New York City is known for being notoriously pricey.

And now, the state overall ranks as the most expensive place to retire in the U.S., according to recent Bankrate data.

To determine each state's affordability, Bankrate reviewed several public and private datasets, including property and sales tax rates from the Tax Foundation and cost of living data from the Council for Community and Economic Research.

New York moved up to the top spot from ninth place on last year's list of the most expensive states to retire. This may be explained by the rising housing costs in NYC, where the majority of the state's population lives. On average, annual mortgage expenses are around 34% lower outside of New York, according to the Fiscal Policy Institute.

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On the upside, New York is "moderately" tax-friendly for retirees, per SmartAsset's analysis. Although retirement income from your 401(k), IRA or pension is taxable, residents 59½ or older may qualify for a deduction of up to $20,000. Additionally, the state doesn't tax Social Security benefits.

California ranks as the second-most expensive state to retire for the second year in a row, according to Bankrate. Although retirees may be drawn to California's relatively warm weather and access to beaches, their retirement dollars may not stretch very far there. The Golden State doesn't tax Social Security benefits, but applies income taxes to withdrawals from other sources.

Here are the top 10 most expensive U.S. states to retire in 2023, according to Bankrate.

Although a state's housing costs can be an important consideration when deciding where to spend your post-work years, retirees should also consider another expense: health care.

As you age, you may become more reliant on health-care services. Relocating to a city or town with lower health-care costs after you retire could help you save money, Kerry Hannon, retirement expert and author of "In Control at 50+: How to Succeed in the New World of Work," tells Bankrate.

Keep other factors in mind as well, such as whether you want to live close to family members and which kinds of activities you would like to be able to access.

"It's a new adventure, and you should really take the time to do the prep work financially and personally so that you make smart decisions," Hannon says in Bankrate's report.

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