Is Texas a Good State to Retire In? Pros and Cons

Reviewed by: Chad Seegers, CRPC®
June 18, 2024

Retiring in Texas has become an increasingly popular trend, drawing attention for its unique blend of affordability, pleasant climate, and vibrant cultural scene. Texas offers compelling financial and practical advantages for retirees, including no state income tax and access to robust health care options.

The Benefits of Retiring in Texas

No State Income Tax in Texas

One of the most significant financial benefits of retiring in Texas is the absence of a state income tax. This means that retirees can keep more of their retirement income, whether it comes from pensions, Social Security, or investment withdrawals. Without the burden of state income tax, retirees enjoy a higher disposable income, allowing for greater financial flexibility and the ability to stretch their retirement savings further. This extra income can be used for travel, hobbies, healthcare, and other activities that enhance the quality of life during retirement.

Affordable Cost of Living in Texas

When considering Texas as a retirement destination, it’s helpful to compare key financial aspects such as housing, and general living expenses to other popular retirement states like Florida, Arizona, and California.

Housing in Texas:

The median home price in Texas is approximately $348,000¹, which is lower than the national average and significantly more affordable than in California, where the median home price is around $860,300².

Compared to Florida and Arizona, where median home prices are around $402,000³ and $435,000³ respectively, Texas remains a more affordable option for housing.

General Living Expenses in Texas:

The cost of living in Texas is approximately 7% lower than the national average⁴.
Utilities, groceries, and transportation costs are all below national averages, making daily living expenses more manageable for retirees.
In contrast, California’s cost of living is about 50% higher than the national average, while Florida and Arizona are roughly on par with the national average⁴.

Overall, Texas offers a cost-effective environment for retirees, with lower housing and living expenses compared to other popular retirement destinations. These financial advantages contribute significantly to the state’s growing appeal among retirees.

Cost of Living and City Comparison Overview

Texas Cities at a Glance:

Austin – Cost of Living Index: 108. Offers excellent healthcare options such as St. David’s and Ascension Seton hospitals. Known for its vibrant music scene, universities, and cultural events, with warm summers and mild winters.
Houston – Cost of Living Index: 99. Home to world-class medical care at the Texas Medical Center. Retirees enjoy diverse dining, theater, and museum options, though the humid, hot summers can be intense.
San Antonio – Cost of Living Index: 91. Features strong local healthcare facilities and a historic, walkable downtown. Offers hot summers and mild winters, ideal for those seeking an active lifestyle.
Dallas – Cost of Living Index: 102. Provides high-quality hospitals, extensive shopping, arts, and dining experiences, with warm summers and moderate winters.
Fredericksburg – Cost of Living Index: 89. Known for its small-town charm, wineries, and scenic Hill Country surroundings. While healthcare facilities are limited, the mild, dry climate makes it comfortable year-round.

Whether you prefer urban or rural living, Texas offers options to suit a variety of lifestyles.

Climate, Lifestyle, and Daily Living Considerations

Climate and Lifestyle in Texas

From coastal beaches to rolling hill country, and from piney woods to arid deserts, Texas offers an array of scenic environments to explore and enjoy. However, retirees should evaluate how these climates affect daily life. For instance, while Gulf Coast communities offer year-round warmth, the humidity can influence health and energy costs. Central Texas provides a balance of mild winters and warm summers—ideal for outdoor enthusiasts.

East Texas: Lush forests and mild weather for gardening and outdoor living.
West Texas: Arid climate with fewer allergens—preferred by retirees sensitive to humidity.
Hill Country: Moderate year-round weather and strong senior community networks.

Safety and Crime Considerations

Crime rates vary widely between urban and rural areas. Cities like Austin and Dallas may have higher property crime, while smaller towns like Fredericksburg report lower overall crime.
Retirees should research local safety statistics and consider gated communities, neighborhood watch programs, or retirement communities with enhanced security.

Rich Cultural Experiences in Texas

Texas’s cultural tapestry, historical richness, and culinary diversity make it an ideal setting for retirees seeking enrichment and enjoyment. Events like the South by Southwest (SXSW) festival in Austin, the State Fair of Texas in Dallas, and the Houston Livestock Show and Rodeo provide unique experiences blending local culture with entertainment. Moreover, Texas’s historical landmarks offer a captivating journey into the state’s past, with sites like the Alamo in San Antonio and the San Jacinto Monument near Houston serving as poignant reminders of Texas’s fight for independence.

