{"id":599517,"date":"2026-04-22T12:06:29","date_gmt":"2026-04-22T12:06:29","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/599517\/"},"modified":"2026-04-22T12:06:29","modified_gmt":"2026-04-22T12:06:29","slug":"the-7-most-affordable-states-for-retirees-in-2026","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/599517\/","title":{"rendered":"The 7 Most Affordable States for Retirees in 2026"},"content":{"rendered":"

Editor’s Note: This story originally appeared on The Penny Hoarder<\/a>.<\/p>\n

There are a lot of factors to consider when deciding where to settle down in retirement. Maybe you want to be close to family, find a beachside paradise or be within walking distance of a scenic golf course.<\/p>\n

No matter\u00a0your retirement dreams, we think you should also consider the financial ramifications of your move. That\u2019s why we put together a list of the best states for retirement for 2026.<\/p>\n

How We Chose the Best States for Retirement<\/p>\n

States\u2019 benefits for retirees can vary widely, which can make a big difference in how long your savings last. We studied the numbers and compiled a list of the best states for each financial consideration to help you decide where you want to spend your golden years.<\/p>\n

You can skip to the end to see our overall financial winners, but first, here\u2019s what you should consider before you move.<\/p>\n

Taxes<\/p>\n

Taxes have a big impact on the longevity of your retirement savings. With considerations for income taxes and property taxes, you\u2019ll want to examine if where you want to move will protect your investment.<\/p>\n

First off, if you\u2019re wondering if you pay taxes on retirement income, the answer is yes. According to the IRS<\/a>, most retirement accounts count as taxable income.<\/p>\n

This includes, but is not limited to, military retirement pay, pensions, IRAs,\u00a0401(k) withdrawals\u00a0and unemployment benefits. This income will be taxed federally just like when you were employed and is subject to the same tax brackets as regular earned income.<\/p>\n

Social Security is also taxed on the federal level depending on your income, but with a different formula than other retirement income.\u00a0Depending on your income, you\u2019ll pay taxes on up to 85% of your Social Security benefits.<\/p>\n

Basically, if you\u2019re living purely on your Social Security, you\u2019ll probably avoid paying too much in taxes, but if you have additional retirement income, you\u2019ll need to plan on paying the federal government some.<\/p>\n

The One Big Beautiful Bill also changed tax deductions<\/a> for most Americans, including seniors. People over the age of 65 can now claim an additional tax deduction of up to $6,000 per person.<\/p>\n

This temporary deduction (ending 2028) will be added to any other deductions that you\u2019re already claiming. Like always, a deduction doesn\u2019t change whether something is taxed, but it does lower your overall taxable income.<\/p>\n

So in short, everyone pays federal income taxes on retirement withdrawals, but state income taxes are not as simple. Depending on each state\u2019s laws, your tax payments will vary greatly.<\/p>\n

For example, you\u2019ll pay nothing on your annual retirement income to the state of Texas. But depending on how much you withdraw, you could be responsible to pay up to 13.30% of that same income in California in taxes.<\/p>\n

If your goal is to pay nothing in taxes on your retirement income, following is the list of states that have no income tax.<\/p>\n

States With No Income Tax<\/p>\n

Alaska
\nFlorida
\nNevada
\nNew Hampshire
\nSouth Dakota
\nTennessee
\nTexas
\nWashington
\nWyoming<\/p>\n

Of course, there are often other costs to consider when moving to some of these no-income tax states. Many of these states have high property taxes to recoup revenue forgone by not taxing income. They may have high costs of living or other non-financial \u201ccosts\u201d like long winters and isolation (we\u2019re talking about you, Alaska).<\/p>\n

Still, if somewhere on the list floats your boat, then the lack of income tax can be a real boon.<\/p>\n

If the state you\u2019re considering is not on the no-income tax list, it isn\u2019t hopeless: you\u2019ll just want to be informed. There are many states that are labeled \u201cretirement friendly\u201d even with state income tax.<\/p>\n

Just be sure to check things like taxes on Social Security benefits, any deductions for retirement income or required inheritance or estate taxes. Plus, you\u2019ll want to check other tax ramifications like property tax and sales taxes in order to make an informed decision on how taxes will affect your retirement.<\/p>\n

Cost of Living<\/p>\n

The other financial consideration in our list of best states for retirement is the overall cost of living.\u00a0 You\u2019ll notice tax friendly doesn\u2019t always mean financially friendly. In fact, some of our more tax friendly states have issues with affordability.<\/p>\n

States have vastly different costs when it comes to housing, groceries, health care and transportation, and these differences can really stunt or stretch your budget.<\/p>\n

Cost of living will vary from city to city, but the Missouri Economic Research and Information Center gathered information from many of these cities to create an average cost of living index for each state.<\/p>\n

This data takes into account everything from daily expenses like\u00a0groceries<\/a>\u00a0and transportation to large costs like health care and housing to create an idea of which state has the most affordable living and which does not.<\/p>\n

Best States for Cost of Living<\/p>\n

Oklahoma
\nMississippi
\nWest Virginia
\nAlabama
\nKansas
\nMissouri
\nIowa
\nArkansas
\nTennessee
\nIndiana<\/p>\n

Cost of living reflects the 2025 data gathered by the Missouri Economic Research and Information Center<\/a> through voluntary surveys from cities throughout the U.S.<\/p>\n

