If you want to retire early - live in a state with a low cost of living.
This according to a study by a firm called Smart Asset. AJ Smith is Vice President for Financial Education at Smart Asset. She says the Northern Great Plains states all scored well on their most recent study about the best states to retire early, and North Dakota came in at number 5 on their list. She says North Dakota scored well in a few key areas of the study.
"The average effective tax rate of 15.1 percent, that includes income and sales taxes, that was the 8th lowest number in our study. Arts, entertainment and recreation establishments per 10,000 residents in North Dakota was the 9th highest in our study. The average annual housing costs were relatively low, the 10th lowest in our study. And average effective property tax rate was relatively low as well, ranking 24th lowest in this metric."
While North Dakota ranks near the top of the list for friendliest states to retire early, Smith says there are a couple things the state could do better.
"Inparticular in North Dakota, that includes doctor's offices per 10,000 residents. We looked at that because medical care in retirement is a particular concern for people, and doctor's offices ranked 3rd lowest in this metric. And then the average non-housing costs of living - so housing costs were relatively low, but those non-housing costs were a little bit higher, ranking 20th highest in this metric for our study."
Four states scored better than North Dakota on the study, including New Mexico, Montana, and Kentucky, with South Dakota ranking number 1. South Dakota's annual housing costs round out to an average of about $9,300 a year.