6 States Where Retirement Costs Are Surprisingly High
- - 6 States Where Retirement Costs Are Surprisingly High
Owen ChaseJanuary 9, 2026 at 10:36 PM
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Many people dream of retirement as the time when they can finally relax, travel, and not worry too much about money. But in certain states, that plan takes a hit fast. Between steep housing costs, unexpected taxes, and hidden fees, retiring comfortably can become expensive in ways most people don’t expect. Here’s a look at ten states where retirement tends to cost a lot more than it should.
California Keeps Squeezing Retiree Budgets
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California stacks up costs quickly. The state’s high income tax—topping out at 13.3%—doesn’t spare retirement income. Property taxes aren’t the worst, but housing prices are still sky-high. Add in a 7.25% sales tax and steep home insurance in fire-prone areas, and retirees are likely to feel the pinch, even with careful planning.
Hawaii Has Island Costs and Then Some
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Hawaii may appear to be paradise, but it has the highest hidden homeownership costs in the country. Maintenance, utilities, insurance, and property taxes collectively amount to over $34,000 per year on average. Shipping delays and high fuel prices make basic needs more expensive. Healthcare access in more remote areas can also be spotty.
New York Collects Big and Often
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New York takes a heavy share when it comes to taxes. In 2022, residents faced the highest overall tax burden in the country at roughly 15.9 percent, with state and local taxes averaging more than $3,500 per person. While there are breaks for pensions and Social Security, everyday expenses can add up quickly, especially for older residents living on fixed incomes.
Connecticut Adds Charges Quietly
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The state taxes Social Security unless your income is below certain thresholds. It doesn’t entirely exempt other retirement income, and its property taxes are consistently among the highest in the country. In 2022, the tax burden reached 15.4%. Even grocery bills exceed the national average, making budgeting feel tighter than expected.
New Jersey Is Tough on Housing Costs
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Property taxes alone make New Jersey a tough pick. The average bill sits around $10,500 per year, which is the highest in the country. Even without a state estate tax, inheritance taxes can catch some families off guard. It's not the best setup for retirees hoping to downsize with ease.
Massachusetts Prioritizes Services, But at a Price
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Massachusetts has excellent healthcare, but the cost of living there doesn’t favor retirees. Hidden homeownership costs amount to nearly $30,000 per year, primarily driven by high insurance and energy bills. While it does offer some deductions for retirement income, many still find themselves paying state income tax on pensions and withdrawals.
Vermont Sneaks In More Than Snowfall
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Social Security is partially taxed, and most other retirement income is treated like regular earnings. The cost of living ranks high, and state and local tax collections per capita hover near the top nationally. Even its estate tax kicks in for estates above $5 million, lower than the federal threshold by a wide margin.
Washington Isn’t Tax-Free Once You Own a Home
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Washington skips the state income tax, which draws attention, but its housing costs tell another story. Hidden homeownership expenses—including maintenance, utilities, and insurance—reach about $27,000 annually. The state’s rainy climate also adds to wear and tear on homes, which can increase repair bills quickly.
Maine Charges More Than Expected
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Maine taxes non-Social Security retirement income up to 7.15%, and estate taxes apply to estates above $7 million. Its tax burden was 12.4% in 2022, ranking among the highest. Property taxes come in strong, too—over $2,800 per capita. Older homes often need updates to deal with winter weather.
Alaska’s Remote Reality Costs More
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Transportation, heating fuel, and groceries come with hefty price tags. Medical care can be far away or limited, depending on location. Retirees often spend more on flights for basic travel or family visits. It’s peaceful and scenic, but expensive in ways that don’t always show up on paper.
Source: “AOL Money”
