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How We Rank the Best Places to Live & Retire

The U.S. News & World Report Best Places rankings are based on an analysis of public data and user opinions. To top the list, a place must earn high scores in criteria such as desirability and quality of life.

2020-2021 Best Places to Live Methodology

U.S. News & World Report's Best Places to Live rankings are intended to help readers make the most informed decision when choosing where to settle down. Metro areas in the rankings are evaluated using data from trusted sources, including the U.S. Census Bureau, the FBI, the U.S. Department of Labor and U.S. News' own internal resources. This data was categorized into the five indexes listed below and then evaluated using a methodology determined by Americans' preferences. The percent weighting for each index follows the answers from a public survey in August 2020 in which people from across the country voted for what they believed was the most important factor to consider when choosing where to live.

Job Market Index 21.6%

The Job Market Index measures the strength of each metro area's job market. To do this, we assessed the following two factors to determine how likely residents are to find employment in each metro area and their earning potential there:

  • Unemployment Rate (50%): We've calculated the 12-month moving unemployment rate using data from the Department of Labor's Bureau of Labor Statistics. This represents whether the job market is growing, struggling or remaining stable.
  • Average Salary (50%): The average salary, as calculated by the BLS, is the best indicator of earning potential in a metro area.

Value Index 23.4%

The Value Index, also called Housing Affordability Index, measures how comfortably the average resident of each metro area can afford to live within his or her means. To accomplish this, we compared the median annual household income with the housing cost in each metro area. The Value Index is determined by dividing the blended annual housing cost by the blended median annual household income for each metro area.

  • Blended Median Annual Household Income: Using data from the U.S. Census, we determined the percentage of the metro area population that owns a home with a mortgage and the percentage of the population that rents a home. Using those percentages, we calculated a blended median annual household income for each metro area.
  • Blended Annual Housing Cost: To determine the annual cost of a mortgage in each metro area, we consulted the U.S. Census, which collects data on the amount homeowners pay for housing (including mortgage, utilities and taxes). To determine the housing cost for renters, we collected the median gross rent of each metro area, which includes utilities if paid by renters. We multiplied the cost of living for owners and renters by 12 to get the annual cost, and then using our ratio of renters to owners, we calculated the blended annual housing cost.

Quality of Life Index 25.7%

The Quality of Life Index measures how satisfied residents are with their daily lives in each ranked metro area. To calculate the Quality of Life scores, we evaluated multiple aspects of life in each metro area using a weighted average. To determine the weightings, we surveyed people across the U.S. to see how important they consider each aspect evaluated in the index. The Quality of Life Index takes into account:

  • Crime Rates (30%): We measured each metro area's murder and property crime rates per 100,000 people, as determined by the FBI's Uniform Crime Reports.
  • Quality and Availability of Health Care (10%): Using data from the U.S. News Best Hospitals rankings, we measured the availability of quality health care by determining the quantity of ranked facilities within 50, 100 and 250 miles of each metro area.
  • Quality of Education (25%): Using data from the U.S. News Best High Schools rankings, we determined the availability of a quality education by calculating the average college readiness score of all public schools in the metro area and comparing it with that of all the other ranked metro areas.
  • Well-being (15%): We used the composite score from the Gallup National Health and Well-Being Index (which analyzes resident satisfaction in the following areas: purpose, social, financial, community and physical) as a representation of whether residents of each metro area are generally happy with their day-to-day lives.
  • Commuter Index (20%): The Commuter Index used the U.S. Census' calculation of average commute time, which is a composite of the time spent traveling door to door, whether by foot, public transit, car or bicycle.

Desirability Index 16.4%

The Desirability Index measures whether people want to live in a given metro area. To determine this, we asked people from all over the U.S. where they'd prefer to live.

  • Desirability Survey: Using SurveyMonkey, we polled approximately 3,000 people across the country to find out in which of the ranked metro areas they would most like to live. The metro areas were then ranked according to the percentage of the total votes they received. This survey was conducted in August 2020.

Net Migration 13%

Net Migration measures whether people are moving to or away from each metro area. While the Desirability Index measures whether a metro area is appealing, Net Migration represents whether a metro area is actually attracting new residents.

  • Net Migration: Using data from the U.S. Census – and eliminating any fluctuations caused by births or deaths – we determined how many people are moving to or away from each metro area.

Note: If a piece of data was not available for a given metro area, we adjusted the weighting of the other scoring categories for which we had data on a pro rata basis so that no metro area benefited or suffered from missing data.

How We Did the Math

The data we collected from each of our sources came in a variety of forms, from flat numbers to negative numbers to percentages. Before imputing each data point into our equations, we had to standardize it so it could be compared on an apples-to-apples basis with other data points we evaluated.

To balance these metrics, we used a standard deviation (or Z-Score) calculation to determine each data point's differentiation from the data set's mean and then used the Z-Score to create a standardized U.S. News score using the method outlined below:

  • Calculating the Z-Score: The Z-Score represents a data point's relation to the mean measurement of the data set. The Z-Score is negative when the data point is below the mean and positive when it's above the mean; a Z-Score of 0 means it's equal to the mean. To determine the Z-Score for each data point, we calculated the mean of that same data point across all ranked metro areas. We then subtracted the data point from the mean and divided it by the standard deviation.
  • Calculating the T-Score: We used a T-Score calculation to convert the Z-Score to a 0-100 scale by multiplying the Z-Score by 10. To ensure that the mean was equal across all data points, we added our desired scoring mean (between 0 and 10) to the T-Score to create an adjusted T-Score.
  • Calculating the U.S. News Score: To calculate the U.S. News Score, we divided the adjusted T-Score by 10 to create a 0-10 point system across the board that allowed us to accurately apply our methodology.

