The Complete Guide to Retiring in Iowa
Iowa’s lower cost of living and tax savings appeal to many retirees. There are also a number of cultural and recreational activities that appeal to retirees.
If you’re considering retiring in Iowa, we’ll provide you with more details about the cost of living, healthcare access, and activity options.
What to expect from retiring in Iowa
Iowa residents experience all four seasons, with summers being warm and humid and winters being cold. Iowa tends to be hilly, making it a prime location for hiking and biking. There are several trails to explore, including the High Trestle Trail Bridge and the Trout Run Trail. Fishing is also a popular activity in the state, either in Iowa’s lakes, rivers, or the many stocked community ponds.
If you enjoy golf, Iowa has a number of options. There are over 400 public and private golf courses in the state, and many communities have their own 9-hole golf courses. Easily walkable par-3 courses are also available throughout the state.
Many retirees love the small-town feel and safety that Iowa has to offer. But Iowa also offers plenty of amenities. You can find art galleries, museums, and even the filming location of the movie “Field of Dreams.” The annual Iowa State Fair is also a major attraction, hosting live music, food vendors, and agricultural exhibits.
The pros and cons of retiring in Iowa
Now that you have a picture of what retiring in Iowa could look like, let’s explore the pros and cons in more detail.
Pros:
Iowa offers tax breaks for retirees. Social Security isn’t taxed, and there are exemptions on retirement income.
Iowa has low crime rates and a slower pace of life that appeals to many retirees.
If you enjoy outdoor activities, there’s plenty to do, including hiking, biking, and fishing.
Cons:
It can be difficult to access healthcare services and other amenities in smaller towns and rural areas.
Winters can be harsh and cold. Iowa is also at risk for extreme weather conditions, including thunderstorms and flooding.
The cost of living in Iowa is 13% higher than the national average. Property taxes are also higher in Iowa.
How retirement taxes work in Iowa
While Iowa does have a higher cost of living than the national average, the state also offers several tax savings for seniors. Let’s explore how retirement taxes work in Iowa in some more detail.
No Social Security tax: Iowa does not tax Social Security income. This is helpful for people who depend on Social Security for their retirement income.
Retirement income exception: Iowans who are 55 or older are exempt from paying state taxes on their retirement income.
Homeowner tax exemption: Homeowners over the age of 65 are exempt from taxes on the first $6,500 of their home’s value.
No state estate tax: There are no state taxes on inheritances for individuals living in Iowa, but federal taxes may still apply.
Higher property taxes: Iowa’s average effective property tax rate of 1.49% is higher than the national average. The median annual property tax payment is $2,508.
Is it expensive to live in Iowa?
It is relatively affordable to live in Iowa. The cost of living is 13% higher than the national average. However, housing, utilities, groceries, and healthcare services are more affordable. Housing costs are about 27% lower than the national average, and rent is about 30% lower than the national average. The average home price is around $220,000, and the average rent is about $1,000 per month.
According to the U.S. News & World Report’s Affordability Rankings, Iowa ranks #7 in both affordability and cost of living. Metropolitan areas tend to be more expensive than more rural areas.
How does retiring in Iowa compare to California or Washington state?
Iowa offers a lower cost of living in comparison to California and Washington. Housing and healthcare are also more affordable in Iowa. However, Washington can be more tax-friendly, as there are no state income taxes.
While California’s temperatures are generally hotter, winters in Iowa can be cold. Washington tends to have a more mild climate, but it rains often.
All three states have good access to healthcare. However, it can be a bit more difficult to access healthcare services if you live in the rural areas of Iowa. If you are considering retiring in Iowa, research access to healthcare in the specific area you want to live.
What are the best places to retire in Iowa?
Iowa offers a mix of high-end locations and more budget-friendly options. If you have a higher budget, you might consider:
Iowa City: A university town that offers access to fine arts venues, golf courses, shopping, and high-end dining. Because of its diverse population, Iowa City is influenced by several diverse cultures.
Waukee: A suburb of Des Moines, with excellent amenities and active living options. The city also has a strong community feel, hosting many community events throughout the year.
Ankeny: A northern suburb of Des Moines, with access to country clubs, wineries, and shopping.
Those looking for more budget-friendly options might consider:
Des Moines: A larger city that offers amenities and convenience without a high cost of living. Offers multiple golf courses, trail systems, and parks.
Davenport: A city located along the Mississippi River with a strong arts scene.
Burlington: Located along the Mississippi River, Burlington has many parks and trails. It’s also home to a theater and an arts center.
Senior health in Iowa
Iowa is ranked as the 25th healthiest state in America’s Health Rankings’ Senior Report. Generally, it’s easy to access healthcare services in Iowa. However, those living in rural areas may find it more difficult. Especially if you have specific healthcare needs, check on healthcare access in the specific area you want to live before retiring to Iowa!
Medicare in Iowa
There are about 680,000 Medicare beneficiaries in Iowa, which makes up 19% of the state’s population. 37% of these individuals are enrolled in Medicare Advantage plans, whereas 62% are on Original Medicare.
If you want to learn more about Medicare in Iowa, you can speak with a Chapter Medicare Advisor. Call us at (855) 900-2427 or schedule a free consultation.
Retiring in Iowa
For retirees who are looking for affordable housing and a slower pace of life, Iowa can be a good fit. There’s plenty to do if you enjoy the outdoors, including hiking, fishing, and biking.