Texas ranks among costliest states for retirees

A new ranking suggests Texas is among the most expensive states for retirees.

A report from Seniorly, which provides an online directory of over 60,000 senior living communities, ranked the Lone Star State as the seventh-most expensive state for seniors.

The ranking accounted for average retirement income, cost of living, average electricity bill cost and more.

Texas was in the company of larger states like New York and California at the bottom of the affordability rankings. Rhode Island, New Jersey, Connecticut and Massachusetts were also among the most expensive. The most affordable states for retirees were Wyoming, Utah, Montana, Idaho and Virginia, the report found.

The ranking comes as about one-third of Texans are 65 years or older, according to census data.

As a destination state booming with high in-migration, what brought Texas to rank so low?

Christine Healy, Seniorly’s vice president of marketing, pointed to out-of-pocket health care costs in Texas and taxes as the culprit.

Though Texas has no income tax, and despite the homestead exemption and frozen school district taxes for homeowners 65 and older, Kiplinger rated Texas as “least tax friendly” for retirees.

Kiplinger’s Texas State Tax Guide describes the state’s sales tax and median property tax as comparatively higher than other median property taxes in the country.

Healy also pointed to Medicare spending. Seniorly’s analysis noted Medicare spending per beneficiary was highest in the country’s most populous states, including Texas at $13,458 per beneficiary. And while those are government costs, the study suggests seniors are facing out-of-pocket costs proportional to that.

Other statistics, such as cost of living and the percentage of homeowners ages 65 and older who spend under 30 percent of their income on housing, were in line with the rest of the rest of the country, Healy said.

Affordability is one of the top things people consider when deciding where to retire, she said.

“The first is affordability,” Healy said. “The second is personal engagement, like where can people thrive when they age. And the third is access to health care. So this study, in and of itself, is an effort to take a deep dive into that first factor, which is affordability.”