A Complete Guide To Retiring in Texas
Learn about retirement in Texas, from taxes to lifestyle choices
Texas has become an increasingly popular retirement destination, particularly in cities like Austin. From 2010 to 2020, the number of retirees in Austin, TX, doubled! Many are attracted to the warm climate and low taxes. If you are considering retiring to Texas, you need to know about the advantages and disadvantages. In this guide, we share details to help you understand what retiring to Texas is like.
Key Takeaways
Texas is relatively tax-friendly for retirees, with no income tax
The weather in Texas is warm, even in the winter, but can be very hot in the summer
364 retirement communities exist in Texas
Healthcare in Texas has a relatively low rating, but Texas also has more hospitals than any other state
The cost of living and housing in Texas is lower than in many other states
Pros and cons of retiring in Texas
Texas has many aspects that make it an ideal retirement place for some – and totally unsuitable for others. Some of the pros and cons include:
Pros
Warm weather means the winters in Texas are mild, which is great for those who hate the cold.
Texas has no state income tax, so your Social Security benefits or 401(K) will not be reduced.
Home prices in Texas are lower than the national average.
Texas has a diverse landscape, with desert areas, forests, mountains, and a long coastline.
Cons
The Texas summer heat is too much for many people. 90-degree days are not uncommon, and summer allergies might be a problem.
Texas has some extreme weather—tornadoes are more common than in most states. It also suffers from severe thunderstorms and hurricane damage.
Public transportation options are limited in Texas.
More rural areas face limited access to healthcare facilities and providers, including long wait periods for specialists.
Retirement taxes in Texas
Texas has no state income taxes. Neither your retirement income nor any wages from your job will be taxed. However, Texas also has one of the highest average property tax rates in the country, at 1.6 percent. If you are over 65, you can apply for a $10,000 exemption from property taxes. There is also a $100,000 exemption available on a homestead, a property you at least partially own and use as a primary residence. You can also claim an additional “property freeze” that fixes their school district taxes at the same level they were when you turned 65.
Retirement communities in Texas
The most popular city in Texas to retire to is San Antonio. San Antonio is also the only one of the ten largest cities in the US to also be in the list of top ten places retirees are moving. Low costs of housing, excellent healthcare (including 9 hospitals), and the mild weather have attracted many seniors to the area.
Other popular cities for retirees are:
Austin, where the number of retirees has doubled
Port Arthur, which has many beachfront areas
Houston, one of Texas’ largest cities and where there are more hospitals than any other area in Texas
Overall, Texas has 364 retirement communities. Most of them are located near urban areas, but there are some located in more rural areas.
Climate and outdoor recreation in Texas
Texas is a warm state; only a few parts of it ever see snow. The eastern parts of the state are relatively humid, with a rainy season in April and May. The western parts of the state are more arid and can experience droughts. Coastal areas get the most rain in September, during which hurricanes can be a threat.
With warm weather all year, Texas is a great place for outdoor activities. Texas has 14 national parks offering everything from petrified dinosaur tracks to caves for spelunking. Hunting is also a popular sport in Texas. Finally, Texas’ coast line and many lakes offer opportunities to boat, swim, and fish.
Housing and cost of living in Texas
The cost of housing in Texas is lower than in many states. The average price of a home in Texas is $290,863, which is lower in comparison to the national average of $362,481. What you’ll pay for a home depends on where you choose to live. In Dallas you’ll pay an average of $361,199 and in Odessa you’ll pay an average of $197,136.
Texas’ state sales tax is 6.25%. Local areas may stack on additional sales taxes. There are also additional taxes on alcohol, gas, and diesel fuel.
Utility bills are one of the only costs that are higher in Texas. Texas residents spend an average of $465 a month on utilities, higher than the national average of $429.33.
Resources for seniors in Texas
The Texas Department of Health and Human Services oversees most programs for seniors in Texas. Some programs provide assistance with finding long-term care and resources for caregivers. A variety of senior centers exist around Texas that provide meals and other services for seniors. Senior centers can also help you get assistance for many other needs.
Quality of healthcare in Texas
The United Health Foundation gave Texas a ranking of 38 out of the 50 states for older adult health. That said, Texas has 407 hospitals, more than any other state. 27 of those hospitals were ranked among the 250 best hospitals in the country. Houston Methodist Hospital got particularly high ratings for its gastrointestinal care, cardiac and critical care, and neurosurgery.
Medicare in Texas
With 4.6 million Medicare beneficiaries, Texas has the third most, behind Florida and California. If you’re over 65 or have certain disabilities, you’re eligible for Medicare.
There’s a seven-month period around your birth month in which you can enroll in Medicare (it starts three months before your birth month and ends three months after). When you first enroll in Medicare, you’ll enroll in Original Medicare, which is made up of Part A and Part B. You also have additional coverage options, including Part D (prescription drug coverage), Medicare Supplement plans, which stack on top of Original Medicare, and Medicare Advantage, which replaces Original Medicare. Below are links to additional resources that go into more detail about Medicare in Texas:
Retiring in Texas
Texas has become one of the fastest-growing states for retirees. After reading everything above, you might want to retire there as well. Once you’ve picked some places in the state that sound good to you, take a trip there and see if it’s indeed everything you were looking for.