In addition to its cultural and historical offerings, Texas’s culinary scene stands out as a highlight, showcasing a distinctive blend of flavors and culinary traditions. Renowned for its BBQ joints in cities like Austin, Lockhart, and Houston, Texas offers retirees a savory experience in smoked meats and traditional barbecue fare. Tex-Mex cuisine, with its fusion of Mexican and American flavors, tantalizes the taste buds with dishes like fajitas, enchiladas, and breakfast tacos, found in abundance across the state. Together, these cultural events, historical sites, and culinary delights create a vibrant and enriching environment for retirees, offering a wealth of experiences to enhance their retirement life in Texas.

Secure Your Retirement with Confidence

Discover personalized retirement strategies tailored to your goals. Schedule a free consultation with our advisors to start building a plan that helps ensure peace of mind and financial security.

Request a Consultation

Drawbacks of Retiring in Texas

Extreme Weather Conditions in Texas

While Texas offers many retirement benefits, it is also important to consider its susceptibility to extreme weather. The state experiences intense summer heat, with temperatures often exceeding 100 degrees Fahrenheit, particularly in regions like Central and South Texas. This can pose health risks, especially for older adults, and may necessitate higher spending on air conditioning. Additionally, coastal areas of Texas are vulnerable to hurricanes, which can cause significant property damage and necessitate costly preparations and repairs. These weather-related challenges are important factors to weigh when considering Texas as a retirement destination.

Healthcare Accessibility in Texas

Healthcare services in Texas present a mixed picture, particularly affecting retirees in rural areas. While urban centers like Houston, Dallas, and Austin boast world-class medical facilities and a wide range of specialists, rural regions often face shortages of healthcare providers and facilities. This disparity can result in longer travel times for medical appointments, fewer healthcare options, and potentially delayed treatments for rural retirees. Additionally, access to specialized care and advanced medical treatments may be limited in these areas.

Texas' Urban vs Rural Retirement Options

Retiring in Texas offers a wide range of lifestyles depending on whether you choose a major city or a rural community.

Urban living in cities like Austin, Houston, and Dallas offers access to high-quality healthcare, cultural amenities, and entertainment, though at a higher cost of living and with more traffic and heat.
Rural areas, including Fredericksburg and other Hill Country towns, provide lower housing costs, a slower pace of life, and tight-knit communities, though retirees may face limited access to specialized healthcare and services.

For a side-by-side look at costs, amenities, and climate, refer to the Cost of Living and City Comparison Overview above.

Final Considerations for Retiring in the Lone Star State

Retiring in Texas offers a range of advantages and considerations for potential retirees to weigh carefully. On the positive side, Texas boasts no state income tax, a lower cost of living compared to many other states, and a diverse range of cultural and recreational opportunities. However, retirees should also consider challenges such as extreme weather, particularly hurricanes and intense summer heat, as well as disparities in healthcare access between urban and rural areas. Ultimately, the decision to retire in Texas or find the best place to retire in Texas should be based on personal preferences and priorities. We encourage potential retirees to visit and explore different parts of the state, considering factors such as climate, cost of living, healthcare services, and social amenities before making a decision. By weighing these insights against their individual needs and desires, retirees can make an informed choice that aligns with their retirement goals and aspirations.

Leverage Expert Financial Services in Houston

As you consider your retirement options in Texas, it’s crucial to have a robust financial plan in place to ensure your retirement savings are maximized and aligned with your lifestyle goals. Insight Wealth Strategies offers comprehensive financial services in the Houston area, specializing in retirement planning, financial advisory and investment management. Our experienced advisors are dedicated to helping you navigate the complexities of retirement finances, providing personalized strategies to help secure your financial future. Whether you are exploring urban retirement in bustling Houston or seeking a quieter, suburban lifestyle, our team is here to support you every step of the way. We invite you to request a consultation with our Houston-based financial advisors to discuss your retirement aspirations and how we can help you achieve them. Together, we can create a tailored plan that aligns with your vision for a fulfilling and financially secure retirement in Texas.

Reviewed by,

Chad Seegers, CRPC®

Chad began his career with Sagemark Consulting in 2005 and then became a Select member of Sagemark’s Private Wealth Services which operated as a national resource for financial planners focusing on Advanced Strategies in the High Net Worth marketplace. Chad then began his partnership with Insight Wealth Strategies in 2013 focused on retirement planning primarily with Oil and Gas employees and executives. His primary areas of expertise are retirement, estate, and investment strategies as he serves as Investment Strategist for the financial planning team.

Sources:

Insight Wealth Strategies, LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Insight Wealth Strategies, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Insight Wealth Strategies, LLC unless a client service agreement is in place.

Insight Wealth Strategies, LLC (IWS) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.