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When it’s finally time to relax and enjoy your Golden Years, the last thing you want to be worried about is your finances. Unfortunately, struggling to live on fixed income is the challenging reality for many retirees, especially as the cost of housing, healthcare, and everyday essentials continues to rise.
The solution? For many seniors facing food insecurity, prohibitive healthcare costs, and other challenges, finding a more affordable place to live is the key to a happy and healthy retirement.
Key Insights
Arkansas is the most affordable state to retire to, offering the lowest median rent ($722) and a relatively low median home sale price ($255,000).
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Iowa stands out for its low cost of living, offering the cheapest groceries ($166.22) and an affordable Medicare Advantage plan ($13.84).
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The South dominates the rankings, with three states—Arkansas, Mississippi, and Alabama—making the top five for affordability.
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California ranks as the worst state to retire to, with the highest median rent ($1,709) and median home sale price ($833,000).
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To determine the most affordable states for retirees, the Retirement Living Research Team analyzed housing costs, living expenses, and tax friendliness across all 50 states. This included evaluating median rent and home prices, grocery and gas costs, Medicare expenses, and taxes. Read on to see which states can help you achieve a financially-stable retirement.
The 10 Most Affordable States for Retirement
Between 2022 and 2023, the number of retirees moving to a new home jumped by 44%. While moving trends slowed through 2024, many older Americans are still looking for the perfect place to enjoy their Golden Years.1
From concerns over the cost of living and housing to the taxes you can expect to pay, we’ve compiled the top 10 most affordable states for retirees. Read on to discover which state is right for you based on your personal criteria.
1. Arkansas
Arkansas’ combination of affordable housing and a low cost of living allowed it to rank as the most affordable state for retirees. It offers the lowest median rent price ($722) and the eighth-lowest median home sale price ($255,000) in the nation, making it easy for seniors to find a place to live. The Natural State also offers a highly affordable cost of living, with the fifth-least expensive Medicare Advantage plans ($7.74) and the eighth-lowest cost per gallon of gas ($2.75).
Arkansas is also fairly tax friendly, with property taxes being especially affordable (0.57%). Income taxes are more of a cost consideration, but still less than half that of the top 10 most expensive states. Overall, taxes in Arkansas are more affordable than many other options.
2. Mississippi
As the second-most affordable state for retirees, Mississippi earned its position through affordable housing and a low cost of living. Rent prices here are the second-lowest in the country ($759), while the median home sale price ($253,000) is the seventh-lowest. The Magnolia State also shines for its affordable cost of living, offering the lowest cost-of-living-index (85.3) and most affordable gas prices in the nation ($2.65).2
Mississippi’s taxes rank among the top 20 for affordability as well. The property tax rate of 0.74% is at least half that of 15 states, while the state income tax is just slightly higher than Arkansas (4.70%).3
3. Alabama
If you’re on the hunt for tax-friendly living, look no further than Alabama. In part, the Heart of Dixie earned its spot as the third-most affordable state for retirees by having the second-lowest property tax rate (0.38%) in the country.3
Aside from Alabama’s taxes, the state also offers a relatively affordable cost of living and housing. Take advantage of the 12th lowest median rent prices ($807) and the 14th lowest median home sale prices ($283,000). Similarly, Alabama offers a below-average cost of living, with the median cost of gas per gallon being the seventh-lowest in the country ($2.74).
4. Indiana
Balanced rankings in all three categories allowed Indiana to rank as the fourth-most affordable state for retirees. The state ranks 10th for overall housing costs, offering a median rent price of $845 and a median home sale price of $255,000. Similarly, the Hoosier State ranks 12th for its cost of living, offsetting moderate Medicare Advantage plan costs ($18.55) with the fourth-lowest cost of groceries ($181.79).
Indiana’s taxes earn it the 11th spot on our list. The property tax rate of 0.74% and the state income tax rate of 3.05% are both less than average, making it easier for retirees to conserve their often limited incomes.3
5. Iowa
With the second-best affordable housing ranking — behind only West Virginia — Iowa is one of the best states for seniors worried about where they’re going to live. The median rent price here is the fifth-lowest in the nation ($750), while the median home sale price earns the No. 1 spot for affordability ($228,000). According to our data, The Hawkeye State also offers the lowest cost of living. In particular, the cost of groceries is the second-lowest in the country ($166.22).
Iowa’s taxes are the primary factor holding the state back, as the property tax rate of 1.43% and the income tax rate of 5.7% are the highest rates among our top 10 list. However, do keep in mind that these taxes are lower than what you could expect in New York or Illinois.3
6. Missouri
Another balanced state that earned high marks for both an affordable cost of living and affordable housing, Missouri ranks as the sixth-most affordable state for retirees. It ranks 9th for overall housing costs, offering a median rent price of $835 and a median home sale price of $258,000. Likewise, the Show-me State also ranks seventh for its cost of living, offering the 12th least expensive Medicare Advantage plans ($12.69) and the 10th lowest price of gas per gallon ($2.80).
