retirement bench, best states for teachers

Best States for Teachers to Retire in – Part 1

 

Whether you are just starting your teaching career or retirement is just around the corner, planning out where to spend your retirement can be just as important as planning how you get there. At Appreciation Financial, our agents genuinely want to help you understand the big picture. 

Since there are so many things to consider, we will cover this topic in two parts. In part one, we will discuss teacher pensions, teacher salary, and state tax rates.

 

Best States for Teacher Pensions

It’s difficult to truly establish which states have the best pension plans. One simple metric is how well funded the state’s pension plans are. The percentage values below are a ratio of state funding to pension liabilities. States with >100% score have more money available than they will need to pay out.  With that metric in mind, here are the states with the best pension plans for teachers:

      1. Wisconsin (103%)
      2. South Dakota (100%)
      3. Tennessee (97%)
      4. New York (95%)
      5. Idaho (91%)

 

What this means is the way that the market stands at the time of this study, Wisconsin and South Dakota would be able to cover their retirees’ pension liabilities. That does not mean that states with less than 100% coverage won’t be able to pay teacher pensions. Those states are still likely to be able to cover the retirement benefits of teachers who retire there. However, these five states certainly have a bit more stability when it comes to providing pension benefits.

 

States with the Best Average Teacher Salary 

You may not think of salary as a benefit that impacts retirement, but if your salary is higher than the cost of living in the state, it can mean you have more funds to play with in retirement. So, here is a list of the states with the highest teacher salary, compared to cost of living: 

      1. Michigan—$61,908
      2. Pennsylvania—$67,535
      3. Ohio—$60,081
      4. Massachusetts—$67,001
      5. Iowa—$58,901

 

This of course only really has any bearing if you are serving the majority of your teaching years in one of these states. But chances are, if you are going into teaching, you already have an idea of where the pay is the best.

 

Best State Tax Rates

Tax rates are something you will encounter on a daily basis, whether it’s buying movie tickets, or that new flat-screen for the den. So here are a few states with the best average state and local sales tax rates:

      1. Wyoming (5.36%)
      2. Wisconsin (5.44%)
      3. Maine (5.50%)
      4. Virginia (5.65%)
      5. Michigan/Kentucky/Maryland/DC (6.00%)

 

Technically, Alaska and Hawaii are actually the lowest tax rates at 1.43% and 4.41% respectively. But for the purposes of this list, we are focusing on the continental United States. The fact that Hawaii and Alaska are two of the most expensive places to live in the country, puts them out of the running for best places to retire as a teacher. Also, Montana, Oregon, Delaware, and New Hampshire have no state or local sales tax—so that is something to consider.

 

 

Stick Around for Part Two

At Appreciation Financial, we’ve got a passion for serving those who serve others. Contact one of our financial agents and let us help you plan your retirement today!

 

Original image by mohamed Hassan from Pixabay. Modified 9/12/2020.