States – Iowa


Iowa may not have sunny beaches or the warmest weather, but it is among the best states to retire in, according to studies by CNNMoney and MoneyRates. MoneyRates ranked the Hawkeye State the second-best state for retirement in 2014, citing its low crime rate and good quality of life for seniors. CNNMoney rated Iowa sixth in the country as a retirement destination because of availability of healthcare and overall resident satisfaction, noting that “”residents are some of the happiest in the country.”

The general happiness and welcoming attitude of people makes it easier to get involved in community and recreational activities. Iowa is known for producing writers and has the third highest high school graduation rate in the nation. Iowa’s universities have produced a number of astronauts, scientists, Nobel laureates, and Pulitzer Prize winners.

Many Iowans take pride in their communities. AARP magazine ranked Cedar Rapids number 7 out of “30 Most Liveable Cities” among mid-sized towns in 2015 and pointed out that people grow vegetable gardens in empty lots in the town. Among smaller towns, Marion came in at No. 9.

Iowa can also be easy on retirees’ pocketbooks, at least in the area of housing. Housing costs are about 12 percent lower than the national average. In Iowa City the median home price in 2014 was $172,700 and the cost of living is 4 percent below the national average.

Iowa’s state and local tax burden is also lower than the national average at 9.5% of income. The personal income tax system tops out at 8.98% starting at an income rate of $63,315 and is the fifth highest for states charging individual income taxes. A portion of retirement income up to $6,000 is exempt for those filing singly and up to $12,000 for those filing jointly. Social Security benefits are fully exempt. Iowa also does not collect state property taxes. There is an inheritance tax ranging from 1% to 15%, and a 6% state sales tax.

Another advantage of living in Iowa for many retirees is its low crime rate. Iowa ranks among the top for home and community safety.

Although most (86%) of Iowa’s land is made up of farms, there are some hills that are good for hiking and mountain biking. Iowa also has about 1,000 lakes and ponds offering some of the best fishing in the central U.S.

The climate is humid continental, and temperatures can reach extremes of hot and cold. Summer daytime temperatures are often in the nineties, while winter days can drop well below freezing. In the spring, there can be severe thunderstorms and tornadoes. Iowa has about 50 days of thunderstorms in a typical year.

Here are three destinations worth a look for retirees.


Ames is a town of 60,000 in the center of the state, about 30 miles north of Des Moines and the home of Iowa State University of Science and Technology. In 2010 Ames was ranked ninth on CNNMoney’s Best Places to Live list. Forbes magazine ranked Ames as one of “The 25 Best Places to Retire” in 2013 because of its college town ambiance, good air quality, and low cost of living and home prices.

The area has a large number of parks and arboretums, including an aquatic center and golf course. The Octagon Center for the Arts has exhibit galleries, art classes, studios, and a retail shop. The university campus is a good place for strolling the well-kept grounds and touring interesting buildings. It also sponsors many sporting events.

The Ames Figure Skating Club provides lessons and recreational to professional level skating opportunities. Other attractions include two beer breweries and a winery. There are also an art museum and textile museum.

Iowa City

Iowa City, with a population of 70,000 in the eastern part of the state, made Forbes magazine’s “25 Best Places for a Working Retirement.” Its 3.8 percent unemployment rate and brisk job growth make it appealing to those looking for a second career or part-time employment. Forbes also named it the second-best small metropolitan area for doing business in the U.S. in 2008.

Iowa City was the original capital of Iowa, and the Old Capitol Building is now a national historic landmark on the University of Iowa campus and is used for speeches and meetings. The University of Iowa Art Museum and the home of the first governor of Iowa are also noted attractions. The university hosts several top-ranked athletic teams including the Hawkeyes football team.

The city has many parks, some with walking paths, ball fields, swimming pools, and recreation centers. Annual events include the Iowa City Arts Festival and the nationally renowned Iowa City Jazz Festival, held on the City Plaza. The plaza also contains restaurants, bars, hotels, stores, and the Iowa City public library. It also is a gathering place for local artists and musicians.

Other regular events include open-air summer movies and free concerts, and the Iowa City Book Festival which features readings from prominent authors and literary events. The city has a strong literary heritage and hosts internationally famous literary programs such as the Iowa Writers Workshop, the Iowa Playwrights Workshop, and the International Writing Program. Healthcare is available through Mercy Hospital and the Iowa City VA Medical Center, which are also two of the city’s largest employers.


A small town of 8,000 in the northeast corner of Iowa, Decorah attracts retirees for its small-town environment, low cost of living, and cultural offerings.

The area has a strong Norwegian history because of the large number of Norwegian settlements in the area starting in the mid-Nineteenth Century. Each July Decorah hosts Nordic Fest, a celebration of Norwegian culture with ethnic dancing, food, and music. The town also hosts the Vesterheim Norwegian-American Museum, the largest museum in the country devoted to one immigrant group. The town is home to Luther College, a small liberal arts college formed in 1861.

The town is build atop an ancient, four-mile-wide underground crater that was formed when an asteroid hit the earth about 470 million years ago. The area’s topography is unusual for the state. Some places to explore the area’s natural features include Dunning’s Spring Park and Ice Cave. Several parks are built on bluffs including Phelps Park, Palisades Park, and Pulpit Rock. Trout Run Trail offers a good way to see the area’s natural beauty while walking or biking.

For more information about retirement in Iowa:

State overview in facts and figures

State taxes

State services for senior residents

Profiles of major cities

Retirement communities

Best regions for retirement