The last chapter of the famous American dream seems very far-fetched, especially in this day and age, so we need to reconsider our choices depending on the cost of living we can afford.

In fact, Goldman Sachs Asset Management completely agrees with it, showing that 75% of retirees nowadays are falling short of their retirement goals.

Moreover, a shocking 25% of them are able to save 70% of their incomes throughout their career. The rest end up simply as empty nesters, dooming themselves to a downgraded lifestyle in their golden periods.

The financial vortex we’re currently dealing with is the number one reason why so many people can’t save too much for retirement, but that’s not all: we also have inflation and recession to blame.

Since Social Security and Medicare funds are forecasted to be completely depleted in the near future, some retirees will have a hard time getting through their retirement years.

When it’s extremely difficult to live a decent life, the first thing that you need to reconsider is the place that you’re currently living in. So we thought it might be useful to reconsider living in some of the following states and analyze the cost of living in each one of them:

Rhode Island

Probably one of the worst states to retire in this day and age is Rhode Island, and the main reasons for that are the taxes and high cost of living. Rhode Island has a very high overall tax burden.

The median property tax rate in the state is the 15th highest everywhere in the United States. Seniors could also have to pay tax on their social security benefits, provided that their federal adjusted gross income is way above $119,750.

The sales tax bite isn’t that bad, though, as Rhode Island is probably one of the few states that collect their own estate tax. Excluding IRAs, seniors who reached their full retirement age could exclude up to $15,000 of their income from their military, government, and private retirement plans. The cost of living here is 0.5% above the national average in Rhode Island.

Utah

One of the few states that still tax social security is Utah. From this point of view, it might not be the ideal place to retire. Pension and various other types of retirement incomes could also be subject to a 4.85% flat income tax levied by the state.

But it’s worth mentioning that seniors could claim a small credit against these taxes. Utah also has a combined state and local sales tax rate above average, at 7.19%. In the meantime, property tax rates are the 8th lowest in the state. The cost of living is only 1.5% above the national average, at 101.5.

Virginia

Virginia isn’t really that unfriendly when it comes to taxes, but combined with the cost of living, retirees could definitely go for better options. For instance, the living costs in the state are 3.1% above the national average.

Sales and property taxes are also very low, and income taxes in Virginia are a bit higher than in other states. More than that, Social Security isn’t really taxed, but other types of retirement incomes are still deductible up to $12,000. In the end, Virginia scores the cost of living of 103.1.

Montana

Montana has a very similar story. With the cost of living of 103.7, the majority of retirement incomes are taxed here. Social Security retirement benefits are taxed, too, even if the taxable amount could differ from the federal taxable amount.

The state doesn’t have a sales tax, but in some areas, they charge for a resort tax instead. The property tax rate is quite low here, and the costs of living are 3.7% higher than the national average.

Colorado

In Colorado, you will be surprised to find out that the cost of living is 5.5% higher than the state average, reaching 105.5. Also, the income tax system lets you get a large tax deduction on retirement incomes.

Taxpayers who fall under 55 years old are also allowed to exclude up to $15,000 from their military retirement plan. Railroad retirement benefits in Colorado are also exempt from the state tax.

As property tax rates are lower, sales tax is somehow high (given that it excludes medicine and groceries), exceeding 11% in some areas of the state.

Idaho

Idaho’s cost of living is 106.1. As Social Security benefits aren’t taxable, other types of retirement incomes are. Public and private pension incomes are somehow taxed, too. Property and sales taxes are also low.

However, it is still one of the few states that taxes groceries, which is surprising, given that they’d rather tax groceries than estate or inheritance taxes. The cost of living here is 6.1% higher than the national average.

Arizona

Unfortunately, Arizona also made it in our list of the worst states to retire in for taxes and cost of living, and the main reason for that is its moderate tax burden on retirees and high living costs.

The state doesn’t tax Social Security benefits, but distributions from 401(k) and other retirement accounts are still taxed. Property taxes in this state might be low, but if you think about it, combined sales taxes are quite high over 8%. In Arizona, the cost of living is 7.2% higher than the national average, scoring 107.2.

Maine

Probably one of the worst states to retire to is Maine. This state scored no less than 111.5 on the cost of living, which is 11.5% higher than the national average.

As Social Security income isn’t taxed in this state, there are other forms of retirement income that are taxed, sometimes as high as 7.15%. The property tax rate is above average at 1.09%. They decided to levy an estate tax, too. As for the sales tax rate, you should expect 5.5%, including groceries, without staples.

Connecticut

If you’re dreaming of moving to Connecticut, you’ve got something going for you. In Connecticut, all types of retirement incomes are taxed under its income tax system.

Even if some Social Security benefits are still tax-exempt like joint and head of household filers registering an Adjusted Gross Income smaller than $100,000, the cost of living here is still quite high: 113.1.

Also, the statewide sales tax rate is no less than 6.5%, excluding groceries, prescription drugs, diapers, some feminine products, but also clothing under $50.

New Jersey

Another not-so-friendly state for retirement is New Jersey. The state marks a high cost of living 14% above the national average. On the bright side, Social Security incomes aren’t taxed, and state income taxes for retirement incomes are low, too.

The low tax is applicable for pensions below $75,000 for single filers and $100,000 for joint filers. But the deal breaker is the property tax rate, especially since it is one of the highest in America.

Vermont

In Vermont, your retirement income would be taxed. It’s worth mentioning that the rates might vary anywhere between 3.35% and 8.75%. Joint filers have a federal adjusted gross income of $65,000 or less, and other taxpayers with an AGI of $50,000 or less are fully exempt from taxation of Social Security benefits.

Here, the median property tax rate is 5th highest in the state, and the cost of living is 14.9% higher than the national average, reaching 114.9.

Speaking of relocating, when you decide on the next state, you’ll probably have to move out a couple of stuff, right? Well, get yourself some boxes now to make sure you have everything you need for the big day!

If you’re interested in reading similar information on retirement and relocating, here’s what we recommend reading: When Are The Best Days For Biggest Grocery Store Discounts This Year?