if you live in Alabama, Florida, Montana, South Dakota or Texas, you’re out of luck. No steps have been taken toward state-sponsored retirement mandates at this point.

Virginia, which came in at No. 2, has a high median household income of $89,931, which could explain why Virginians have more retirement savings than many other Americans, averaging $492,965, the sixth-highest amount in the country.

According to Caring.com’s study, Delaware is the state that sets people up for the most success in retirement. This is because in Delaware, the average retirement income is eighth-highest in the country (at $31,300 per household). While it’s not the highest, residents have a relatively lower cost of living than many other states, spending on average 16% less on groceries than Colorado and California.

But the state has other perks for seniors: their Social Security retirement benefit isn’t taxed and there’s no shopping tax, either. And, with certain retirement plans like 401(k)s, residents aged 60+ can deduct up to $12,500 from their taxable income. That means they can hold onto more of their money.

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Of course, the top five aren’t the only states worth considering. Your personal priorities, from affordability to health care, could matter even more than a high rank in one study.

Affordability and cost of living: While retirees in Connecticut might have a larger-than-average nest egg, they still fall short of what they need in retirement by 35%, according to the Caring.com study (2). In part, that’s because the state has a higher cost of living, including the cost of health care.

In states that have a lower cost of living for housing, health care, transportation and food, retirees can stretch their dollar further.

When that’s taken into consideration, West Virginia is considered the most affordable state because of its low property costs and lower-than-average costs for groceries and utilities, which allow retirees to live comfortably on $58,190 a year. Trailing behind West Virginia is Oklahoma and Kansas.

Homeownership and housing costs: The Caring.com study focuses on monetary assets rather than physical assets like property. But, if you pay off your mortgage before you retire, you’ll have fewer fixed costs in your golden years, especially if you live in a state that provides property tax relief for seniors.

Almost four in five West Virginians (79.1%) own their homes, followed by Mississippi (75.8%) and Delaware (75.1%), according to Caring.com. While Delaware was the top state for setting up retirees for success, West Virginia and Mississippi didn’t crack the top 10. So while homeownership is important, it’s not the only factor for a successful retirement.

However, owning your own home could potentially serve as a source of passive income as you get older (by renting out a room or basement suite). Or, you could sell and downsize, using the difference to help fund your retirement. And, if necessary, you could access equity in your home.

Tax structure: While federal income tax applies no matter where you live (even abroad), some states have no income tax. Some states don’t tax Social Security benefits or distributions from retirement accounts.

The most tax-friendly state for retirees is Mississippi, according to Kiplinger data (3). Social Security benefits, private and public pensions and withdrawals from retirement accounts like 401(k)s are exempt from state taxes. And there’s no estate or inheritance tax.

However, while tax breaks may be appealing, it’s also important to consider the broader picture when deciding where to retire. For example, Mississippi has a high homeownership rate and tax-friendly environment for retirees. But it also consistently ranks low in healthcare access and outcomes (4).

Health care strength and access: Even if you’ve saved well for retirement, limited access to high-quality health care can increase long-term costs and risks. States with stronger hospital systems, more primary care providers per capita and reliable long-term care options can significantly improve retirees’ quality of life.

Some of the states that rank well for affordability or taxes perform poorly in national health care rankings. Meanwhile, higher-cost states like Minnesota often offer better access to hospitals, specialists and preventive care. For retirees managing chronic conditions or anticipating long-term care needs, this may outweigh other factors entirely.

Retirement readiness isn’t defined by savings alone, it’s shaped by the state you call home. Delaware, Virginia, Connecticut, Minnesota and Illinois rise to the top thanks to strong incomes, manageable costs and policies that support older Americans. But your best-fit state depends on your personal priorities, including affordability, taxes, housing stability and access to quality health care.

A thoughtful look at all these factors can help you choose a place where your savings go further and your retirement lifestyle feels secure, sustainable and satisfying.

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Caring.com (1, 2); Kiplinger (3); Mississippi State Department of Health (4)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.