Idaho retirees, and those looking toward that horizon, can be relatively confident they’ve chosen one of the best states in the country to afford their golden years.
A study released in March by Seniorly.com covering all 50 states and the District of Columbia ranks Idaho the fourth most affordable state in the nation for seniors looking to retire on a budget. All of the top four states are in the Mountain region, with Wyoming topping the list, followed by Utah and Montana. Massachusetts ranked last, with New Jersey, Connecticut and New York rounding out the bottom of the barrel. D.C came in at No. 42.
The study looked at several financial factors, including cost of living, tax friendliness for retirees, share of homeowners 65-plus who spend less than 30 percent of their income on housing, senior poverty rates, utility costs and other factors.
“The precarious economic climate, soaring inflation, and the fears about Social Security insolvency can be worrisome for many seniors from all economic levels,” the study said.
An October 2022 report from Kiplinger noted Idaho is the most tax-friendly state for retirees in the U.S. They cited the Gem State’s new lower flat-income tax rate starting in 2023 (5.8 percent on taxable income over $2,500, $5,000 for joint filers) and a $120 grocery tax credit per person over age 65. That combines favorably with no estate or inheritance taxes in Idaho, and no tax on Social Security benefits.
More than 77 percent of Idaho seniors aged 65 and older paid less than 30 percent of their income on housing, according to a Census Bureau report in 2021. That report also indicated Idaho’s senior poverty rate was below 10 percent, compared with the national average of 10.3 percent. Louisiana posted the worst, at 14.1 percent, while Wyoming came in at 6.7 percent. The National Council on Aging says more than 15 million-or about one in three-seniors aged 65-plus-are economically insecure, earning less than 200 percent of the Federal Poverty Level. In 2023, that 200 percent amounts to $49,280 per couple.
The Missouri Economic Research and Information Center ranked Idaho No. 28 in its 2022 cost of living score, thanks largely to high costs in transportation and housing. But the Gem State also had the lowest overall costs in the country for utilities. A 2021 report from the U.S. Energy Information Administration ranked Idaho No. 4 for electricity usage, with the lowest average price per kilowatt hour in the nation.
The Missouri report said Idaho scored well below the mean for health care. The state spent an average of $9,948 per beneficiary for Medicare, giving it a fourth-place ranking nationwide. Florida, at $13,652, came out the biggest spender, while Vermont came in at just $8,726.
Assisted-living costs in Idaho averaged $3,838, the lowest in the region behind Utah, at $3,500, and far below the national average of $4,500, according to seniorhousing.net.
Knowing when, as well as where, to retire is a key to a relatively comfortable retirement. Battered by ever-increasing prices on virtually everything, seniors are waiting longer than ever to retire. A 2022 Gallup poll indicated would-be retirees are waiting four years longer to retire than at any time in the past 30 years. The report said the average reported retirement age was 57 in 1991. And those still looking forward to it target their retirement age at 66, about six years later than in 1995, according to Gallup. The percentage of those retiring at 55-74 is going down.
“Changes to Social Security payouts enacted in the 1980s are coming into play for today’s workers of retirement age, and they provide incentives for people to stay employed longer to maximize their monthly benefits after they retire,” Gallup reported.
There are other concerns for seniors facing retirement. For example, the Social Security and Medicare Board of Trustees reported in 2022 that both programs face long-term financing shortfalls through the min-2030s, mainly due to the country’s rapidly aging population. it estimates scheduled payments from the Old-Age and Survivors Insurance Trust Fund should continue until 2034, when the fund’s reserves will become depleted, limiting payments to about 80 percent of scheduled benefits, If no action is taken.