Most Affordable States to Retire

The 10 Most Affordable States for Retirement

Jody D’Agostini, a certified financial planner based in New Jersey, has witnessed the pull of affordability on retirees firsthand. “Increasingly, the conversations with retirees include whether they should consider a move from New Jersey, where I reside, to a more tax-friendly state in retirement,” D’Agostini said. “This move could help maximize their retirement income and lower their tax burden.”

Concerned about how much you need to save to retire in your state? Keep reading to discover the top 10 most affordable states for retirement—and how they got that way.

1. West Virginia

West Virginia rose a whopping 17 spots in the rankings from 2025 to 2026, scoring first in both the housing cost and cost of living categories. It has a median monthly rent of $643 for a one-bedroom apartment, and monthly grocery spend per capita is only $205 (both are the lowest in the U.S.).

West Virginia also ranked second on our list of the best states for retirement in 2025, which noted that seniors only need $303,199 in savings to retire there. That’s the lowest in the nation—and a pretty remarkable stat, considering retirees need $574,000 to retire in Wyoming, the list’s top-ranked state.

2. Mississippi

Mississippi maintained its No. 2 ranking for affordability for another year. The Magnolia State ranks strongly for low housing costs—the median home sale price in March 2026 was $260,430, the third lowest in the nation—and it ranks fourth lowest for cost of living. Gas, groceries, and average Medicare Advantage premiums are all within reach for retirees in Mississippi. 

Like West Virginia, Mississippi also ranked in the top 10 best states for retirement. It placed eighth on the list, largely due to its affordability. 

3.  Alabama

Retirees can sing “Sweet Home Alabama” with pride thanks to its ranking as the third-most affordable U.S. state for retirement in 2026. Not only does Alabama boast low costs of living, ranking right behind Mississippi in that category, but it also ranks eighth for tax-friendliness. Like all of our top 10 states, Alabama doesn’t tax Social Security—but on top of that, its effective property tax rate is only 0.37%. That’s the second-lowest property tax in the nation. 

4. Oklahoma

Oklahoma is another affordable state for retirees looking to save money in their golden years. The state rose six spots from last year’s ranking due to affordable housing and low costs of living.

And as of April 2026, Oklahoma is taking steps to become even more affordable. House Bill 4072 was recently signed into law, creating the Oklahoma Taxpayer Endowment Trust Fund.  It’s designed to eventually eliminate the need for state income tax, which has a maximum rate of 4.75%.

5.  Arkansas

Though it dropped four spots from last year, Arkansas still retained a place in 2026’s ranking of the 10 most affordable states for retirement. It boasts the lowest maximum state income tax rate among our top five states, at 3.9%. Plus, average monthly Medicare Advantage premiums are only $2.28, the fourth lowest in the nation.

6. Kentucky

Retirees who are fans of bourbon, horse racing, or bluegrass will be happy to know that Kentucky ranks as one of the most affordable states for retirement. Relatively low housing costs (the state ranks seventh overall) and a low cost of living (ranking 10th) make Kentucky a solid choice for those looking for both affordability and fun.

7. Missouri

As in Kentucky, some Missouri residents argue about whether their state is located in the Midwest or the South. (It’s officially part of the Midwest, while Kentucky is in the South, according to the U.S. Census Bureau.) Also like Kentucky, Missouri appears on our list due to its low housing costs (ranking eighth overall) and low cost of living (ranking seventh). The state’s tax-friendliness, though, leaves something to be desired. A 4.7% maximum state income tax rate and a 0.89% effective property tax rate are among the highest on our top 10 list.

8. Louisiana

Louisiana is a new addition to the top 10 most affordable states to retire in, rising four spots from last year. The home of major cities like New Orleans and Baton Rouge, Louisiana has low housing costs (the median home sale price is $254,541, second-lowest in the U.S.) and low tax rates (maximum state income tax is 3%, and the effective property tax rate is 0.55%). Geaux, Tigers!

9. Indiana

We may never know what a Hoosier is, but we do know that Indiana ranks ninth on our list of most affordable states to retire to. Indiana residents pay a 3% maximum state income tax, a 0.76% effective property tax rate, and relatively low home prices. The median home sale price in the state for March 2026 was $269,504, eighth lowest in the U.S.

10. Kansas

Leaving Oz returned Dorothy to Aunt Em, Uncle Henry, the family farm—and a great state for retirement. The Sunflower State is surprisingly affordable, with the median rent for a one-bedroom apartment coming in 10th lowest, at $861. Kansas also ranks second for low cost of living, with monthly grocery spend per capita ($228) the second-lowest among our top 10 states.

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What Are the Most Expensive States for Retirees?

