New Jersey seems an ideal place with its sandy beaches, sunny boardwalks and favorable restaurants. The reason it is on this list however is that the state has high taxes and a cost of living which may be a burden for retirees. The price of housing has climbed over the years, and rent isn't cheap either. The tax burden is heavy and residents have to report annuities, pensions, and some IRA withdrawals during the tax year. Besides all this, the state sales tax is high, which means a higher price for food, furniture and car repairs.