We're not sure we understand everything we know about Bankrate's new list of best retirement states. Not states of retirement, but states in which to retire.
Bankrate made some online buzz last week by listing these several states in order--best to worst--on a variety of subjects important to retirees. This didn't appear to be clickbait. It seems that somebody did some research, using weighted percentages and calculations from such places as The Tax Foundation and weather stuff from NOAA.
Arkansas placed 44th. Tied with Maine. Whereas the state of Maine ranked No. 1 overall in culture and No. 2 overall in crime stats, its weather was a drag on its rankings. The drag on Arkansas came in wellness, culture and crime.
The big advantage for Arkansas is weather, and that would seem right. You'd think another would be affordability. But this state was listed as the 19th best in that category--middle of the pack. In Bankrate's methodology section, it said it used the cost of living index from The Council for Community and Economic Research, and property tax information, to rank states in the affordability category.
It would certainly help this state's rankings in future years if more of us live healthier--lose weight, toss the cigarettes, get the vaccine. And crime rate per capita is going to be something that every retirement adviser will talk about. But we could do something a little more about that affordability issue, too.
Georgia was named the best state in which to retire. A big part of that was its affordability ranking (weighed at 40 percent of the total). Georgia ranked No. 3 in that stat.
In the same category, Tennessee ranked No. 1 as the most affordable. Oklahoma was No. 2. Missouri and Texas tied Georgia at No. 3. Mississippi was No. 6.
Do you notice a trend?
When it comes to affordability for retirees, or for anybody else, most of our neighboring states are in the Top 10. Even Louisiana is No. 11. And Arkansas was pegged, at least in this listing, at No. 19.
Maybe in the next year or so, as Arkansas' government continues to cut taxes, the numbers will catch up with the rankings and Arkansas' grade will improve. But there is another way as well, and it would make a big splash among retirees.
Yes, we'll say it again:
There is a reason why the cities of Austin (not the one in Arkansas) and Nashville (not the one in Arkansas) are booming with hundreds of thousands of people, flocking to states without income taxes, and generally improving their lots. Arkansas can compete with them, and make national headlines, by exempting newcomers from the income tax--for five years.
State budget-minders said last year that just more than 9,000 people might be affected by this proposal (so they estimate) and the first year it might cost the state $16.5 million. And by year five that number might grow to $82.5 million. But that's just calculating what newcomers wouldn't pay in income taxes. They'd still pay sales and property taxes.
And everyone in the state would stand to gain. A larger population would mean a rise in revenues from property taxes as home prices rise, more money for roads and infrastructure, more representation in Congress eventually, etc.
If there is another of these other lesser 50 states doing such a thing, we haven't heard of it. This could be national news. If we'd only do it.
Arkansas probably isn't competing against Montana and Pennsylvania for many retirees. But we imagine this state is very much competing against Tennessee, Oklahoma, Texas and Mississippi. Such a plan for a temporary exemption of the income tax might catch a few eyes. Like signs for homemade ice cream.