Retiring in Washington State? Taxes, Healthcare, and Cost of Living

Retirement looks different for everyone. For some, it means settling down near family. For others, it’s about finding a balance between financial sustainability and quality of life. If Washington State is on your shortlist, you’re not alone. With no state income tax, access to excellent healthcare, and miles of forest and coastline, it offers both practical and personal advantages. But it’s not perfect, and cost of living can vary widely depending on location.

Let’s walk through the major factors: taxes, healthcare, housing, and the opportunities Washington gives retirees to stay active and engaged—without spending much at all.

Washington Doesn’t Tax Retirement Income

One of the most talked-about features of retiring in Washington is its tax structure. The state does not impose an income tax, which means your Social Security benefits, pensions, IRA withdrawals, and 401(k) distributions are all tax-free at the state level. That’s a meaningful difference compared to states like California or Oregon, where those same income sources may be taxed.

While the lack of income tax is a major advantage, Washington does collect revenue in other ways. Sales tax is among the highest in the country. As of 2025, the state sales tax rate is 6.5%, but with local surcharges, it can climb above 10% in cities like Seattle and Tacoma. Property taxes are moderate overall, but assessed values have risen in many areas, especially around Puget Sound.

If you’re moving from a state with both high income and property taxes, you may see some relief. But if you’re coming from a low-cost Midwestern or Southern state, Washington could feel more expensive in other ways.

Healthcare Access Depends on Where You Live

Washington ranks well nationally for healthcare quality. According to the Commonwealth Fund, it’s in the top ten states for overall health system performance. Large hospital networks like Providence, UW Medicine, and MultiCare offer high-quality care throughout western Washington. The Seattle area in particular has a dense network of providers, including specialists and research hospitals.

Medicare Advantage plans are widely available across the state. In 2024, about 51% of Medicare-eligible residents in Washington chose a Medicare Advantage plan, a number that’s been trending upward. Premiums remain relatively affordable, though access can be more limited in rural counties.

Eastern Washington has seen healthcare consolidation, and smaller towns may not have the same depth of services. If you’re considering a rural retirement, be sure to map out your distance to primary care and urgent care services. Transportation and access can matter more than provider quality in those situations.

Housing Costs Vary Dramatically

Where you choose to live in Washington has a huge effect on your retirement budget. Median home prices remain high in King, Snohomish, and Pierce counties, where proximity to Seattle keeps demand strong. As of early 2025, the median home in King County still sells for more than $800,000. That number drops below $500,000 in Spokane County, and even further in some coastal or inland rural areas.

Retirees who already own a home may benefit from strong equity growth. For those relocating or downsizing, smaller communities can offer significant savings. Towns like Port Townsend, Sequim, Walla Walla, and Anacortes are popular with retirees due to their slower pace, cultural offerings, and more manageable housing markets.

If you plan to rent, expect to see higher rates in the western part of the state. In Seattle, average one-bedroom apartments rent for more than $2,000 a month. In Spokane, it’s closer to $1,300.

Everyday Living Costs

Utilities in Washington are generally reasonable. Thanks to hydroelectric power, electric bills are lower than the national average. Natural gas and water service can be more variable depending on the provider and town infrastructure.

Groceries and transportation, however, tend to be above national averages. Gasoline prices consistently rank among the highest in the U.S., due to both state gas taxes and supply chain limitations in certain regions. If you’re driving less or using public transit in urban areas, this may not matter much. But for rural retirees who rely on a car, fuel costs can add up.

Outdoor Activities That Don’t Cost a Thing

What Washington lacks in affordability, it makes up for in access to the outdoors. The state is packed with low-cost ways to stay active and connected without stretching your budget.

The Washington State Parks system includes more than 100 parks and recreation areas. A $30 Discover Pass gives you unlimited annual access to locations like Deception Pass, Fort Worden, and Lake Wenatchee. Seniors also qualify for discounted camping and day-use fees.

National parks like Mount Rainier and Olympic offer lifetime senior passes for $80. With trails, vistas, wildlife viewing, and ranger programs, you can spend entire weekends exploring without much overhead. You can also join low cost yoga events and nature retreats at Fox Creek Falls.

Closer to town, retirees in places like Bellingham, Tacoma, or Bellevue often take advantage of local walking trails, forest preserves, and community recreation centers. In some counties, retirees can even audit college classes or join intergenerational workshops through local libraries and YMCAs.

Retreats, Wellness, and Community

Washington has a strong tradition of wellness-focused retreats and community programs for older adults. In places like Whidbey Island and Leavenworth, you’ll find spiritual retreats, art workshops, yoga studios, and writing circles that cater to people over 60. Many operate on sliding-scale fees or through nonprofit organizations.

Whether you’re interested in meditation, pottery, or birdwatching, there’s no shortage of ways to connect with others and enjoy the slower rhythm of retirement. That kind of lifestyle support can matter as much as finances when deciding where to retire.

Washington May Not Be “Cheap,” But It Offers Value

Washington State doesn’t offer the lowest overall cost of living, but it provides something that many retirees value more: lifestyle quality. You can spend your time walking forest trails, visiting family, engaging with a vibrant arts scene, and enjoying tax-free retirement income.

Still, no decision should be made without looking at your personal numbers. A retirement specialist can help you compare cost-of-living tradeoffs, test relocation scenarios, and evaluate what each option means for your income, taxes, and healthcare access.

If you’re thinking seriously about retiring in Washington or relocating within the state, it may be time to get a tailored plan in place. The sooner you see the full picture, the more confident you’ll feel about your next move.