Retiring in New Jersey: Taxes, Healthcare & Cost of Living (2026)
New Jersey does not tax Social Security benefits and provides a significant retirement income exclusion for those 62+. The state is expensive — property taxes are the highest in the nation — but it packs a remarkable amount into a small geography: 130 miles of Atlantic coastline, the Pine Barrens, the Delaware Water Gap, and proximity to both New York City and Philadelphia. Healthcare is exceptional.
The combination of tax policy, healthcare infrastructure, climate, and cost of living determines how well your retirement savings will last in New Jersey. This guide covers the top cities for retirees, a full tax breakdown, healthcare access, and realistic budget estimates for 2026.
Whether you are relocating from a high-cost state or staying close to family, understanding the full picture matters. Use our tax comparison tool to see how New Jersey stacks up against other states you are considering, and check our home affordability calculator to estimate what you can buy on a retirement budget.
Top Retirement Cities in New Jersey
The following cities stand out for retirees in New Jersey based on cost of living, healthcare access, walkability, climate, and community infrastructure. The cost of living (CoL) index uses 100 as the national average — below 100 means cheaper than most of the country.
| City | CoL Index | Median Home Price | Climate |
|---|---|---|---|
| Cape May | 108 | $545,000 | Four seasons, maritime |
| Princeton | 125 | $795,000 | Four seasons, moderate |
| Red Bank | 110 | $495,000 | Four seasons, maritime |
| Lambertville | 108 | $475,000 | Four seasons, moderate |
| Asbury Park | 102 | $445,000 | Four seasons, maritime |
Cape May
Cape May is a National Historic Landmark city — the entire town center of Victorian architecture is preserved. The beaches, birding (Cape May is one of the top birding destinations in North America), and walkable town draw retirees. Cape Regional Medical Center provides care, and AtlantiCare in nearby Atlantic City handles more complex cases. The off-season (October through May) is the quieter, more communal time.
Walkability: Cape May earns a walk score of 60, which means many daily errands can be completed on foot. Retirees living near the downtown core can walk to grocery stores, pharmacies, restaurants, and medical offices without needing a car for every trip.
Climate: Cape May has a four seasons, maritime climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.
With a cost of living index of 108 and a median home price of $545,000, Cape May runs above the national average in cost. Check our affordability tool to see how your retirement income translates in Cape May, or review closing costs in New Jersey if you are planning a purchase.
Princeton
Princeton pairs Ivy League culture with a walkable downtown. Penn Medicine Princeton Medical Center provides comprehensive care. The university’s art museum, McCarter Theatre, and lectures are accessible to residents. Palmer Square is the town center. Housing is expensive, but the intellectual community and proximity to New York (60 minutes) and Philadelphia (50 minutes) create a retirement with depth.
Walkability: Princeton earns a walk score of 56, which means many daily errands can be completed on foot. Retirees living near the downtown core can walk to grocery stores, pharmacies, restaurants, and medical offices without needing a car for every trip.
Climate: Princeton has a four seasons, moderate climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.
With a cost of living index of 125 and a median home price of $795,000, Princeton runs above the national average in cost. Check our budget calculator to see how your retirement income translates in Princeton, or review closing costs in New Jersey if you are planning a purchase.
Red Bank
Red Bank sits on the Navesink River and has a vibrant downtown with independent shops, restaurants, and the Count Basie Center for the Arts. Riverview Medical Center provides care, and Monmouth Medical Center is nearby. The Two Rivers Area has beaches, harbors, and the Sandy Hook Gateway National Recreation Area. New York City is accessible via ferry (45 minutes from Atlantic Highlands).
Walkability: Red Bank earns a walk score of 56, which means many daily errands can be completed on foot. Retirees living near the downtown core can walk to grocery stores, pharmacies, restaurants, and medical offices without needing a car for every trip.
Climate: Red Bank has a four seasons, maritime climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.
With a cost of living index of 110 and a median home price of $495,000, Red Bank runs above the national average in cost. Check our affordability tool to see how your retirement income translates in Red Bank, or review closing costs in New Jersey if you are planning a purchase.
