Retirees Can Forget Florida, This Affordable Midwest State Offers Lower Costs, Outdoor Fun, And Fewer Crowds

Florida attracts plenty of retirees, but the Sunshine State fails to address a fear expressed by the majority of retirees: running out of money. According to the U.S. Bureau of Economic Analysis (BEA), Florida's 2024 cost of living exceeded the national average by 3.4%. By instead choosing a state with more affordable expenses, retirees can keep more in savings and/or spend more of their dollars on enjoyable activities. Using BEA data, the state of South Dakota has an affordable cost of living at 11.4% less than the national average, or 14.8% more affordable than Florida. 

Another reason to retire in South Dakota is its relatively low population density. Per World Population Review, South Dakota comes in at No. 46 for most populated state, putting it near the bottom for crowd concerns. Although tourists do visit places like Mount Rushmore, the Mammoth Site, and Custer State Park, strategically avoiding these areas during tourist season can give retirees a peaceful life. South Dakota also offers a wide variety of outdoor activities. For example, Hot Springs in southwestern South Dakota offers relaxing thermal spas and access to Angostura Reservoir Recreation Area for biking, swimming, fishing, birdwatching, and boating. Best of all, a resident annual park pass costs just $40.

WalletHub ranked South Dakota as the third-best state to retire in 2026, thanks to many financial factors. The state has no inheritance or estate taxes, along with comparatively low poverty and hunger rates among residents age 65 and older. South Dakota is also one of the states that doesn't charge an income tax. For retirees, this typically means no taxes on retirement income withdrawals — but make sure to always verify your situation with your financial advisor. Plus, sales tax is relatively low: ranking No. 39 with a rate of 4.20%. Property taxes, however, may be higher than what a retiree is used to. These taxes can vary by county and city. Looking at state averages, per Tax-Rates.org, property taxes range from Louisiana's 0.18% to New Jersey's 1.89%, with South Dakota ranking No. 16 with an average of 1.28%. 

Retirees can also save money on grocery costs in South Dakota. Living Cost Index, which uses New York City as a baseline of 100, gives South Dakota a grocery cost index of 76. It also estimates that average monthly food costs are $380 per person monthly in 2026, with a typical range between $220 and $600.