Benefits of Retiring In Texas (Pros & Cons) (2023)

If you are considering Texas as a place to retire, knowing the pros and cons of living in the Lone Star State will help you make an educated decision.

Retirement is an opportunity to start a new chapter of our lives. As Americans are living longer (and healthier!), where we choose to live for our retirement years has become as important as when we choose to start them. With so many factors weighing in on this big life decision, it’s important to have as much information as possible before you make the move.

Here are some of the top pros and cons to retiring in Texas:

Pros:

  • no state income tax
  • reasonable cost of living
  • lots of educational and work opportunities
  • mild winter climate
  • excellent health care

Cons

  • high property and sales tax
  • severe weather patterns
  • higher crime rate
  • hot summer climate
  • urban sprawl

Depending on your values, needs, and lifestyle, certain items on the above lists may weigh more heavily for you than others will. Know, too, that the closer you get to retirement, the more some may shift in priority. For example, if hot summer days are something that makes you uncomfortable, then Texas may not be right for you. But, if opportunities for continued education or work are going to matter a lot to you in your golden years, then Texas is definitely going to rank high on your list of places to live.

For a state as big as Texas, its pros and cons are too. Luckily, my love for research is going to be your timesaver. Read on to find out more about this great state and whether or not it will check enough boxes for you to consider making it your home for the next chapter of your life.

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Pros of Retiring to Texas

Texas is a popular state, with over 1,000 people moving there every day. And they all have good reason. The state is culturally varied, rich with history, and full of fun things that make it an attractive spot to call home.

1. No State Income Tax

If this isn’t a perk that deserves to be at the top of the list, I don’t know what is. As a retiree, many of us will still be working part-time jobs, doing consulting work from previous careers, or may have rental income coming in. Having no income tax allows all of those dollars to go farther. It also means that your social security benefits and any other type of retirement income are considered tax-free. Something to definitely consider when thinking about your purchasing power in your later years.

2. Reasonable Cost of Living

Depending on where you settle, Texas may not be as cheap as some places to retire. But, in a state that is as large as some countries, you have lots of options. Some of the bigger cities like Houston and Dallas are going to be more expensive. Still, you’ll find they are more dollar-friendly than other cities comparable in size, such as San Diego or Miami.

Smaller Texas cities, such as Fredericksburg or Brady will have the combination of small-town Texas charm with a cost of living that will stretch your dollars across those wide-open plains. These towns will give you room to breathe, budget-wise. Either way, Texas is going to be more cost-friendly than many favorite retirement spots in other parts of the country.

3. Lots of Educational and Work Opportunities

As I mentioned before, many of us want to continue to work, learn or stay active in our community during our retirement. In fact, by the time we hit those golden years, we usually find ourselves with more time on our hands to pursue the interests we hadn’t been able to earlier in life.

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Texas has a great job market. According to Joblist, the Texas economy is doing fine, especially compared to other places in the U.S. Texas also boasts an amazing higher education system, meaning there are opportunities all over the state for those who want to consider going back to school, or just taking a class or two. A state the size of Texas is never going to leave you lacking for things to do.

4. Mild Winter Climate

No retiree wants to spend their latter years shoveling snow and digging out their car. Well, no retiree I know! If a mild winter climate is what you crave, Texas is a good place to land.

Though Texas has a variety of weather patterns, the average temperature during January is 64 °F. Outdoor activities are plentiful and can continue most of the year. Snow and ice are rare in this state, even in areas farther north. If a mild climate is top on your list, Texas is definitely going to check that box.

5. Excellent Health Care System

We all know that Texas goes big – and healthcare is not an exception. With 14 different medical schools, it is a state that values training our future healthcare providers, conducting research, and caring for its citizens.

There are also more than 600 hundred hospitals statewide and many of them have national rankings in areas such as cancer research, diabetes care, and geriatrics. You won’t be hurting for help in this state when your physical needs require care.

Cons of Retiring to Texas

As with anything, there are also some downsides to retiring to the Lone Star State. Though it has a lot to offer, below are some factors that may make this massive state less appealing for some people.

1. High Property and Sales Tax

Having no income tax makes Texas an attractive option for retirement. But, having the 7th highest property tax rate in the United States may prove to be cause for concern. Since most Americans value owning their own home, a property tax rate of 1.8% is steep. This would mean that owning a home in Texas that has a value of $300,000 leaves you paying a tax bill of $5,400 a year. Ouch.

