Is Minnesota a Good Place to Retire?
Minnesota is regularly ranked as one of the best places to retire. Known as “The Land of 10,000 Lakes”, Minnesota is a prime paradise for water activities like swimming, boating, and fishing.
In this article, we’ll describe the pros and cons of retiring in Minnesota, as well as provide you with some recommendations for cities that you may wish to call home.
Key Takeaways
Minnesota provides a good mix of outdoor activities and cultural experiences.
Taxes in Minnesota can be high, especially property taxes.
Minnesota is home to several highly ranked healthcare facilities, including the Mayo Clinic.
What to expect from retiring in Minnesota
Minnesota experiences all four seasons: summers can be hot and humid, while winters can be cold and snowy. If you’re someone who enjoys the outdoors, there are lots of activities to keep you busy throughout all four seasons.
In the summer, you can enjoy swimming, boating, and fishing in one of Minnesota’s numerous rivers or lakes. In the cooler months of the year, you might visit one of Minnesota’s 18 ski resorts or try your hand at ice fishing, snowmobiling, or snowshoeing.
While there are plenty of outdoor activities to try in Minnesota, there’s also a good blend of culture. Minnesota’s twin cities (Minneapolis and St. Paul) are home to theaters and a strong music scene (Minneapolis was the birthplace of Prince, after all!).
There’s also a diverse food scene, with restaurants and food trucks offering Mexican, Somali, Indigenous, and Vietnamese foods.
Retirees also often enjoy the “Minnesota Nice” culture, a polite and friendly attitude, and the relaxed lifestyle that Minnesota can provide.
The pros and cons of retiring in Minnesota
Now that you have an image of what retiring in Minnesota might look like, let’s look at some more specific pros and cons about choosing Minnesota for your retirement.
Pros:
Minnesota regularly boasts a high quality of life, offering an appealing blend of the outdoors and a more urban environment.
If you enjoy the outdoors, Minnesota is a beautiful state that offers opportunities for fishing, skiing, and hiking.
There’s good access to high-quality healthcare services, including the Mayo Clinic.
Cons:
Minnesota’s winters are cold and snowy, which can be uncomfortable if you’re not used to the cold or don’t enjoy winter sports.
Taxes in Minnesota can be high, especially property taxes.
Mosquitoes can be an issue in the summer, which can be bothersome if you’re someone who likes spending time outside.
How retirement taxes work in Minnesota
While Minnesota does offer some tax savings for seniors, it’s not the most tax-friendly state.
Social Security taxes: Minnesota does tax Social Security income. However, if your income is below a certain threshold, then you may be partially exempt or fully exempt from social security taxes. For example, in 2024, married taxpayers filing jointly who had an adjusted gross income of $105,380 or less were fully exempt from social security taxes.
Retirement taxes: There are no tax exemptions or deductions for pension income.
Property tax deferral: Minnesota allows individuals who meet certain qualifications, including being 65 and older with a household income of $96,000 or less, to defer a portion of their property taxes.
Estate and inheritance taxes: There are estate taxes for estates worth more than $3 million. There are no inheritance taxes in Minnesota.
Property taxes: The average effective property tax rate is 1.05%. This is slightly above the national average.
Is it expensive to live in Minnesota?
The cost of living in Minnesota is 5% lower than the national average, but housing costs are significantly lower, at 16% below the national average.
Housing and cost of living in Minnesota
While housing costs are lower in Minnesota than the national average, they are more costly in certain areas. For example, a home in a prestigious area, like Minnetonka Beach, averages a whopping $2 million. Whereas, a home in a more rural city like Elmore averages $73,000.
Utilities and transportation costs are slightly below the national average. However, food costs are slightly above the national average.
The state sales tax in Minnesota is 6.875%. Groceries, clothing, and prescription and over-the-counter drugs are exempt from sales tax.
How does retiring in Minnesota compare to Wisconsin or Iowa?
If you’re thinking about retiring in the Midwest, Minnesota, Wisconsin, and Iowa might all be on your list.
While Minnesota has higher income taxes, it also has the best access to high-quality healthcare services. If you’re someone who enjoys experiencing all four seasons to enjoy winter sports, then Minnesota can be appealing. But if you’re averse to the cold, then you might prefer Wisconsin or Iowa.
