NEW JERSEY -- New Jersey was rated the worst state to retire, according to personal finance website WalletHub's annual ranking of 2021’s Best States to Retire.

What's the biggest reason for New Jersey's last place ranking?

"The biggest reason New Jersey finished last is affordability. It has a high cost of living, it's among the least tax-friendly states for retirees, and has the largest share of the population aged 65+ who can't afford a visit to the doctor -- over 8%," said WalletHub analyst Jill Gonzalez. 

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"Other factors that contributed to the state's low ranking include the low number of healthcare facilities per capita, poor quality of public hospitals, and a low well-being index for the population aged 55+," Gonzalez continued. "In addition to this, New Jersey has the biggest share of the population aged 65+ with poor mental health -- more than 11%, and a low percentage of elderly people who are physically active."

More bad news is that a recent study even found that a quarter of Americans expect to retire later than originally anticipated due to the economic impact of COVID-19. With the financial stress New Jerseyans and residents of other states across the nation have faced during the COVID-19 pandemic, it’s likely that many were not able to save a lot of money in 2020.

Where to retire is just as important a question as when to retire. Finding the best state to retire can be a challenge. Even in the most affordable areas of the U.S., most retirees cannot rely on Social Security or pension checks alone to cover their monthly expenses. Social Security benefits increase with local inflation, but they replace only about 39% of the average worker’s earnings. Further, while affordability is one of the biggest concerns when deciding where to retire, there are plenty of other factors to consider, such as how good its health care is (especially during the COVID-19 pandemic), as well as what activities area available to keep retirees busy.

To determine the best states to retire, WalletHub compared the 50 states across 45 key indicators of retirement-friendliness. Our analysis examines affordability, health-related factors and overall quality of life.

 Rank  State Affordability  Quality of Life  Health Care  Score 
50 New Jersey 50 35 33 37.41
49 New York 49 17 27 41.86
48 Mississippi 10 50 49 41.88
47 New Mexico 33 47 36 42.68
46 Rhode Island 45 38 24 42.85

Retiring in New Jersey (1=Best; 25=Avg.)

  • Health-Care Facilities per Capita (47th) 
  • Adjusted Cost of Living (41st) 
  • WalletHub ‘Taxpayer’ Ranking (39th) 
  • Elderly-Friendly Labor Market (38th) 
  • COVID-19 Positive Testing Rate in the Past Week (36th)
  • Annual Cost of In-Home Services (33rd)
  • Percentage of Population Aged 65 & Older (28th) 

So what can be done to improve NJ as a place to retire?

"One of the main things that can be done to improve New Jersey as a place to retire, would be making healthcare more affordable for senior citizens," Gonzalez said. "Another important issue is elder abuse, and New Jersey would benefit a lot from having more laws and protection for retirees in this respect. Other things that could improve in the state is the number of hospitals, and the care that is given to the mental health of those who are retired."

The best states to retire, according to WalletHub, are:

 Rank  State Affordability  Quality of Life  Health Care  Score 
1 Florida 4 6 28 61.09
2 Colorado 13 16 5 60.94
3 Delaware 5 29 22 58.69
4 Virginia 11 7 23 58.61
5 No. Dakota 24 18 6 57.49

To determine the most retirement-friendly states, WalletHub compared the 50 states across three key dimensions: 1) Affordability, 2) Quality of Life and 3) Health Care.

"The most important takeaway from this study is that while retirement means the end of a person's career, it should not also mean the end of financial security, or a lower quality of life. This is why it's very important for those approaching retirement to find the best state to retire to," Gonzalez said.