The Cheapest States In The US To Retire

The hardest part of retirement is ensuring you have enough money to live on throughout your golden years. According to a survey conducted by Charles Schwab, the average amount Americans will need for a comfortable retirement is about $1.8 million, and even then, you would need to retire at 65 and rely on no more than 4% per year of what you've saved to make it last. That's the equivalent of $72,000 annually, which is a moderate sum to live out the rest of your days. Planning ahead and factoring in the lifestyle you envision in your golden years can help you figure out where you should end up.

There are several types of living arrangements to consider that may affect where you retire. If rapid access to medical or homecare assistance requires you to consider assisted living or a nursing home as opposed to an individual residence, you'll want to research where those services fall best within your budget. If the taxes for retirees are favorable in the states you're thinking about, that's also a plus. If you're not interested in shoveling snow or slipping on ice in your driveway, the seasonal impact of a specific region could also be a dealbreaker. One thing is certain — while we can't all depend on a platinum pension or golden parachute to cushion retirement, exploring the cheapest states in the U.S. to retire is a surefire way to keep comfort within your means.

If you've ever fantasized about a down-home country existence, sipping sweet tea on the front porch and enjoying Gulf Coast beach living, Alabama is a perfect retirement destination. On a nationwide map of states with corresponding retirement costs, AL.com suggests $536,348 is the amount most need to retire comfortably. That's less than a third of the national average.

Living in a retirement community can be done relatively cheaply for $3,000 to $3,500, while assisted living and nursing homes average anywhere from $3500 to $3600 depending on how much assistance you need. Three of the best locations in Alabama are Mobile, for its assisted living and top-notch nursing homes, Montgomery, for its specialized assisted living communities, and Birmingham, for a more urban experience with affordable retirement homes. You won't get taxed too harshly either since If you're 65 or over, the state collects no taxes on pensions, property, or Social Security benefits, making it a veritable tax haven for retirees.

According to the Alabama Department of Insurance, long-term care insurance and Medicare are both accepted for seniors 65 plus in Alabama. The state's Long-term Care Partnership Program helps protect seniors in need of extra assistance from rising costs typically not covered through Medicaid. Better yet, if you're already set up with a partnership policy in another state before moving to Alabama, that policy may remain valid or be switched out through your insurer with Alabama's partnership policy.

Iowa is a top pick based on affordability, well-being, the cost of healthcare, weather, and crime. Iowa's cost of living for a single-person residence is 73% lower than the national average at $1,512 per month, with an average home cost of $239,000, which is $149,800 less than the national median. While housing, utilities, and transportation cost less, the state system of taxation pushes the cost of healthcare and food 8% to 2% higher respectively. However, your social security is safe from taxation, and the extra cost for healthcare is worth it based on the state's healthcare performance and the availability of one healthcare facility per 274.4 people.

The Des Moines Register points to a growing community of retirement-age citizens, currently representing 13% of the population, who enjoy a $1.9 billion tax cut that includes retirement income and lifestyle benefits — arts, entertainment, low crime, and walkability — as reasons for the high scoring. The average cost of assisted living is around $4,633 per month, while nursing homes run between $7,906 and $7,293 for semi-private and private rooms. Both expenses are just under the U.S. national average of $4,774 for assisted living and $8,390 to $9,584 for nursing homes.

At $291,000, the average median cost of a home in Tennessee is 17% less than the national average. It makes a lot of sense that local hubs including Johnson City boasts a 60-plus community of seniors who make up 27% of its population. Everything in Tennessee, including the cost of food and healthcare, is 10% lower than the national average. Like most of the states on our list, the tax system in Tennessee is extremely favorable toward retirees since social security and pensions are free from taxation. There are no income taxes on the state level, with cheap property taxes floating between 0.40% to 0.56%.

Living in a nursing home in Tennessee can cost between $69,350 to $76,000 per year — roughly $5,779 to $6,333 — beating the median average by as much as $2,000 to $3,000. Meanwhile, the cost of assisted living can stretch anywhere from $2,775 to $4,728 on the higher end per month. The median cost of assisted living in the U.S. is $3,863 a month, which means you can pay as much as $1,000 less or $1,000 more than the national average depending on what region in Tennessee you settle in.