Best places FAQ

2020-2021 Best Places to Retire Rankings Methodology

U.S. News & World Report’s Best Places to Retire rankings have been popular for many years. With the 2020-21 rankings, U.S. News has undertaken a comprehensive evaluation of how well the 150 largest metropolitan areas in the U.S. (where the majority of the population lives) meet Americans’ expectations in retirement.

Purpose of the Rankings

The Best Places to Retire rankings are intended to help people narrow their choices of where to live in retirement. Without question, individual preferences and family proximity weigh heavily for those choosing where to retire. But retirees and future retirees want similar things, regardless of where they live today. To prepare the 2020-21 Best Places to Retire rankings, we surveyed those nearing retirement age (45-59) and those who are of retirement age (60 or older) for guidance on what matters most to them. These groups are our target audiences, and our goal is to provide them with an approachable, useful place to start planning for retirement.

Rankings Methodology

U.S. News evaluated the 150 most populous metropolitan areas in the U.S., including Puerto Rico, for the 2020-21 Best Places to Retire rankings. Smaller cities and regions, including some that are popular with retirees, were not included in the analysis.

The rankings are based on overall retirement scores that we calculated for each metro area. The overall retirement score is a weighted average of six indexes. The overall retirement score and each index score were calculated on a 10-point scale based on the data sources and scoring methodology described below. The six indexes are Housing Affordability, Happiness, Desirability, Retiree Taxes, Job Market and Health Care Quality.

The weights for each index were determined based on an online survey conducted in August 2020 by U.S. News of those approaching or at retirement age. Respondents were asked to indicate what attributes of a retirement destination were most important to them, choosing from a predefined list of options. Responses were collected from 3,052 people 45 and older nationwide. Based on the survey scoring, U.S. News assigned the following weights to the indexes in compiling the overall retirement score for each city:

Happiness Index – 22.7%

Housing Affordability Index – 20.2%

Health Care Quality Index – 18.1%

Retiree Taxes Index – 14.6%

Desirability Index – 13.5%

Job Market Index – 10.9%

Happiness Index 22.7%

The Happiness Index represents how content residents are with important aspects of their daily lives. The index is based on the Gallup National Health and Well-Being Index scores, as published in 2019, for each metropolitan area.

Housing Affordability Index 20.2%

The Housing Affordability Index assesses the comparative cost of housing in the metropolitan areas included in the rankings. To estimate the annual housing costs by metro area, we used the most recent U.S. Census Bureau data to look at both the median annual housing costs for homeowners with a mortgage and the median annual gross rent, which may include utilities if they are paid by tenants. We then created a blended annual housing cost for each metro area using the ratio of renters to homeowners with a mortgage.

Health Care Quality Index 18.1%

Using data from the U.S. News Best Hospitals rankings, the Health Care Quality Index measures the availability of top-quality health care in each metro area. To make the ranking more accurate for retirees, we excluded children’s hospitals in our evaluations. The index is scored based on the quantity and quality of U.S. News-ranked and -rated facilities within 50, 100 and 250 miles of each metro area.

Retiree Taxes Index 14.6%

The Retiree Taxes Index measures the expected tax friendliness of each metro area for retirees. To estimate tax friendliness, we created a composite retirement tax score based on a Sales Tax Index (40% of the score) and an Income Tax Index (60% of the score). We examined tax rates as reported by the Tax Foundation and Wolters Kluwer for 2020 and blended state-level taxes for metropolitan areas that include multiple states. For example, the Washington, D.C., metropolitan area includes Maryland, Virginia and the District of Columbia.

States have wildly different approaches to how they tax housing, sales, regular income and – importantly – Social Security income. As of 2020, 37 states do not tax Social Security income. Since over half of retirees rely on Social Security for more than 50% of their income, this is an important factor. To account for this, half the Income Tax Index is based on the state’s income tax rates for regular income, with the other half on the state’s taxation of Social Security income.

Desirability Index 13.5%

The Desirability Index represents how interested Americans are in retiring in a given metropolitan area. To determine this, U.S. News conducted an online survey that asked people 45 and older across the country to choose from a randomized subset of the metropolitan areas being analyzed. Metro areas were then scored according to the percentage of the total votes they received in the survey.

Job Market Index 10.9%

Americans have a variety of views on what it means to be retired. For many people, retirement does not mean exiting the workforce completely, so living in a community with ample opportunities for full- or part-time employment can be important.

The Job Market Index measures the strength of each metro area's job market. To evaluate this, we considered two factors: ease of finding employment and earning potential. The area’s unemployment rate (50% of the index score) is based on the 12-month rolling average unemployment rate from the U.S. Department of Labor's Bureau of Labor Statistics. The area’s average salary (50% of the index score) was also retrieved from BLS data at that time.

Best Places to Live and Retire FAQ