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August 08, 2023

The Des Moines Register, ran a featured article in their August 4th issue, "Iowa Ranked as Most Affordable State for Seniors Entering Retirement, Financial Company Says."  

Did you see it, and better yet, did you recognize anyone!?  Our very own Tim Hawkins was featured in the article providing his thoughts on how recent tax changes improve the affordability of retiring in Iowa.

Don't worry if you missed it...  We have you covered! 

Iowa ranked as most affordable state for seniors entering retirement, financial company says

Kevin Baskins

Des Moines Register

Never mind the weather. When you put more emphasis on factors like affordability and health care, Iowa ranks as the top state for retirement in 2023, according to data compiled by a leading consumer financial services company.

In Bankrate's latest ranking of best and worst states to retire in, Iowa came in third for affordability, 11th for quality and cost of health care and 12th for low crime rate. So despite ranking 38th for weather and 31st in well-being, an amalgamation of factors including health and access to food, it had the best aggregate score. Iowa beat out better-known retirement havens like Florida (No. 8) and Arizona (an abysmal 34th).

Bankrate also noted that retirees account for a relatively large 16.7% ― or a little more than 517,000 ― of Iowa's 3.1 million people. That ties Iowa at 16th in the nation for percentage of retirees with Michigan and Ohio, according to U.S. Census figures.

More:Affordable housing development for people 55+ coming near West Glen Town Center

Iowa ranks in the middle among the states in terms of taxes (23rd for property taxes and 22nd for state and local sales tax), but starting this year, Iowans over the age of 55 are exempt from paying state taxes on retirement income and Social Security benefits. Those 65 and over also now qualify for a partial exemption of their property assessment, qualifying them for still further savings.

The Bankrate report, however, noted some downsides to Iowa: colder weather and the frequency of tornados and a lack of racial and ethnic diversity.

Other states in the top five: Delaware, West Virginia, Missouri and Mississippi.

Researcher says finding surprised her

Alex Gailey, who researched and wrote the article for Bankrate, said she was initially surprised that Iowa came out on top after applying all of the metrics used to assess the states.

“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,” said Gailey.

She said she emphasized affordability because studies show that most Americans fall far short of the $1 million goal of savings for retirement and need to find ways to make their dollars go as far as possible in an inflation-riven economy.

More:How much money do you need to retire? Most Americans calculate $1.8 million, survey says.

And while dreams of palm trees and ocean waves are nice, eliminating state taxes on income may be the key in many retirees' decision to stay in Iowa after retirement.

“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,” said Tim Hawkins, president of WealthCharter Retirement Planning in Ankeny.

In his conversations with clients planning retirement, Hawkins said, many were considering retirement to “more tax-friendly states.” Florida, for instance, has no state income tax.

“But I also have many clients who would prefer to spend more time here after retiring. Improving the affordability through tax changes will help,” Hawkins said.

Major Des Moines developer looking to expand senior housing offerings

Demand for affordable senior housing will continue to grow in Iowa, predicted 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.

Citing a national statistic from AARP, “There are 10,000 people turning 65 every day,” said Flint.

She said the Bankrate ranking accurately identified taxes, affordability and health care as important considerations for retirees. But she said there is one more factor likely to keep people in Iowa after retirement: family.

“From our market research, we know that retirees want to stay close to their kids and their grandchildren. As we see increased interest in young families, first-time homebuyers and even larger families custom building homes, we also see older generations wanting that immediate access to their family,” she said.

She said Hubbell has been incorporating the expected market growth in older customers into its strategic planning.

“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,” Flint said in an email.

Iowa sees mixed results in other rankings

The survey isn't the first one to rank Iowa highly as a place for retirement. Motley Fool, a Virginia-based financial and investing advice company, ranked Iowa sixth in June based on criteria gathered from a survey of 1,500 Americans aged 55 and older as to what factors were the most important to them in deciding where to retire. Those factors: quality of life, housing costs, health care quality, crime rate and health care costs.

Similar to the Bankrate rating, Iowa scored high marks for having low housing costs, relatively affordable quality health care and a low crime rate.

However, what qualifies as a retirement haven, in the end, depends on what you value. A January ranking from personal finance website Wallethub that placed more emphasis on things like shoreline mileage, golf courses per capita, "neighborhood friendliness" and, of course, weather, ranked Iowa 26th among states for retirement.