Retire in Massachusetts?
- Joe Boughan
- May 16
- 8 min read
While Massachusetts was recently ranked #1 state to raise a child? It was also ranked #46 best states to retire in by Moneywise.
How could this be?
While it ranks high in terms of areas that are most valuable for parents: safety, employment opportunities, school systems, healthcare quality, it also ranks real low on other factors that seem to be more important to retirees such as climate, taxes, affordability, and housing options.
As a financial advisor located in Massachusetts, I have helped many people retire in the state but have also worked with clients who have decided to move out of the northeast when they were done with work. So, today, we are breaking down the ins and outs of whether to retire in the Bay state.
If you are a successful professional looking for top financial advisors in the Cape Cod or Boston area, you have come to the right place.
I will say, retiring in Massachusetts offers a unique blend of historical charm, cultural richness, and diverse lifestyle opportunities. Whether you're drawn to the bustling streets of Boston, the serene coastal towns, or the picturesque countryside in Western parts of the state, Massachusetts does offer retirees many opportunities and an exceptional quality of life.
Why do people choose Massachusetts for Retirement?
Well it is more complex than just about choosing the state with the best clam chowder and lobster rolls.
Considerations of Cost of Living
Let's not mince words: Massachusetts boasts a cost-of-living index of 145.9, making it the second most expensive state in the U.S., trailing only behind Hawaii.
Housing here is a staggering 108% above the national average. To live comfortably, a objective measures single adult needs an annual income of at least $116,022 .
But it's not all doom and gloom. Massachusetts also leads the nation with an average annual salary of $80,330. For people planning retirement there may be significant opportunities for higher earning and savings potential in the later stages of their career, particularly for individuals in the biotechnology industry, finance, or technology industry, which are all vibrant economic sectors in the state of Massachusetts. For retirees, the state offers top-notch healthcare facilities and a rich cultural scene. It is not all high cost either, western MA towns like Pittsfield provide a more affordable alternative, in Pittsfield specifically, the cost of living is 4.1% below the national average
Healthcare and Senior Services
Lets be honest, the healthcare system here in the US is more complex than Boston street map.
Let's dive into the realities of healthcare and senior services in the Bay State
Massachusetts boasts some of the best healthcare systems in the United States, making it an attractive destination for retirees concerned about medical care. But it is a double-edged sword. On one hand, the state boasts some of the nation's top medical facilities. On the other, the costs can be staggering. Assisted living expenses range from $6,368 in Springfield upwards of $12,000 a month is not unusual in the Eastern parts of the state. Nursing home care is even pricier.
Programs and Services
Despite the costs, Massachusetts offers a range of programs aimed at supporting seniors:
Senior Care Options (SCO): A comprehensive health plan covering services typically paid for through Medicare and MassHealth, coordinated through a network of providers .Mass.gov+1Medicaid Planning Assistance+1
MassHealth for Seniors: Provides health and dental care for individuals aged 65 and older, including long-term care services at medical institutions or at home through Home- and Community-based Services Waivers (HCBS) .Mass.gov+1Medicaid Planning Assistance+1
Councils on Aging: Local agencies offering social and health services, advocacy, and information for elders .Massachusetts Secretary of State
Financial Strain
Even with these programs, many seniors face financial challenges. A study found that 17% of lower-income seniors in Massachusetts did not fill a prescription due to cost, and 11% cut pills in half or skipped doses . Additionally, 12% spent all or most of their personal savings on large medical bills.
So even if healthcare is important, the affordability of MA may rule it out as a viable option for many people who have little other reasons to stay in Massachusetts, and face difficulty in reaching the level of resources they need to retire in in a higher cost area like Massachusetts.
3. Tax Implications for Retirees
Ah, taxes—the ever-present specter haunting the dreams of retirees. In Massachusetts, this specter takes on a unique form, blending tradition with a touch of modern reform. Let's navigate this labyrinth together.
