Retirement Planning in Missouri

Retiring in the Show-Me State

Missouri appeals to retirees who want a moderate cost of living and a light tax load on benefits. According to the U.S. Census Bureau, 2020 to 2024 American Community Survey, about 17.9 percent of residents are 65 or older, about 68.1 percent of homes are owner occupied and the median home is valued near $230,300. A retired couple who sells a house in a high-priced state and buys in Springfield, Branson or the Lake of the Ozarks often frees up a good deal of cash. Many Missourians stay put, near family and doctors, and age in the house they raised children in.

Social Security benefits are not taxed by the state. The federal government may still tax part of them depending on total income. Missouri has no estate or inheritance tax. The state income tax still applies to other retirement income, though pension deductions can reduce the bill for qualifying households. Rates and deductions have been changing, so confirm the current rules with the Department of Revenue or a tax professional.

Public pensions: PSRS, PEERS, MOSERS and LAGERS

Missouri has a large group of public workers with defined benefit pensions. Teachers belong to the Public School Retirement System, known as PSRS, and other school employees belong to PEERS. State employees are covered by MOSERS, the Missouri State Employees Retirement System, and workers for many cities and counties use LAGERS, the Missouri Local Government Employees Retirement System. The Kansas City and St. Louis public school districts have their own retirement systems. Highway patrol and transportation workers fall under yet another plan.

At retirement you usually pick a payment option. A single-life payment is the largest but stops when you die. A joint and survivor option pays less now and continues for a spouse. A schoolteacher in Columbia retiring at 60 with a spouse who has no pension may be better off with a survivor option, even at a lower monthly amount. Some Missouri public employees do not pay into Social Security through their government jobs, so ask for an estimate of benefits. The Social Security Fairness Act, signed in January 2025, repealed the Windfall Elimination Provision and the Government Pension Offset. Our retirement planning guide explains income sources.

Where to live: the Ozarks, the lakes and the cities

Branson draws retirees with theaters, golf and lake access, and Springfield adds hospitals, shopping and a university town energy at a lower price than St. Louis or Kansas City. The Lake of the Ozarks and Table Rock Lake offer waterfront living, with higher insurance and maintenance costs than a typical subdivision. Columbia has a major medical center, and the St. Louis and Kansas City suburbs keep retirees close to grandchildren and specialists. Rural northern and southern counties are inexpensive but can be a long drive from a hospital, so check distance to care and the reach of your health plan before buying.

Try a season before you commit. Winters on the lakes are quiet, and some services slow down, while summer weekends fill the roads with visitors.

Property taxes and senior relief

Missouri property tax is set by counties and local districts, and rates vary a great deal from one school district to the next. The state has offered a property tax credit for low-income seniors and certain disabled veterans, which is often called the circuit breaker, and renters can qualify as well. Some counties have adopted a freeze for older homeowners, but each has its own rules, and the amounts and income limits change, so call your county assessor or collector for details. Keep in mind that a reassessment can raise the tax base even when rates stay the same.

Medicare, CLAIM and long-term care

Medicare starts at 65, and a seven-month window around the birthday month is the time to enroll without penalty. Missourians choose between Original Medicare with a supplement and a Medicare Advantage plan, and the right pick depends on which doctors and hospitals you use. The state’s counseling program is called CLAIM, short for Community Leaders Assisting the Insured of Missouri, and it offers free, unbiased help. Plan coverage and prices change each year, so review during the fall open enrollment period.

Medicare does not pay for long stays in a nursing home or most help at home. MO HealthNet, the state Medicaid program, can pay for long-term care for those who qualify by income and assets, and it may seek repayment from an estate after death, so speak with an elder law attorney before moving assets. Some people buy long-term care insurance or hybrid life policies in their fifties or sixties to cover the gap.

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Turning savings into a paycheck

Many retirees picture their savings as three pools sorted by when they will be needed. Cash and short-term bonds cover the first few years. Balanced holdings cover the next decade. Stocks carry the long stretch, so inflation does not erode buying power. A retiree with a pension that covers basic bills can hold more stocks than one living on savings alone. The order in which accounts are tapped also matters: taxable accounts, then tax-deferred accounts, then Roth accounts is a common starting point, though a Roth conversion in a low-income year can improve the result. Our tax planning guide covers federal basics.

Farm and business owners retiring

A Missouri farmer retiring at 66 often owns land that is worth far more than the retirement account. Options include cash rent to a neighbor, selling part of the land, bringing a child into the operation or placing land in a trust. A retiring business owner in Joplin or St. Joseph faces similar choices about a sale and the income that follows. Settle who gets what while you are healthy, because land can become a point of friction in families.

What retirement advice costs

Choosing a retirement advisor in Missouri

1. Ask for a written illustration showing how savings, pensions and Social Security become monthly income.
2. Ask whether the advisor has worked with PSRS, PEERS, MOSERS or LAGERS members.
3. Check the advisor with the SEC, FINRA and the Missouri Securities Division.
4. Get the total yearly cost in dollars.
5. Confirm that claiming ages for Social Security are tested for each spouse.
6. Walk away from anyone who leads with a product pitch.

Social Security timing and papers to update

Benefits start at 62 and grow each year you wait until 70. In a couple, the larger check becomes the survivor benefit, so delaying the bigger earner protects the longer-lived spouse. Missouri does not tax benefits, so the main question is federal tax on up to 85 percent of them. Then update the paperwork: a will, a durable power of attorney, a health care directive and beneficiary forms. Missouri allows a beneficiary deed that passes real estate outside probate, and married couples often hold their home as tenants by the entirety. Review everything after a marriage, a death or a move.

Health costs and the gap before Medicare

Retiring before 65 means paying for coverage on your own until Medicare begins. Options include a spouse’s plan, COBRA for a limited time, or a plan from the federal marketplace, where premiums depend on income. A Missouri couple who retires at 62 with careful control of taxable income may qualify for meaningful premium help, which is one reason planners look at income in the early years. Missouri expanded Medicaid eligibility in 2021, but it is based on income and does not suit most people with large savings. Run the numbers before you leave a job with insurance.

A sample Missouri retirement

Consider a couple in Jefferson City, he a retired state worker with a MOSERS pension and she a part-time bookkeeper, both 64. Their pension covers the mortgage and utilities, Social Security at 67 will cover groceries and travel, and a modest 401(k) funds the gap and surprises. With no state tax on Social Security and a pension that may qualify for a deduction, their tax bill is mostly federal. Their main decisions are when she claims Social Security, how to handle the health plan until Medicare, and how to keep a reserve for a new roof.

Keeping the house through the weather

Retirees on fixed income are hit hardest by a surprise roof bill. Hail across Missouri leads many insurers to price roofs on actual cash value as they age, which reduces what a claim pays. Ask your agent how the roof is covered and set aside money for replacement before it is needed. Retirees near the Missouri, Meramec or Mississippi rivers should also check flood coverage, and those who plan to spend winters elsewhere should tell the insurer about vacancy rules.

Frequently asked questions