Iowa has emerged as the top state for retirement in 2023, beating out better-known havens like Florida and Arizona, according to a ranking by consumer financial services company Bankrate. The state’s success in the ranking is attributed to factors such as affordability and access to healthcare.
Alex Gailey, who researched and wrote the article for Bankrate, said,“I thought it would be one of the traditional warmer states like Florida, Georgia or Arizona, but as I looked into the data used to create the list, it made more sense that Iowa came out on top because the methodology I used put an emphasis on affordability.”
While Iowa ranks 38th for weather and 31st in well-being, it secured the top spot due to its third-place ranking in affordability, 11th in quality and cost of health care, and 12th in low crime rate. Furthermore, retirees account for 16.7% of Iowa’s population, making it 16th in the nation for the percentage of retirees.
Rachel Flint, vice president of Hubbell Homes, a top Des Moines metro developer that has a growing array of senior-oriented housing in its portfolio, cited a national statistic from AARP and said that there are 10,000 people turning 65 every day.
One significant factor contributing to Iowa’s appeal is its tax policy. Starting in 2023, Iowans over the age of 55 are exempt from paying state taxes on retirement income and Social Security benefits. This incentive, along with a partial exemption on property assessment for those 65 and over, adds to the state’s affordability for retirees.
Although Iowa faces downsides such as colder weather, tornado frequency, and a lack of racial and ethnic diversity, its emphasis on affordability has paid off in attracting retirees. The state’s commitment to eliminating income taxes may be the key to retaining more people for their retirement years, as many consider staying close to family a crucial factor.
However, stating that many were considering retirement to “more tax-friendly states like Florida, where there is no state income tax, Tim Hawkins, president of WealthCharter Retirement Planning in Ankeny said, “I don’t think that eliminating the income taxes will necessarily attract people to retire here from other states but I think it will probably result in retaining more people to stay here.”
Looking ahead, demand for affordable senior housing is expected to grow in Iowa, with developers like Hubbell Homes expanding their senior-oriented housing offerings.
“Hubbell has designed our 55+ spaces with a lot of intentional amenities that can be used year-round (golf simulators, fitness centers, gathering areas, etc.) as well as heated, indoor parking because we understand many in this age bracket are not a fan of Iowa winters,” source quoted Flint as saying in an email.
The strategic inclusion of amenities for older residents, along with efforts to accommodate retirees’ desire to stay close to their families, is likely to further enhance Iowa’s appeal as a retirement destination.