Overall, the most affordable states are found in the Midwest or South.\u00a0The more expensive states are in the Northwest and Northeast. It probably comes as no surprise Hawaii and Alaska have some of the highest cost of living overall.<\/p>\n

Again, just because your desired state isn\u2019t on this list doesn\u2019t mean it\u2019s a no-go. It just means you might have to save more now or budget more later.<\/p>\n

The Best States for Retirement: Our Results<\/p>\n

Retirement taxes and\u00a0cost of living\u00a0are two great metrics to start your retirement dream hunting. However, it can sometimes feel overwhelming looking at the data alone.<\/p>\n

We looked at the above metrics and more to find what we consider the five most retirement friendly states for your wallet.<\/p>\n

1. Mississippi<\/p>\n

Mississippi earns a spot on our retirement-friendly list because it has one of the most retirement-friendly tax policies of all the states. While you do pay state income taxes on income in general, Mississippi does not collect taxes on Social Security, pensions, IRAs or 401(k) withdrawals \u2014 effectively making your retirement income tax-free.<\/p>\n

It also has low housing costs and property taxes, earning its No. 2 ranking of states with the most affordable cost of living in the U.S. In addition, Mississippi is a good place for your heirs because there is no estate or inheritance tax.<\/p>\n

Be warned, Mississippi does have rather high sales taxes, so it isn\u2019t financially perfect, but we think overall it\u2019s pretty close to a home run.<\/p>\n

2. Arkansas<\/p>\n

The state\u2019s low cost of living makes it one of the best states for retirement. It\u2019s ranked in the top states for affordability and consistently comes out in the top 10 when it comes to housing, groceries and transportation savings.<\/p>\n

Arkansas also offers no taxes on Social Security, low property taxes and relatively low state income tax. It\u2019s not a tax-free state, but it is tax friendly.<\/p>\n

Retirees can claim a $6,000 deduction on retirement income ($12,000 for those filing jointly) each year. Other states do offer better deductions for seniors, but the cost of living does allow you to stretch your retirement savings a long way.<\/p>\n

3. Tennessee<\/p>\n

Tennessee offers retirees no state income taxes to speak of. No matter how you\u2019re preparing for retirement, you won\u2019t be taxed when you pull out your savings. It also has low property taxes and low housing costs.<\/p>\n

It moved into 9th place for cost of living this year, so Tennessee is an affordable place to buy a home, grocery shop and savor some of the finer things in life.<\/p>\n

4. Wyoming<\/p>\n

Wyoming might feel like a cold choice for retirement, but living there can make your savings last. First off, Wyoming has no state income tax, so you won\u2019t pay state taxes on your retirement funds. It also has relatively low housing costs and property taxes \u2014 especially for a \u201cno income tax\u201d state \u2014 making home ownership a real possibility for those on a fixed income.<\/p>\n

It is worth noting that health care can be more expensive and not easily accessible, so if you have specific health concerns, you might want to look at the other options on our list.<\/p>\n

5. Georgia<\/p>\n

Georgia is a little lower on our cost of living list, but still holds its own by ranking just outside the top 15. It has no Social Security tax or estate or inheritance taxes. While sales taxes are high, groceries are exempt from it, and property taxes are low. Combined with the overall low house prices, it\u2019s pretty affordable overall.<\/p>\n

As an added bonus, people over the age of 65 can deduct as much as $65,000 in retirement income per person on their state taxes (if you\u2019re 62 to 64, that deduction falls to $35,000). It doesn\u2019t quite make it as nice as no state income tax, but it does help make Georgia more affordable.<\/p>\n

Honorable Mentions<\/p>\n

Turns out, we couldn\u2019t limit ourselves to just five. Here are some honorable mentions.<\/p>\n

Oklahoma<\/p>\n

Oklahoma is considered tax-friendly toward retirees with no Social Security income tax and only partially taxing withdrawals from retirement accounts. Plus, what you are taxed might not be that much.<\/p>\n

Oklahoma\u2019s state income tax begins at just .25% and only goes as high as 4.75%.<\/p>\n

It also ranks well in cost of living, stealing the top spot overall. Plus, Oklahoma doesn\u2019t tax inheritances and provides a $10,000 deduction at tax time toward other types of retirement income.<\/p>\n

Like other Midwest states, the sales tax is a little high, but the low property prices help to offset that hit. Oklahoma has seen rising insurance costs \u2014 some of the highest in the nation \u2014 which is why it only makes our honorable mention lists.<\/p>\n

Florida<\/p>\n

We couldn\u2019t have a retirement list without Florida. It offers warm sunny days, no state income tax, and no state estate or inheritance tax. Its cost of living is high, especially the housing in coastal areas.<\/p>\n

It still might be a great choice, you just might have to live a little more inland than you expected.<\/p>\n

Are You Ready to Go?<\/p>\n

We found our winners when it comes to retirement savings, but don\u2019t panic if your favorite destination isn\u2019t on the list. While finances are important, there are a lot of factors that\u2019ll go into choosing the best state for you. We simply think any choice should be a financially informed one.<\/p>\n

In fact, if the state you\u2019re considering is a little more expensive, you can still have an\u00a0awesome retirement. Above all, we hope you can glide into your golden years financially prepared.<\/p>\n","protected":false},"excerpt":{"rendered":"Editor’s Note: This story originally appeared on The Penny Hoarder. There are a lot of factors to consider…\n","protected":false},"author":2,"featured_media":599518,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530],"class_list":["post-599517","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/599517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=599517"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/599517\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/599518"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=599517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=599517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=599517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}