Individuals who enjoy more temperate weather might prefer Wisconsin. While winters are still snowy, winters tend to be milder in Wisconsin than in Minnesota. Plus, summers in Wisconsin aren’t as hot as those in Iowa. The state also offers a cost of living that is close to the national average.
Iowa is the most affordable state among the three and does not tax retirement income for individuals aged 55 or older. However, it can be more difficult to access healthcare services in rural areas.
Deciding what state to retire in is a big decision. It’s important to think about what’s most important to you to help you find a state that suits your needs and supports the type of lifestyle you enjoy.
Best places to retire in Minnesota
While Minnesota’s cost of living is slightly below the national average, there are some more luxurious locations to live. These include:
Edina: An upscale suburb of Minneapolis, with walkable neighborhoods, fine dining, and boutique shopping. Well-kept walking trails and parks are also abundant in the area.
Wayzata: A Lake Minnetonka town with high-end restaurants and browsable art galleries. Several golf courses are also located nearby.
Rochester: Home to the Mayo Clinic, Rochester offers plenty of cultural and social activities like their annual RochesterFest.
More affordable places to retire that still offer Minnesota’s mix of urban amenities and outdoor living include:
Austin: With over 13 miles of paved biking trails and access to the Cedar River, Austin offers plenty of outdoor activities. When you’re looking for an indoor activity, you might visit Paramount Theater or the Hormel Historic Home.
Grand Rapids: With gorgeous lakes, rivers, and forests, Grand Rapids is an ideal location for outdoor lovers.
Baxter: With numerous lakes and ponds, Baxter is a great location for those who enjoy the outdoors and are looking for a peaceful pace of life.
Retirement communities in Minnesota
If you’re looking for a place to retire with easy access to amenities and social activities, then you might consider a retirement community. While there are several communities to choose from, some popular options include:
Trillum Woods: With a focus on an active lifestyle, Trillum Woods offers a variety of exercise activities, including weight training, dance classes, aquacise, Tai Chi, and yoga. Chef-prepared meals can be enjoyed in the main dining room, at the Minnehaha Pub, the cafe, or alfresco. Trillum Woods also offers skilled nursing and memory care.
Charter House: Affiliated with the Mayo Clinic, Charter House offers direct access to home health care services. You can stay active in the fitness center, which is open 24 hours a day, or indulge in some self-care at the on-site salon and spa. There are several dining areas, so you can choose what meals to enjoy.
The Lakes at Stillwater: Located on a 50-acre campus with scenic views of the lake and pond, The Lakes at Stillwater offers two- and three-bedroom homes and one- and two-bedroom apartments as well as an assisted living and memory care community. There’s a strong focus on social community, with activities like a ukulele club, video games, and pet therapy.
Senior health in Minnesota
Minnesota is ranked as the 7th healthiest state in America’s Health Rankings’ Senior Report. Quality healthcare is relatively easy to access in Minnesota, although it may be more difficult in more rural areas of the state.
Quality of healthcare in Minnesota
Minnesota has a number of high-quality, accessible healthcare facilities. The Mayo Clinic, which is often ranked as the #1 hospital in the U.S., is located in Rochester. This makes it easy to access specialized healthcare and diagnostic services. But, Minnesota is also home to a number of other high-quality healthcare facilities, including Abbott Northwestern Hospital, Allina Health, and Regions Hospital.
Minnesota offers an Elderly Waiver program for individuals 65 years of age or older who qualify for a nursing home level of care but wish to remain living in their own homes. This program helps to provide services like home health aides, home-delivered meals, and skilled nursing care.
Minnesota’s Senior LinkAge Line can help connect seniors and caregivers with services and answer questions about insurance, housing, and nursing home prescreening.
Medicare in Minnesota
There are over 1.1 million Medicare beneficiaries in Minnesota, which makes up about 19% of the population. About 40% of these beneficiaries remain on Original Medicare, whereas 60% have switched to a MN Medicare Advantage plan.
Minnesota Senior Health Options (MSHO) combines Medicare Assistance (MA) and Original Medicare into one comprehensive plan. This can be helpful to coordinate coverage.
If you want to learn more about Medicare in Minnesota, you can speak with a Chapter Medicare Advisor. Call us at (855) 900-2427 or schedule a free consultation.
Retiring in Minnesota
If you enjoy the beauty of the outdoors as well as the amenities offered in an urban environment, Minnesota can be a good choice. The state is regularly ranked as providing a good quality of life.