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Sales taxes are steep as well. At 6.25%, the Great State of Texas has the 14th highest sales tax in the nation. Now that’s a double ouch.

2. Severe Weather Patterns

Yes, Texas has those mild winters. But it also has some severe weather because of it. A large part of Texas falls within Tornado Alley, and it is not uncommon for the state to be affected by over 100 tornadoes a year (in some areas more than others.)

Because of the warm, humid air during the winter and spring, followed by the intense heat of summer, Texas is set for severe weather like tornadoes, hailstorms, droughts, and wildfires. It’s a big, beautiful state, but if you choose to live here, Mother Nature will keep you on your toes.

3. Higher Crime Rate

As I mentioned before, Texas has a lot of options when thinking about where to live. Urban living, rural lifestyle – this state has it all. But, if living in a large metropolitan area is your thing, know that the per capita crime rate in some of Texas’ biggest cities is higher than their counterparts in other states.

Lubbock and Corpus Christi, for example, have much higher crime rates than many cities nationwide similar in size. Overall, Texas has the 15th worst crime rate in the U.S., which could be a disconcerting fact for those who rank safety high on their list of wants in retirement.

4. Hot Summer Climates

Earlier, I mentioned those nice, mild winters as being a perk to life in Texas. But eventually, summer will arrive, and boy does it bring the heat!

The average daily temperature hovers around 90 °F during the summer months, but it’s not uncommon for the thermometer to cruise past 100 °F during the hottest days, especially near the coast, where the air is also more muggy and thick. Settling farther north will help you avoid some of the hottest, stickiest days, but it’s important to know that all of Texas is known for its summer heatwaves and high humidity, especially compared to other areas of the United States.

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5. Urban Sprawl

You move to a city for certain conveniences, right? But what happens when driving the three miles to the grocery store ends up taking you twenty minutes? Or buying one gallon of milk means standing in a line ten deep? Not something you signed up for.

Texas has some of the most vibrant cities in the nation. From excellent food options to first-class entertainment and sporting events, you’ll never be at a loss for something to do. But, with all those attractions come people. And with all those people, come more construction, more crowds, and more traffic.

According to Smart Cities Dive, urban sprawl has never been worse in Texas than it is now. Land that used to be for farming is now being used for new housing developments, shopping malls, and entertainment venues. Though this can be good news for those retirees looking for lots to do, it can also be annoying to spend hours in traffic when life is short and there’s lots of living to be done outside your car or on the other side of the long grocery line.

What Should I Prioritize in My Retirement Years?

Probably one of the most exciting, yet daunting parts of planning for retirement is figuring out what things are going to be important to you, and what things you are fine leaving off your list. Everyone has different wants and needs – whereas I may want a variety of concert venues at my fingertips, you may yearn for wide-open spaces with not a soul in sight.

Here is a list of things you may want to think about when starting your retirement planning:

When?

This may be the first question we ask ourselves when starting to think about the next stage of our lives. When is retirement right for me?

This question isn’t just referring to your financial situation. When we can retire does have a lot to do with our finances, but other factors are often at play as well. Is your job a physical one that means you won’t be able to do it for much longer? Do you have ailing parents that need you sooner than later? Do you worry your mental health will be affected once you don’t have a job to go to every day? Along with your financial picture, these are other questions worth asking yourself when you start thinking about your retirement timeline.

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Where?

I covered many of the pros and cons of living in Texas, but do you have other places on your retirement list that you are considering as well? What makes each of those spots attractive? Is it a location near family or friends? Is it a desire to live on the water or in the mountains? Is the idea of not being near excellent health care or an international airport concerning to you? All of these questions need to be explored when narrowing down your list of where you are going to be the healthiest and the happiest in your golden years.

With Whom?

Finally, we can all dream big and get excited about the opportunities retirement life is going to bring us, but if we are partnered, those dreams may have to shift a bit, depending on what our other half desires as well. Chances are, you have had this discussion and both have many of the same wants. But there may be some areas you don’t align one hundred percent. If your partner has health issues, this may mean you can’t have that homestead in the middle of nowhere. Maybe your other half is looking forward to finally raising those chickens they’ve always wanted, but you can’t wait to live in a big city where you can walk to restaurants, breweries, and sporting events. Talking about the things you both need and the ones you really want will help make this transition to your well-deserved retirement more rewarding for both of you.

FAQs

Is it a good idea to retire in Texas? ›

Texas is a great state for retirees! If you love the idea of low taxes and a low cost of living, then you can make your fixed income last longer in Texas. Retirees can also enjoy mild winters and exciting cultural opportunities in thriving Texas cities like Houston and Dallas.