What about the other side of the coin? Quesada, the San Diego real estate agent, told Retirement Living about the trends she’s witnessed locally in the most expensive state for retirees in the nation. “We continue to see retirees evaluate affordability differently depending on their priorities. Some are seeking lower-cost markets entirely,” Quesada said.

But what about those who don’t want—or can’t afford—to start over? There are still ways to save money while staying in your home state. “Some retirees are also downsizing, relocating within the region, or using equity from longtime homeownership to help offset costs,” Quesada said.

Below are the 10 U.S. states that are the most expensive for retirees. 

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See Where Your State Ranks

Not every state can make the 10 best—or worst rankings. What about the gems hidden in the middle of our list? You don’t want to miss Nevada, for instance. Though the Silver State has higher cost of living expenses than many other states, it does rank first for tax-friendliness. That’s largely because Nevada doesn’t collect taxes on income or Social Security, which can save residents a lot of money. 

That’s a great reminder to not judge a state by its tax rate and housing costs alone (though those are certainly important factors). “When considering a move, you need to look at the ‘all-in’ number,” D’Agostini explained. That’s not only “sales taxes imposed, property taxes, or additional fees,” but also “the cost of housing, medical care, food, entertainment, and recreation in the area.” 

Curious where your state lands? Check out the full data in the table below.

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Why Affordability Matters for Retirees

Retirement is a time in life when affordability matters more than ever. As many retirees are operating on a fixed income, expenses can actually go up. Fidelity Investments found that the average 65-year-old retiring in 2025 could expect to spend about $172,000 on healthcare-related costs over the course of their retirement. It’s no wonder that people taking stock of the state of retirement are considering moving to a more affordable state.

No matter what you decide, just remember: You’re not the only one going through it. “Change is difficult at any age, but uprooting from a place where you have worked and raised a family can be most challenging,” D’Agostini, the New Jersey financial planner, said. “You will have to be more intentional about creating new connections. … You will eventually find ‘your people,’ but you will have to put yourself out there.”

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Methodology

Retirement Living ranked all 50 states to determine the most affordable places to retire using a scoring system based on three categories:

Housing costs (35 points): This category includes median monthly rent for a one-bedroom home (17.5 points) and median home sale price (17.5 points). Data is from the U.S. Census Bureau (2024) and Redfin (March 2026).

Living costs (35 points): This category includes monthly grocery (food at home) spending per capita (11.7 points), the average price per gallon of regular gas as of May 12, 2026, (11.7 points), and the average Medicare Advantage monthly premium (11.7 points). Data is from the U.S. Department of Agriculture (2026), AAA, and the Centers for Medicare & Medicaid Services (2026). 

• Alaska was assigned a neutral score for the Medicare Advantage metric because Medicare Advantage plans are not currently available in the state. To avoid unfairly penalizing or awarding Alaska in the rankings, the state received a midpoint score equal to half of the total possible points for that metric.

Tax-friendliness (30 points): This category includes whether Social Security benefits are taxed by the state (10 points), the top marginal state income tax rate (10 points), and the effective property tax rate (10 points). Data is from SSA.tools (2026) and the Tax Foundation (2025 to 2026).

Each state received a score for every metric, with the top-performing state earning the maximum number of points, and others scored relative to that state. We summed the individual scores to calculate category totals, then combined category scores for a final score out of 100 points.

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Reference Policy

We love it when people share our findings! If you do, please link back to our original article to credit our research.

Questions?

For questions about the data or if you’d like to set up an interview, please contact [email protected].

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Article Sources

Retirement Living writers primarily rely on government data, industry experts, and original research from other reputable publications to inform their work. Specific sources for this article include:

1. U.S. Census Bureau, “Median Gross Rent by Bedrooms.” Accessed May 26, 2026.
2. Redfin, “Housing Market Data.” Accessed May 26, 2026.
3. U.S. Department of Agriculture, “Food Expenditure Series.” Accessed May 26, 2026.
4. AAA, “State Gas Price Averages.” Accessed May 26, 2026.
5. Centers for Medicare & Medicaid Services, “Fact Sheet.” Accessed May 26, 2026.
6. SSA.tools, “State Taxes on Social Security Benefits.” Accessed May 26, 2026.
7. Tax Foundation, “State Income Tax.” Accessed May 26, 2026.
8. Tax Foundation, “Property Taxes by State and County, 2026.” Accessed May 26, 2026.
9. Fidelity Investments, “Fidelity Investments Releases 2025 Retiree Health Care Cost Estimate.” Accessed May 26, 2026.
10. State of Oklahoma, “Governor Stitt Signs Bill to Accelerate Path to Zero Income Tax, Secure Oklahoma’s Historic Savings.” Accessed May 26, 2026.