Retire in Massachusetts: Cost, Taxes & FIRE Number for 2026
Massachusetts boasts the #2 healthcare ranking in the nation and a world-class medical infrastructure — but its D tax grade and $82,000 average annual retirement cost make it one of the priciest states to retire in.
What It Costs to Retire in Massachusetts
The average retiree in Massachusetts spends about $82,000 a year ($6,833/month), based on BLS spending data for households 65 and older, adjusted for Massachusetts's high cost of living. That works out to a standard retirement number of $2,050,000 under the 4% rule, or $2.34M for early retirees using the more conservative 3.5% FIRE withdrawal rate.
Massachusetts earns a D retirement tax grade from Plootus Research. The 5% flat state income tax applies to most retirement income including pensions and IRA withdrawals, though Social Security benefits are exempt. High property taxes and an expensive cost of living compound the tax burden, pushing the overall grade down significantly.
The state's singular advantage is its #2 national healthcare ranking — driven by the concentration of world-class hospitals, research institutions, and specialists in Greater Boston. Retirees who place healthcare access above all else will find few states that can match Massachusetts on that dimension.
Massachusetts Retirement at a Glance
| Annual Retirement Cost | $82,000 ($6,833/mo) |
| Standard Retirement Number (4% rule) | $2,050,000 |
| FIRE Number (3.5% SWR) | $2,342,857 |
| Retirement Tax Grade | D |
| State Income Tax | 5% flat |
| Social Security Tax | No tax |
| Healthcare Rank | #2 of 50 |
| Avg. Household Income | $88,820 |
| Median Household Income | $71,460 |
| Overall Retirement Rating | ★★☆☆☆ |
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Massachusetts vs. Nearby States
| State | Tax Grade | HC Rank | Annual Cost |
|---|---|---|---|
| Massachusetts | D | #2 | $82,000 |
| Connecticut | D | #1 | $74,000 |
| New York | F | #12 | $95,000 |
| Rhode Island | D | #17 | $64,000 |
Massachusetts Retirement Tax Overview
State Income Tax
Massachusetts levies a flat 5% income tax on most retirement income including IRA withdrawals, pension distributions, and investment income. While simpler than graduated tax systems, the 5% rate still creates a meaningful annual tax liability for retirees drawing from retirement accounts — contributing directly to the state's D tax grade.
Social Security Tax
Massachusetts does not tax Social Security retirement benefits. For retirees whose income is primarily Social Security, this exemption provides meaningful relief — but most retirees with significant IRA or pension income will still feel the impact of the 5% flat rate on those withdrawals.
Healthcare in Retirement in Massachusetts
Massachusetts ranks #2 nationally for healthcare quality — an exceptional result that reflects the extraordinary concentration of world-class hospitals and specialists in the Greater Boston area and beyond. Mass General Brigham, Dana-Farber Cancer Institute, Brigham and Women's Hospital, and Boston Children's Hospital are all consistently ranked among the nation's best. For retirees who prioritize access to elite medical care, Massachusetts is virtually unmatched.
HC Rank #2: Massachusetts is one of the top two states in the nation for retiree healthcare access. The Boston metropolitan area alone contains more top-ranked hospitals and specialists than most entire regions of the country. Retirees here benefit from cutting-edge treatments, research-backed care, and exceptional access across virtually all medical specialties.
Frequently Asked Questions: Retiring in Massachusetts
Massachusetts earns a D retirement tax grade — one of the lower grades nationally — driven by its high cost of living and 5% flat income tax on most retirement income. It does rank #2 nationally for healthcare quality, which is a major draw for retirees who prioritize access to top-tier medical care. Average annual retirement spending runs about $82,000, requiring roughly $2,050,000 in savings under the standard 4% rule.
Massachusetts does not tax Social Security benefits. However, the state does impose a 5% flat income tax on most other retirement income including pension distributions and IRA withdrawals, which contributes significantly to its D tax grade.
Using the standard 4% rule, retiring in Massachusetts on its average annual cost of $82,000 requires approximately $2,050,000 in savings. That figure excludes Social Security, which most retirees layer on top. Massachusetts is one of the most expensive states to retire in, driven by high housing, healthcare, and general cost of living.
At a 3.5% safe withdrawal rate — the more conservative rate recommended for early retirees facing a 40–50+ year horizon — Massachusetts's FIRE number is approximately $2.34M, based on its $82,000/year average cost. Early retirees in Massachusetts also face significant healthcare costs before Medicare eligibility at 65.
Massachusetts ranks #2 nationally for healthcare quality — an exceptional result that reflects the density of world-class hospitals and specialists in Boston and the broader region. Mass General Brigham, Dana-Farber Cancer Institute, and dozens of other top-ranked facilities make Massachusetts one of the best states in the country for retirees who place healthcare access at the top of their priority list.
Sources
- Plootus Research Team, 2026 State Retirement Cost Analysis
- U.S. Bureau of Economic Analysis — Regional Price Parities
- Massachusetts Department of Revenue — Income Tax Guide
- Commonwealth Fund — State Healthcare Rankings 2025
- U.S. Census Bureau — American Community Survey
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