What are the advantages of retiring in Texas? ›

The low tax rates in Texas are another reason to retire in the Lone Star State. There is no state income tax in Texas, which means Social Security retirement benefits and all other types of retirement income are tax-free. That can mean thousands of dollars a year in tax savings as compared with other states.

What is the downside of living in Texas? ›

Texas is vulnerable to severe weather conditions like tornadoes, flooding, hurricanes, wildfires, and thunderstorms. Because the state is so big, these conditions can vary depending on which area you reside in. So it may be a risky state to call home if you'd rather not experience a diverse range of severe weather.

What part of Texas is good for retirees? ›

The Best Places to Retire in Texas
RankCity% of Population 60+
#1Austin16%
#2Houston16%
#3Dallas16%
#4San Antonio18%
3 more rows
22 Aug 2022

What city is the best place to retire in Texas? ›

Best known for its Riverwalk, San Antonio is among the best towns to retire in Texas for its history. In fact, it's the oldest city in the state. You'll get a low cost of living and warm climate, along with easy access to medical care.

What taxes does a retiree pay in Texas? ›

Well, yes, it's true that there are no income taxes in Texas...which means no taxes on Social Security benefits, pensions, 401(k)s, IRAs, or any other type of retirement income.

Do retirees pay property taxes in Texas? ›

Property tax deferral for seniors

You may be aware that seniors can apply for an exemption from Texas property taxes. This is true: when you reach the age of 65, you can file an affidavit with the chief appraiser in your district to exempt yourself from the collection of taxes on your property.

How much money do you need to retire comfortably in Texas? ›

In Texas, average retirement spending stands at an estimated $1,029,393 – the 20th highest among states. Goods and services in the state are 0.5% less expensive than they are, on average, nationwide, and life expectancy at age 65 is 18.9 years to 83.9, compared to 19.5 years to 84.5 across the country as a whole.

What is the rule of 80 for retirement in Texas? ›

At least age 62, meet the Rule of 80 (combined age and years of service credit equal at least 80), and have at least five years of service credit.

Are Texas property taxes high? ›

How Much Are Property Taxes in Texas? According to recent research, the property tax rate in Texas is one of the highest in the USA, with the average homeowner paying around one-third more than the national average. Why is property tax in Texas higher? Find out more according to these three factors.

Where do the happiest retirees live? ›

Top 10 happiest countries to retire in!
CountryHappiness Index 2020Happy retirement index
Spain6.5026.79
Malta6.1576.74
Colombia5.7096.70
Thailand5.8856.68
6 more rows
5 Nov 2021

What is the best small town to retire in Texas? ›

Best small towns for retirement in Texas
  • Dripping Springs. ...
  • Fredericksburg. ...
  • Granbury. ...
  • Horseshoe Bay. ...
  • Kemah. ...
  • Mineola. ...
  • Port Aransas. ...
  • West Lake Hills. West Lake Hill is a suburban area about six miles from the state capital in Austin.
20 Jul 2022

Why are retirees moving to Texas? ›

Texas is one of the only seven states in America that doesn't require residents to pay a personal state income tax. This is very attractive to people who retire and have another source of income in retirement in addition to their Social Security benefits.

What is the happiest city in Texas? ›

A new study from personal finance website WalletHub ranks Plano as the happiest city in Texas and the 22nd happiest city in the U.S. To come up with the ranking, WalletHub looked at more than key indicators of happiness for 182 of the largest U.S. cities.

What is the prettiest city to live in Texas? ›

10 Most Beautiful Cities in Texas
  • Fredericksburg. tpwd.texas.gov. ...
  • Jefferson. Credit: The Lone Star Carriage Company Of Jefferson Texas. ...
  • Wimberley. Credit: nan palmero via Flickr. ...
  • Canyon. Credit: tpwd.texas.gov. ...
  • Port Isabel. Credit: tpwd.texas.gov. ...
  • Rockport. Credit: rockport-fulton.org. ...
  • Salado. ...
  • Marble Falls.

Does Texas tax your Social Security? ›

Because the Lone Star State doesn't have a personal income tax, it will keep its hands off your 401(k), IRA and pension income, too. Social Security Benefits: Of course, because there's no income tax, there's no tax on your Social Security benefits in Texas, either.