Lambertville
Lambertville, on the Delaware River, is a walkable arts community with galleries, antique shops, and restaurants. The Delaware & Raritan Canal towpath provides flat, scenic walking and cycling. Hunterdon Medical Center is 15 minutes east. New Hope, PA sits across the river for additional dining and shopping. The community is small (4,000 residents) but culturally engaged.
Walkability: Lambertville earns a walk score of 58, which means many daily errands can be completed on foot. Retirees living near the downtown core can walk to grocery stores, pharmacies, restaurants, and medical offices without needing a car for every trip.
Climate: Lambertville has a four seasons, moderate climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.
With a cost of living index of 108 and a median home price of $475,000, Lambertville runs above the national average in cost. Check our what can I afford calculator to see how your retirement income translates in Lambertville, or review closing costs in New Jersey if you are planning a purchase.
Asbury Park
Asbury Park has undergone a renaissance — the boardwalk, Stone Pony, and Convention Hall anchor an entertainment scene that draws visitors year-round. Monmouth Medical Center Southern Campus provides care, and Hackensack Meridian hospitals are nearby. The food scene is strong, the LGBTQ+ community is prominent, and the beachfront has been redeveloped with condos and restaurants.
Walkability: Asbury Park earns a walk score of 54, which means many daily errands can be completed on foot. Retirees living near the downtown core can walk to grocery stores, pharmacies, restaurants, and medical offices without needing a car for every trip.
Climate: Asbury Park has a four seasons, maritime climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.
With a cost of living index of 102 and a median home price of $445,000, Asbury Park is close to the national average in cost. Check our home affordability calculator to see how your retirement income translates in Asbury Park, or review closing costs in New Jersey if you are planning a purchase.
Tax Benefits for Retirees in New Jersey
New Jersey does not tax Social Security benefits, making it friendlier than average for retirees. Below is a summary of how New Jersey treats the major income sources retirees rely on.
| Tax Category | Details |
|---|---|
| State Income Tax | Graduated or flat |
| Social Security Taxed? | No |
| Pension Income Taxed? | Yes (as regular income) |
| Property Tax Senior Exemption | Yes (see details below) |
New Jersey does not tax Social Security benefits. Residents 62+ with gross income under $150,000 can exclude up to $100,000 of retirement income per couple ($75,000 single) — this covers pensions, 401(k)s, IRA distributions, and annuities. The state income tax ranges from 1.4% to 10.75%. Property taxes are the highest in the nation — the median effective rate is about 2.23%. The Senior Freeze program (Property Tax Reimbursement) reimburses the difference between current property taxes and the amount paid in a base year for qualifying seniors 65+ with income under $99,735. The state sales tax is 6.625%.
Tax rules change regularly, and your specific situation — filing status, total income, and income sources — determines the actual impact. Consult a tax professional who knows New Jersey tax law before making a relocation decision based on taxes alone. For a side-by-side comparison with other states, visit our compare state taxes.
If you are buying property in New Jersey, factor in the closing costs and ongoing property tax obligations. The best mortgage lenders in New Jersey can help you find competitive rates if you need financing for your retirement home.
Healthcare Access in New Jersey
Hackensack Meridian Health is the state’s largest system, with Hackensack University Medical Center nationally ranked. RWJBarnabas Health (Robert Wood Johnson, Newark Beth Israel, Monmouth Medical Center) provides extensive coverage. Penn Medicine Princeton and Morristown Medical Center (Atlantic Health) are nationally recognized. New Jersey residents also have access to New York City and Philadelphia hospitals. Medicare Advantage penetration is about 30%, with plans from Horizon, UnitedHealthcare, Aetna, and Humana.
When evaluating healthcare for retirement, consider proximity to a hospital with emergency services, the availability of specialists you may need (cardiology, orthopedics, oncology), and the Medicare Advantage plan options in the county where you plan to live. Medicare Advantage plans can reduce out-of-pocket costs significantly, but network restrictions mean you need to verify that your preferred doctors and hospitals are in-network.
If you have a chronic condition or anticipate needing specialized care, prioritize cities near major medical centers. The cities listed above were selected partly for their healthcare access. Telehealth services have expanded across New Jersey, which helps retirees in smaller communities access specialists without traveling to metro areas for every appointment.
Prescription drug costs also vary by plan and pharmacy. Review Medicare Part D options during open enrollment each fall, and consider whether a Medigap (Medicare Supplement) policy fits your budget and healthcare usage patterns.
