The Best Vs. The Cheapest State To Retire In

The cheapest state to retire in is something that many Americans want or need to think about, as they get older. Once reaching retirement age, should they choose to take that mighty step, a person or couple may not have a regular income being generated anymore, and as such, might need to relocate out of their current home, and into a new place that is more affordable. As this may include crossing state lines, having an understanding as to what makes certain states cheaper than others do and which are actually the cheapest is paramount to making a successful transition.


The Fallacy of State Income Tax Focus

Many people when trying to find the cheapest state to retire in look first at the state income tax to decide how cheap or expensive a state would be to live in. This however is actually not a good idea, as the income tax by itself is not the only thing that can make a state cheap or expensive to retire in.

One must also look at things like sales taxes, fuel taxes, property taxes and especially as for senior citizens medical/dental deductions, and retirement income taxes. For senior citizens, most states give a tax break to people over a certain age, but to qualify, one may have to have a low-level income. All of these factors must be looked at, and taken into account before one can decide what the cheapest state to retire in is.


What are the cheapest states by most standards?

In general, the Midwest and the South are the cheapest places to live in the country. Conversely, the West Coast, New English, Alaska and Hawaii are continually ranked as the most expensive. In terms of the states themselves, the Missouri Economic Research and Information Center lists the following states (#1 to #10) as the most affordable:

1. Oklahoma

2. Texas

3. Tennessee

4. Arkansas

5. Nebraska

6. South Dakota

7. Missouri

8. Kansas

9. Georgia

10. Mississippi


However, according to, the top ten best states to live in (based on living costs in major metropolitan areas, unemployment, climate, tax burden, violent and property crime rate, life expectancy, and tax burden) are:

1. New Hampshire

2. Hawaii

3. South Dakota

4. North Dakota

5. Iowa

6. Virginia

7. Utah

8. Connecticut

9. Vermont

10. Idaho


Although one would think that these two lists would be fairly congruent, the fact of the matter is, the cheapest state to retire in, and the best state to retire in, are simply two different things, and oftentimes having a higher quality of life simply means being willing to pay for it. Such as in the case of Hawaii, this is the one of the most expensive places to retire, but still ranked as #2 as the best place to retire.

Of all the states listed on these two lists however, the only one that is consistent between the two of them is South Dakota, so if in doubt, that may be a good place to consider.


Also, although as a state it made it onto neither the best nor the cheapest state to retire in list, Florida also holds three towns which are among the top 20 places to retire, North Miami Beach, Indian Rocks Beach, and Rotonda, so in considering which state to retire in, it should also be looked into.

Although the best state and the cheapest state to retire in may not be the same place, in searching for either, one should take time and do their homework before deciding to move there. Doing so will not only result in finding a place that matches one of the scales, but hopefully both.


Return to the  Best Cities to Retire In Page

Click here to Return from Cheapest State to Retire In to Cheapest Places to Retire

feed icon