How to Determine Which States Have the Lowest Cost of Living for Retirees

A retiree who is retiring on a limited budget should determine which states have the lowest cost of living for retirees.

By retiring in a state with a low cost of living and light tax burden, one can save hundreds or even thousands of dollars a year.

Following are some things to consider when looking for a cheap place to retire.



A state’s tax burden will have a direct effect on how much money one can save. The tax burden varies by state, but a person’s source of income and whether or not he or she owns property also have a large bearing on the amount of taxes one will have to pay.

Alaska has the lowest tax burden, according to This state charges an average of 6.40% of a person’s income. This same website lists New Hampshire in second place with a low tax rate of 7.40%; Delaware comes in third with a tax rate of 8%. However, most northern states have a high cost of living in general, so they are not affordable retirement destinations.

Generally speaking, southern states are cheaper to live in than northern states. Of the southern states, the two states with the lowest tax burden are Tennessee and Alabama. According to, Tennessee has a relatively low tax rate of 8.30% while Alabama’s tax rate comes to an average of 8.70% of one’s income.


Cost of Living

It has been established by that the average retiree spends $2,758 a month, excluding rent/mortgage payments. This is a national average and the figure varies wildly depending on where one lives. Following are the two cheapest states to live in. This information has been determined after researching various statistical websites listed below.



Alabama is the cheapest state to retire to in the United States. According to, an average retiree can expect to spend $2,199 a month, excluding rent/mortgage/taxes. CNN lists Alabama has having the fifth lowest tax burden of all the states in the U.S.

The cost of renting an apartment in Alabama depends on which city one retires in. According to, one can rent a one bedroom apartment in Huntsville (outside the city center) for as little as $300 a month. Montgomery is another good city to live in; a one bedroom apartment outside of Montgomery’s city center can be rented for only $500 a month. The cost of buying an apartment in either of the above mentioned two cities comes to about $807 per square meter.

On the other hand, Birmingham and Mobile apartment rents are quite high, at $700 and $900 respectively. A retiree buying an apartment in either Birmingham or Mobile can expect to spend well over $1,000 per square meter. ( has determined the above information by conducting a survey of people who live in the above mentioned cities)



According to, an average retiree in Georgia spends $2,147 a month. This southern state actually has a slightly lower cost of living than Alabama. However, Georgia has a tax burden of 9.80%, versus Alabama’s tax rate of only 8.30%. The cost of housing in Georgia is also higher than in Alabama.

The cost of renting an apartment in a large city such as Atlanta or Savannah comes to between $750 and $900 a month, according to surveys conducted by On the other hand, Gainesville offers single bedroom apartments for rent in the range of $615 to $805, depending on which part of town one wishes to live in.

However, these small cities do not offer cheap apartments for sale. A retiree who wants to purchase an apartment at a low price should consider living in Atlanta, where apartments can be bought for $888 per square meter.

A retiree who wants to live frugally should move to a state with a low cost of living. It just makes sense to live in a state where housing, utilities, taxes and other expenses are relatively low. Extensive research has shown that Alabama is the cheapest place to live, followed by Georgia. By living in one of the cheapest places in the United States, one can not only save a considerable amount of money but also live comfortably on less and better enjoy retirement.


Continue on with  our Free  Newsletter Topics

Topic  1 – How to Easily Calculate your Retirement Income in Five Simple Steps

Topic 2 – How to Determine Which States Have the Lowest Cost of Living for Retirees

Topic 3 – How Does Living Abroad Compare to Living at Home – Tips on Comparing Costs

Topic 4 – How to Cut Costs to Make Your Cost of Living Lower and Stretch Your Dollars – Tips

Topic 5 – How to Know Which States Have the Lowest Taxes that Affects Retirees

Topic 6 – What are the Top 3 Cities Recommended for Retiring Cheaply in the US

Topic 7 – Where Can You Find a Great Deal on a House – Tips, Advice,  and Options

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