At what age do you stop paying property taxes in Texas? ›

For many senior homeowners, rising property taxes can be a threat to their financial stability, even though their mortgages may be paid off. The Texas Tax Code, Section 33.06, allows taxpayers 65 years of age or older to defer their property taxes until their estates are settled after death.

What taxes don't you pay when you retire? ›

Once retired and living on unearned income, you will no longer be paying Social Security and Medicare payroll taxes. You will still be subject to income taxes at the federal state levels. That assumes you don't live in a state without an income tax.

Does Texas tax your 401k when you retire? ›

Basically, any amount you withdraw from your 401(k) account has taxes withheld at 20%, and if you're under age 59½, you'll be taxed an additional 10% when you file your return. Any amount you withdraw from your 457 account has taxes withheld at 20%.

Are there any tax breaks for seniors in Texas? ›

For persons age 65 or older or disabled, Tax Code Section 11.13(c) requires school districts to provide an additional $10,000 residence homestead exemption. Tax Code Section 11.13(d) allows any taxing unit to adopt a local option residence homestead exemption. This local option exemption cannot be less than $3,000.

At what age do seniors stop paying property taxes? ›

As a senior citizen, you probably will end up paying property taxes for as long as you are a homeowner. However, depending on the state you live in and often once you hit your 60s (usually around the ages of 61 to 65), you may be eligible for a property tax exemption.

How do I become exempt from property taxes in Texas? ›

What Property Tax Exemptions Are Available in Texas?
  1. General Residence Homestead.
  2. Age 65 or Older or Disabled.
  3. Manufactured and Cooperative Housing.
  4. Uninhabitable or Unstable Residence.
  5. Temporary Exemption for Disaster Damage.
18 Feb 2022

Where can I retire on $2000 a month in the United states? ›

You're planning to retire in the not-so-distant future, which means you'll be living on a fixed income.
...
The Best Cities To Retire on $2,000 a Month
  • North Royalton, Ohio. ...
  • San Angelo, Texas. ...
  • Longview, Texas. ...
  • Florissant, Missouri. ...
  • Des Moines, Iowa. ...
  • Parma Heights, Ohio. ...
  • Baytown, Texas.

What is a good monthly retirement income? ›

A good retirement income is about 80% of your pre-retirement income before leaving the workforce. For example, if your pre-retirement income is $5,000 you should aim to have a $4,000 retirement income.

Where can I retire on $3000 a month? ›

See the best cities to retire on $3,000 a month.
...
  • Boise, Idaho. ...
  • Virginia Beach, Virginia. ...
  • Reno, Nevada. ...
  • Las Vegas, Nevada. ...
  • Mesa, Arizona. ...
  • Phoenix, Arizona. ...
  • Jacksonville, Florida. ...
  • Forth Worth, Texas.

What is the 4 rule for retirees? ›

One frequently used rule of thumb for retirement spending is known as the 4% rule. It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement.

What is the age 75 rule? ›

Rule of 75

This rule states that you must be a minimum of 55 years of age and have a minimum of 10 years of continuous full-time service; if you meet both minimums, then the total of your age and years of service must equal at least 75.

What is the 55 rule? ›

The rule of 55 is an IRS provision that allows workers who leave their job for any reason to start taking penalty-free distributions from their current employer's retirement plan once they've reached age 55.

What part of Texas is everyone moving to? ›

The Dallas-Fort Worth metro area is the big winner, according to a report from moveBuddha, which measured the number of people looking to move into each city versus moving out in the first half of 2022.

What town is the safest to live in Texas? ›

1. Hutto. Just north of Austin, Hutto ranks as the top safest city in Texas. It's also the Hippo Capital of Texas!

Which Texas city is safest? ›

A September study by Smart Asset also used FBI data for its list of America's 10 Safest Cities (though criteria for this were wider), determining at least two of SmartWise's top 50 rank among the safest in the country — those are McKinney (No. 2) and Frisco (No. 1).

What town in Texas has the best climate? ›

According to historical and meteorological data, Houston has the best weather of the six major cities: Houston. San Antonio. Dallas.

What is the most affordable place to live in Texas? ›

Brownsville-Harlingen was the cheapest place to live in Texas, according to the index. The cost of living was 37% lower in Brownsville-Harlingen compared to Dallas-Fort Worth-Arlington. The southernmost metropolitan area in Texas, Brownsville-Harlingen had 421,017 people as of 2020.

Is it better to retire in Texas or Florida? ›

The cost of living in Texas is widely considered as being very low compared to other states. Many even argue that it is significantly less than what it costs to live in Florida. According to research from 2020, to retire comfortably in Texas, you'll need $58,000/year.