Cost of Living for Retirees in New Jersey
Retirement costs in New Jersey depend on where you live, whether you own your home outright, your healthcare needs, and your lifestyle. Below are estimated annual budgets for a single retiree and a retired couple living in a mid-cost area of the state with mortgage-free housing. Renters should add $8,000 to $18,000 per year depending on location and apartment size.
| Expense Category | Single Retiree | Retired Couple |
|---|---|---|
| Housing (taxes, insurance, maintenance) | $10,080/yr | $14,560/yr |
| Food & Groceries | $6,480/yr | $10,080/yr |
| Healthcare & Insurance | $7,920/yr | $12,320/yr |
| Transportation | $5,040/yr | $7,840/yr |
| Utilities, Entertainment, Other | $6,480/yr | $11,200/yr |
| Estimated Total | $36,000/yr | $56,000/yr |
These estimates reflect a modest but comfortable lifestyle. Adding travel, dining out, hobbies, or long-term care insurance increases the total. Healthcare costs are the most unpredictable category — a single major medical event can add $5,000 to $15,000 in out-of-pocket expenses even with Medicare coverage.
Housing costs vary dramatically within New Jersey. The cities with higher CoL indexes in the table above will cost more for property taxes, insurance, and maintenance. If you are considering buying, use our mortgage calculator to estimate monthly payments, and check homeowner insurance costs in New Jersey to build an accurate budget.
For couples deciding between New Jersey and another state, the difference in annual costs can be $5,000 to $20,000 per year depending on tax savings, housing costs, and healthcare expenses. Run the numbers for both states before committing.
Frequently Asked Questions
Does New Jersey tax Social Security benefits?
No. New Jersey does not tax Social Security benefits at the state level. Other retirement income, such as pensions and 401(k) distributions, may be subject to the state income tax, though deductions and exemptions can reduce the amount owed.
What is the best city to retire in New Jersey?
Cape May consistently ranks among the top retirement destinations in New Jersey, offering a cost of living index of 108, a median home price of $545,000, and solid community infrastructure for retirees. However, the best city for you depends on what matters most: proximity to family, healthcare access, outdoor recreation, walkability, or affordability. Retirees who prioritize affordability may prefer one of the lower-CoL options listed above, while those focused on healthcare access should look at cities near major hospital systems.
How is healthcare access for retirees in New Jersey?
Healthcare access varies by region within New Jersey. Metro areas have multiple hospital systems, specialist practices, and Medicare Advantage plan options. Smaller cities and rural areas may have a single community hospital and limited specialist availability, which means traveling to a larger city for certain procedures. Check Medicare Advantage plan availability in the specific county where you plan to live before finalizing your decision.
How much does it cost to retire in New Jersey?
A single retiree can expect to spend roughly $36,000 per year in New Jersey, while a couple should budget approximately $56,000 per year. These figures assume mortgage-free housing in a mid-cost area of the state. Costs range widely — resort towns, coastal areas, and college towns tend to run 20% to 50% higher, while rural communities and smaller cities may run 10% to 20% lower. Housing, healthcare, and taxes are the three biggest variables.
Are there property tax breaks for seniors in New Jersey?
New Jersey does offer property tax relief programs for seniors, though the specific exemptions, income thresholds, and application processes vary by county and municipality. Common programs include homestead exemptions, assessment freezes for seniors over 65, and circuit-breaker credits that cap property taxes relative to income. Contact your county assessor’s office for current programs and application deadlines. Our New Jersey real estate guide covers property taxes and homeownership costs in more detail.
Retirement in Nearby States
If you are comparing New Jersey with neighboring states, these guides cover the same topics — top cities, tax benefits, healthcare access, and cost of living:
- Retiring in New York: Taxes, Healthcare & Cost of Living (2026)
- Retiring in Pennsylvania: Taxes, Healthcare & Cost of Living (2026)
- Retiring in Delaware: Taxes, Healthcare & Cost of Living (2026)
For more on the New Jersey housing market, explore our New Jersey real estate guide, review homeowner insurance options in New Jersey, or use our affordability tool to see what you can buy on a retirement budget. If you are planning a move, the mortgage calculator can help you estimate monthly payments on a new home.