Taking Cost of Living Into Account

April 21, 2021


Choosing the best place to retire is about more than finding a location with a sunny, warm climate or a short drive to ski country. While it’s important for clients to consider their proximity to loved ones and access to the things they love to do, make sure they also consider the financial cost of where they live. An island paradise may sound like the ideal place to retire, but Hawaii boasts one of the country’s highest income-tax rates—and the highest overall cost of living.

While some of these expenses may seem minimal, they can add up—especially over a long retirement. Taking time to consider them can help ensure that, wherever your clients end up, they’ll be able to enjoy their homes for years to come.


Calculating the Cost of Living

It may be tempting to measure the cost of living with a single metric, such as an area’s median home price or the income-tax burden. These expenses certainly play a role in the total cost of living, but there are other considerations as well. For example, some states that don’t have an income tax still charge property and sales taxes. Beyond total tax burden, everyday costs for things like groceries, utilities, and transportation vary from place to place. Healthcare costs can become a burden during retirement as well, so it’s also a good idea to consider the availability of quality, affordable healthcare as clients make their decisions about where to retire.

Consider how different areas of the country compare by analyzing the information in the following paragraphs.


The Northeast

The Northeast is generally one of the most expensive regions in the country when it comes to cost of living, though it also ranks very highly in terms of access to high-quality healthcare. For those looking to retire in the region, New Hampshire has no state income tax and has the lowest overall cost of living.


The West Coast and Southwest

On the West Coast, Washington’s lack of state income tax makes it more attractive than Oregon or California. For clients who don’t mind moving inland a bit, however, New Mexico boasts the lowest overall cost of living in the region on the strength of its generally low housing costs and low income-tax burden. While Arizona’s housing costs push its overall cost of living a bit higher than New Mexico’s, the quality of its healthcare also ranks among the highest in the region.


The Southeast

Florida’s lack of income tax has long made it an attractive target for retirees, but neighboring Georgia ranks significantly better in terms of cost of living. The higher cost of living in North Carolina and South Carolina also comes with better healthcare-quality rankings, so they also may be worth a look for retirees interested in this region.


The Mid-Atlantic and Midwest

It generally costs less to live in the Midwest than it does on the coasts. Oklahoma, Kansas, and Missouri are among the least-expensive states in the country when it comes to cost of living, in part due to their low income-tax burdens and inexpensive housing prices. For retirees interested in the northern Midwest, Michigan, and Indiana offer the lowest cost of living in the region.

Wherever your clients choose to retire, it’s wise to help them do some research and factor the cost of living into their decisions. As The Official Sponsor of Retirement, Pacific Life will be there for you to help clients not only find the right place for their desired retirement lifestyles, but to help ensure they can afford to stay there happily for a long time and achieve their retirement goals.




Ask clients to consider all these expenses as they decide where to retire

The Importance of a Diverse Client Base | Pacific Life Annuities


This material is educational and intended for an audience with financial services knowledge.


For more information on retirement-planning strategies, please contact the Retirement Strategies Group at (800) 722-2333, or email us at RSG@PacificLife.com



Picture of Pacific Life Annuities

Pacific Life offers a broad and diversified range of products and solutions designed to help individuals and families achieve asset growth, sustainable retirement income, and long-term financial independence. We also help businesses manage and fulfill their long-term retirement plan commitments to employees.

Pacific Life, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor or attorney.

Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. 

Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company (Newport Beach, CA) and an affiliate of Pacific Life & Annuity Company. Variable and fixed annuity products are available through licensed third parties.

No bank guarantee • Not a deposit • Not FDIC/NCUA insured • May lose value • Not insured by any federal government agency

For financial professional use only. Not for use with the public.