Income Tax: The Flat Reality
Massachusetts imposes a flat income tax rate of 5% on most income, including distributions from 401(k)s, IRAs, and non-public pensions. However, public pensions, such as those from the Massachusetts Teachers’ Retirement System, are exempt. For high earners, an additional 4% surtax applies to income exceeding $1 million, bringing the top rate to 9% .SmartAssetAxios+1NerdWallet: Finance smarter+1
Property Taxes: The Homeowner's Burden
With a median effective property tax rate of 1.15%, Massachusetts sits above the national average. Given the state's high property values, this can translate into substantial annual bills. However, various exemptions and deferrals are available:SmartAssetWikipedia
Clause 41C Exemption: Provides up to $1,000 in property tax relief for seniors meeting specific age, income, and residency requirements.Boston.gov+1AARP Property Tax Aide+1
Clause 17D Exemption: Offers $175 to $350 for seniors over 70 with limited assets.
Property Tax Deferral: Allows eligible seniors to defer payment of property taxes until the sale of the home or the owner's passing, with interest rates varying by municipality .Wikipedia
Estate Taxes: Planning for the Inevitable
Massachusetts imposes an estate tax on estates valued over $2 million, with rates ranging from 0.8% to 16%. This threshold is among the lowest in the nation, making estate planning a critical consideration for retirees .KiplingerSmartAsset
Navigating the tax landscape in Massachusetts requires diligence and strategic planning. While the state offers several programs to alleviate the burden on retirees, understanding and leveraging these options is key to preserving your hard-earned assets.
Lastly, The Best Retirement Communities
Retirement isn't just about escaping the 9-to-5 grind; it's about finding a place where you can sip your morning coffee without a care in the world. Research shows that the happiest and most satisfied retirees are able to maintain a strong social network, keep busy with hobbies, and routinely care for their health and fitness in whatever ways possible. Massachusetts, with its blend of historic charm and modern amenities, offers a plethora of options for those looking to settle down. Let's dive into some of the top spots and communities that make the Bay State a retiree's paradise.
Pittsfield: The Cultural Gem of the Berkshires
Nestled in the heart of the Berkshires, Pittsfield offers retirees a mix of affordability and culture. With a median home price of $283,000—28% below the national median—it's an attractive option for those looking to stretch their retirement dollars. The city boasts a high ratio of primary care physicians per capita, ensuring quality healthcare access. Its vibrant arts scene, especially during the summer, adds to its allure. Boston 25 News
Cape Cod: Coastal Serenity
For those dreaming of ocean breezes and sandy shores, Cape Cod and Martha’s Vineyard is a top contender. There is no shortage of cozy fishing towns in Massachusetts. And many of these areas are ranked high for safety which offers a unique tranquil setting for retirement. While it may be costly area to be in, many people choose these areas for the unique benefits and lifestyle, many of whom, known as the snowbirds flock to warmer areas for time in January or February. Cape Cod also has an extensive network of activities, facebook groups and communities that are available for retirees, which can make for a vibrant set of lifestyle options for those with initiative. Niche
3. Boston
While it is certainly not cheap, Let’s not count out the downtown scene. There are neighborhoods in Boston, such as beacon hill, which are known to have a vibrant community and support network of retirees with many activities and resources shared online and as apart of the formal retiree network organizations in the area.
There is also a variety of newer buildings in the downtown area. Many retiree’s in the Massachusetts area have accumulated significant home equity in the Massachusetts suburbs and may find it to be affordable and desirable to move to a full service condo in Seaport or Boston area where they can enjoy a new lifestyle smaller living arrangement and community experience of a luxurious condo building.
Financial Planning for Massachusetts Retirement
Successful retirement requires comprehensive financial strategy tailored to the state's unique economic landscape.
If you are located in Cape Cod and you are looking for top financial advisors, or you are in the Boston area looking for retirement guidance, feel free to reach out to us at Parkmount Financial for a complementary consultation of you financial strategy.
We are a fiduciary financial advisor located in Scituate, Massachusetts, and we offer services to people preparing for retirement in Massachusetts are remotely available across the country if you are expecting to move to Massachusetts for your retirement.
Conclusion
Retiring in Massachusetts offers a compelling mix of cultural richness, excellent healthcare, and diverse lifestyle options. By carefully considering factors like cost of living, healthcare, taxes, and community choices, you can create a fulfilling retirement experience in this vibrant state.
Ready to take the next step in your retirement journey? See the link in the description for the Free Financial Strategy Scorecard. If you are interested in getting personalized feedback on your financial planning about possible opportunities and assessment of the quality of your plan, fill out the scorecard, and we will get in touch.
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