Which city in Texas has the highest property taxes? ›

Rankings
RankCityEffective Property Tax Rate
1.Milwaukee, Wisconsin2.17%
2.El Paso, Texas2.13%
3.Fort Worth, Texas1.86%
4.San Antonio, Texas1.85%
7 more rows

What taxes do homeowners pay in Texas? ›

Across Texas, the effective annual property tax rate stands at 1.60%, the sixth highest among states. For context, homeowners in the U.S. pay an average of 1.03% of their housing value in property taxes a year.

What county in Texas has the cheapest property taxes? ›

King County collects the highest property tax in Texas, levying an average of $5,066.00 (1.56% of median home value) yearly in property taxes, while Terrell County has the lowest property tax in the state, collecting an average tax of $285.00 (0.67% of median home value) per year.

What is the number 1 state for retirees? ›

According to Bankrate's study, Florida is the best state for retirement in 2022, followed by Georgia, Michigan, Ohio and Missouri. Alaska, on the other hand, held last place in our ranking. The state was dragged down by back-of-the-pack scores in affordability and weather.

How do I get the $16728 Social Security bonus? ›

How to get the $16,728 bonus in retirement?
  1. Work as long as you can: the later you retire the higher your benefit will be. Remember that 70 is the maximum age. ...
  2. Years worked: If you work less than 35 years you will have a reduction in your SSA check. ...
  3. High salary: with a high salary you will have a high retirement.
14 Sept 2022

What is the number 1 city to retire in the US? ›

These are the 10 best places to retire in the U.S.—and Pennsylvania dominates the list. Lancaster, Pa., was the top-ranked place to retire, according to a new ranking.

Is Retiring in Texas a good idea? ›

Texas is a great state for retirees! If you love the idea of low taxes and a low cost of living, then you can make your fixed income last longer in Texas. Retirees can also enjoy mild winters and exciting cultural opportunities in thriving Texas cities like Houston and Dallas.

Is Texas friendly to retirees? ›

Texas is tax-friendly toward retirees. Social Security income is not taxed. Withdrawals from retirement accounts are not taxed. Wages are taxed at normal rates, and your marginal state tax rate is 5.90%.

What are the disadvantages of moving to Texas? ›

Texas ranks below average in the quality of life opportunities. Although there are several job opportunities available throughout the state of Texas, the overall quality of life ranking places it at 46th out of the 50 states. One of the most significant disadvantages of living here is your access to healthcare.

How much do you need to live comfortably in Texas? ›

In Texas, the survey looked at Dallas and Houston. Here's what the survey found: In Dallas, residents considered what it takes to be "wealthy" and "financially comfortable" in 2022. The average net worth to be "wealthy" is $2.6 million, while it takes about $840,000 to live comfortably.

What state is best financially to retire in? ›

For those of us who want to retire in the U.S., there are nine states that have no state income taxes: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

What is the best state to retire in 2022? ›

According to Bankrate's study, Florida is the best state for retirement in 2022, followed by Georgia, Michigan, Ohio and Missouri. Alaska, on the other hand, held last place in our ranking. The state was dragged down by back-of-the-pack scores in affordability and weather.

Where is the most affordable place to live in Texas? ›

Brownsville-Harlingen was the cheapest place to live in Texas, according to the index. The cost of living was 37% lower in Brownsville-Harlingen compared to Dallas-Fort Worth-Arlington. The southernmost metropolitan area in Texas, Brownsville-Harlingen had 421,017 people as of 2020.

Is Texas a senior friendly state? ›

Texas was one of the lowest-ranked states in taxpayer rating, as Texas residents were found to pay one of the highest effective total state and local tax rates on the median U.S. household, an 18.37% increase over the U.S. average. Texas also ranked third-lowest in percentage of population aged 65 and older.

Why are Texas houses so cheap? ›

Texas houses are affordable because of the state's large availability of vacant land, low tax rates, relaxed building restrictions, and available building supplies. Texas also has one of the strongest economies in the world, and the cost of living is quite cheap, making housing prices even more accessible.

What is a good monthly salary in Texas? ›

As of Oct 22, the average annual salary in Texas is $52,380. Just in case you need a simple salary calculator, that works out to be approximately $25.18 an hour. This is equivalent of $1,007 a week or $4,365 a month. Most salaries in Texas range between $37,039 (25th percentile) to $66,331 (75th percentile) annually.

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