How is Oklahoma for Retirement?

If Southern hospitality and quiet living in a prairie state sound like your dream for your golden years, then Oklahoma is worth putting on your retirement radar. A low cost of living and tax breaks for seniors, paired with clement weather, leave you with plenty of options. Here’s what you should know about retiring to Oklahoma, and some of the best towns to consider.

Oklahoma is a favorable state for retirement living. The property tax rate is slightly below average (0.85%) and housing costs are affordable. Social Security is exempt from state income taxes, while other retirement incomes like pensions and 401(k) withdrawals are subject to state income taxes. But, there are ample deductions for retirees to offset these taxes. Local sales tax is average, with the only downside being sales taxes on groceries. Overall, Oklahoma can be a good state to retire to.

Is Oklahoma tax-friendly for retirement?

Oklahoma is a relatively tax-friendly state for retirement. The state exempts Social Security retirement income from state income taxes. Other retirement incomes like pensions and withdrawals from 401(k) or IRA are taxed, but there is a generous $10,000 per annum deduction. This also applies to income from 403(b)s and 457(b)s.

You must file Oklahoma's Schedule 511-A to claim this deduction. This tax form allows Social Security income to be deducted from your overall income tax. Above the $10,000 limit, normal tax rates will apply, with income tax rates ranging from 0.25% to 4.75%.

How much are sales taxes in Oklahoma?

The state sales tax rate in Oklahoma is 4.5%, while local sales taxes can go up to 7%. Overall, you will pay around 9% in combined sales taxes. Unlike many states, Oklahoma does tax groceries. To offset this, there is a credit for low-income households. However, items like prescription medication and clothing are exempt from sales taxes.

Gasoline is taxed at $0.19, lower than most states. Oklahoma also collects sin taxes on indulgent items like alcohol and tobacco, but they are low. There are no inheritance or estate taxes.

How much are property taxes in Oklahoma?

Property taxes in Oklahoma are reasonably low and the low property costs and rents make it cheap to own or rent a home. The state-wide average effective rate lies at 0.85%, below the national average. The median annual property tax rate is about $1,400.

Retirees over 65 years of age with a household income below $73,200, who both own and occupy their home, can put a tax freeze in place. This would exempt you from property value increases and greatly lower your property taxes over your retirement.

Oklahoma homeowners may qualify for homestead exemptions on property taxes. You can, for example, claim an additional $1,000 credit under the homestead exemption for primary dwellings.

The pros of retiring in Oklahoma

Low cost of living

Oklahoma ranks second-lowest on the cost of living in the US. Combined with retirement-friendly taxation and low property costs, this makes it immensely appealing to seniors.

Great climate

Oklahoma is sunny for most of the year, and its winters are mild. It has four crisply defined seasons. Summers are not overpoweringly hot.

Southern hospitality

When you move for retirement, finding a welcoming and hospitable location is intimidating. Not so much in Oklahoma! Expect to easily find welcoming communities and a lively social scene to enjoy in your retirement.

Convenient commuting

Most towns in Oklahoma are small, with amenities situated close to each other. Traffic volumes are generally low, even in cities, and there’s often no noticeable ‘rush hour’. It’s a great place to slow down and enjoy the moment while still being able to access everything you need.

Military and economy

There’s a strong network of military bases in Oklahoma, meaning retired veterans will feel very much at home. Paired with a thriving economy at all levels, this leaves plenty of scope to still earn in your retirement years, enjoy an active social life, and potentially participate in veteran-focused programs.

The cons of retiring in Oklahoma

Medical care

Oklahoma is not a top performer for medical care in the US. This could be a cause for concern for seniors. There are plenty of facilities, and this issue is being addressed as the area becomes more popular. But care can be basic, especially in rural areas.

Mercurial storms

While Oklahoma doesn’t lie in the Tornado Belt, it is very close to it. You’re unlikely to ever encounter a real tornado in Oklahoma, but April and May can bring heavy storms. Additionally, winters can bring hailstorms.

Diversity

There‘s very little political and religious diversity in Oklahoma. For retirees used to more diverse populations and environments, you might find the homogeneity a little stifling.

Food tax

While Oklahoma is overall favorable to retirees, the reasonably high sales tax on food items is off-putting. It’s very well balanced by a low cost of living, but worth considering before you retire here.

The prairies

If you enjoy vast open spaces, Oklahoma is for you. If you were hoping for some more exciting geography in your retirement, you won’t find it here. There are a few mountain ranges, county-dependent, but expect rolling plains and grassland to make up most of the view.

Best places to retire in Oklahoma

Stillwater

Stillwater was voted one of the best small cities in the US by CNN and Money Magazine. It has a vibrant small-town feel and fantastic outdoor living. Enjoy hikes, over 20 parks, and excellent routes for jogging and biking to stay active in retirement. The medical care here is better than average for the state, and property prices are great.

Miami

Lying along famous Route 66 and close to historic Ribbon Road, Miami may be a great town for retirees wanting a more diverse social environment than is normal in Oklahoma. There are some fantastic cultural facilities here, and travelers from out of town are common.

Ardmore

Ardmore is ideal for an active retirement. Here you’ll find easy hiking and picnicking, plenty of boating and fishing, and great tennis, baseball, and golf facilities. Most of it can be enjoyed year-round. Lake Murray State Park, Oklahoma’s oldest and largest, is here. There are some interesting museums and cultural activities to enjoy, too.

Jenks

Right on the edge of the thriving Tulsa area, Jenks is quiet, picturesque, and charming. Houses are affordable and healthcare is surprisingly good. The Jenks Senior Citizens Group is very active in the community. Tulsa International Airport and many highway connections are close at hand, so this is a great option for retirees who enjoy travel. The town is known for its antiques, restaurants, and an appealing pace of life.