Taxes in Missouri are neither low nor high, with a property tax rate of 0.88% and a state income tax rate of 4.80%. This makes the Show-me State’s taxes affordable than many others, but as affordable, not most of the other states on our top 10 list.3
7. Kentucky
Kentucky earned its ranking as the seventh-most affordable state for retirees through inexpensive housing and a tax-friendly environment. It ranks seventh for housing, with a median rent cost of $773 and a median home sale price of $264,000. The Bluegrass State also offers the 14th lowest taxes — a 0.77% property tax and 4% state income tax — making it even easier to afford your home.
As far as the cost of living is concerned, Kentucky ranks 25th on our list. While the average per gallon cost of gas is the third-lowest in the country ($2.68), expensive groceries largely offset this benefit ($232.95).
8. Ohio
Primarily earning its spot by having the fifth-lowest cost of housing, Ohio is a great destination for retirees who don’t mind the cold. It offers the second-lowest median home sale price on our list ($242,000). The Buckeye State also offers the 14th lowest cost of living, primarily for its relatively affordable gas prices ($2.88 per gallon) and Medicare Advantage plans ($15.51).
Taxes in Ohio are fairly middle-of-the-road, ranking 26th overall. The property tax rate here is 1.36%, while the state income tax is a below-average 3.5%.
9. Tennessee
If taxes are your main concern, Tennessee’s tax-friendly environment allowed it to rank second in that category — the highest ranking among our top 10. Tennessee has no income tax, as well as the 11th lowest property tax rate in the country (0.55%).
While Tennessee has the least affordable housing among the top 10, the median rent price of $997 and the median home sale price of $381,000 are still considerably less than what you could expect to pay in other popular states like Florida or Arizona. The Volunteer State also ranks 14th for its living costs, primarily due to a low cost of gas per gallon ($2.70).
10. Oklahoma
Oklahoma’s affordable housing allowed it to earn the final spot on our list. Overall, the state ranks sixth, offering a median rent price of $801 and a median home sale price of $244,000 — the third-lowest home sale prices in the country. While the Sooner State’s expensive groceries somewhat offset its otherwise low cost of living, the price of gas per gallon here is the second-lowest in the nation ($2.67).
Taxes in Oklahoma are lower than average but moderate in comparison to our top 10 list. The state income tax rate is 4.75%, while the property tax rate is 0.82%.
See Where Your State Ranks
The table below ranks the 50 states based on how affordable they are for retirees. Our three key ranking categories include: housing costs, living costs, and tax friendliness. While our analysis weighted each category based on a 30 to 35-point system, we encourage you to consider your own financial priorities while you use this data to determine where you should relocate.
Why Affordability Matters for Retirees
Did you know that 65% of retirees derive the majority of their income from Social Security, but the average monthly benefit as of January 2025 is only $1,976 ($23,712 annually)? This places the majority of American seniors in financially-treacherous territory, and highlights the importance of seeking out affordable retirement destinations.4,5
After all, aside from affordable housing, living, and taxes, many retirement-friendly states implement programs that can further offset expenses for older Americans. For instance, Arkansas’ affordable Medicare Advantage plans make it easier to tackle the ever-more common doctor’s visits as you age.
If you’re not sure how to determine which financial factors impact you the most, we recommend seeking assistance from financial advisors near you.
Methodology
To help older Americans determine the most affordable states to retire, the Retirement Living Research Team compared all U.S. states across three weighted categories equaling 100 points.
- Housing Costs (35 points): Median rent (U.S. Census) and median home sale price (Redfin, Feb 2025).
- Living Costs (35 points): Grocery prices (U.S. Census), gas prices (AAA), and Medicare Advantage costs (CMS).
- Tax Friendliness (30 points): State and local tax data (Tax Foundation).
Reference Policy
We love it when people share our findings! If you do, please link back to our original article to credit our research.
Sources
1“Current Population Survey (CPS).” United States Census Bureau. Evaluated Apr. 1, 2025.
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2“Cost of Living Index by State 2024.” World Population Review. Evaluated Apr. 1, 2025.
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3“Economy at a Glance.” U.S. Bureau of Labor Statistics. Evaluated Apr. 1, 2025.
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4“Housing Affordability and Security Issues Facing Older Adults in the United States.” National Library of Medicine. Evaluated Apr. 2, 2025.
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5“What is the average monthly benefit for a retired worker?” Social Security. Evaluated Apr. 2, 2025.
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6“United States.” United States Census Bureau. Evaluated Apr. 2, 2025.
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7“United States Housing Market.” Redfin. Evaluated Apr. 2, 2025.
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8“National Average Gas Prices from March 19.” AAA. Evaluated Apr. 2, 2025.
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9“Fact Sheet.” Centers for Medicare and Medicaid Services. Evaluated Apr. 2, 2025.
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10“Property Taxes by State and County, 2023.” Tax Foundation. Evaluated Apr. 2, 2025.
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