Nebraska is an easy place to retire for those seeking a cost of living that dips below the national average. Housing here follows the same pattern as healthcare since there are as many regions in Nebraska above the national average as below it. Norfolk, Hastings, Fremont, Kearney, and Grand Island are your best bets for cheaper housing, especially since you may be required to have a downpayment of 15% to %20 to buy one. One caveat to consider, as per the Nebraska Examiner, is that new construction homes are surging in price due to newer building regulations raising the cost of construction on homes, which in turn gets passed on to homeowners. As a result, it's near-impossible to find homes for less than $300,000 in some areas like the capital, Omaha. Still, the state is easy to settle into and has a major airport, with the convenience that most of its bigger cities lie along the I-80 corridor.

South Dakota boasts housing, utility, clothing, and grocery costs that fall between 7% to 10% lower than most U.S. states. Some areas in the state, like Sioux Falls, have rates even 12% to 17% lower than the national average. No income tax, no state or sales tax on your prescriptions — including medical devices — and no sales tax on groceries make this a tax-friendly state for seniors on a budget.

According to Zillow, the cost of the average home in South Dakota hit $295,881 with home prices as low as $164,716 in Blunt, South Dakota. Renting provides another opportunity for major savings, with the average single-occupancy renter paying $1,023 per month against a national average of $1,600 per month. The average South Dakotan pays just $482 a year in state and federal taxes, including social security, and Medicare, while the national median is $6,542. If you're a business owner, you might also be pleased to learn that there's also no corporate income tax or gross receipt taxes.

Healthcare in the form of assisted living costs $3,638 on average, far below the national average. Programs like the Personal Care Services Program and the Home & Community Based Waiver Services for the Elderly (HOPE) help subsidize the costs of nursing homes and assisted living for retirees with monthly incomes of $2,382 or less.

Although Ohio's median home cost is $220,000, homes in other regions like Cleveland sell for as little as $120,000. The state does tax some retirement income but offsets those taxes with credits. Retirees over the age of 65 can claim $50 per year or a lump sum payment based on adjusted gross income without exemptions as long as it totals less than $100,000.

The cost of living in Ohio is 27.8% below the national average. Assisted living, nursing homes, memory care, and homecare are all widely available in the state. The precise cost varies from place to place but nursing homes in Ohio are the most costly form of assistance at $6,631 to $9,353 per month. Meanwhile, assisted living can be had for as little as $1,333 per month depending on where you live. If you required memory care, that would add an extra $1,000 or more to your bill. Still, all things considered, these costs can come out to less than most states in the nation.

Georgia's cost of living was $43,482 in 2022, with residents spending $7,495 on housing, $6,595 on healthcare, and $24,481 on everything else. The average home runs about $301,978 with rents for up to five bedrooms falling between $1,084 and $1,957. Groceries and eating out are estimated to be $308 per person every month with a moderate tax rate of 5.75%. Statesboro, Augusta, and Dublin are listed as the three most affordable places to live in Georgia.

The average cost of assisted living is $3,535 monthly and goes up as high as $4,184, which is still much lower than the national average. Nursing homes are generally more expensive everywhere in the U.S. but in comparison to the national average of $7,011 for semiprivate and 9.034 for private rooms, Georgia's nursing homes aren't more expensive nor significantly cheaper.

Georgia also provides tremendous tax breaks for seniors, even though it does tax pensions and 401(k)s. If you're 62 to 64 years of age, you're eligible to have up to $35,000 in retirement income excluded from your tax burden, and up to $65,000 once you turn 65. You'll also be glad for the annual tax break on your vehicle which will require a $20 registration fee every year after year one.

Mississippi is the most affordable place to retire in the U.S. The average cost of living sits around $49,723 without any high-end additions. Adding a buffer rate of 20% brings the annual cost of living to $62,154. That's around $2,819 less per year after a 20% buffer than the next lowest, Missouri, which has an average cost of living of $64,973. Medicaid can knock several thousand dollars per year off that cost. $505,346 is a comfortable amount of retirement savings needed to retire in Mississippi. When compared with the national average of $1.8 million, that's about $1.2 million in savings.

According to the Mississippi Development Authority, along with the enviable 14% lower cost of living, there are also 14 certified retirement communities which will ensure you both an affordable retirement and lots of company to enjoy your retirement savings with. The cost of assisted living aligns with the generally lower cost of living in the state at $2,500 to $5,000 per month. Medicaid won't cover the cost of your room and board but will help cover a few services related to assisted living care, and programs like the home and community-based services (HCBS) long-term care waiver, assisted living waiver, and elderly and disabled waiver offer further financial support for healthcare costs not entirely covered by Medicaid.