What Are the 10 Cheapest States to Retire in the US
                     W H A T A R E T H E 1 0
C  H E A P E S T  S T A T E ST O  
R E T I R E I N T H E U 
S ?
B Y L E V E L F I N A N C  I N 
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The choice of the state where you will spend your retirement 
years can significantly impact your personal finances. This is due 
to the different living costs, health care costs, and tax burdens 
across the country.
When analyzing the available options, you should consider both 
financial aspects and liveability factors.
To help you with this search, we have selected some of the 
cheapest states to retire in. We included states that are both 
affordable and attractive in terms of overall quality of life. At the 
end of the article, you will also find the links to the sources we 
gathered data from.
MICHIGA
N
Michigan is not only the hub of the US  auto industry but also 
a state with beautiful shorelines and lovely countryside. Both 
its general cost of living and health care spending per person 
is below the national average. Tax-wise, it’s quite retiree- 
friendly, with no taxes on your social security income and only 
partial taxation on your pension and withdrawals from your 
retirement accounts. While some of Michigan’s major cities 
don’t enjoy the best reputation for crime, many smaller towns 
are remarkably safe and enjoyable. Examples include Sterling 
Heights and Rochester Hills.
OHI
O
This is another Great Lake state that retirees may find ideal to 
live in. Housing (including rental apartments) can be very 
affordable if you know how to search. The overall cost of living 
is the 17th lowest among US  states. While the state has full 
taxation on retirement account withdrawals, there is neither a 
marginal income state tax nor taxation on social security 
income.
OKLAHOMA
Rich in agriculture and with strong links to Native American 
culture, Oklahoma is probably not the state you think of when 
planning your retirement. While the state also applies partial 
taxation on pensions and retirement account withdrawals, it has 
very low property taxes. Its general cost of living is the second 
lowest in the country, making your retirement dollars last longer. 
Housing and healthcare costs are also quite low compared to 
most states.
MISSOURI
With a culture that combines elements from both the South and 
the Midwest, Missouri is a mountainous state with great 
scenery and many relaxing locations. While its tax system is not 
the most retiree-friendly in the country, its cost of living is the 
7th lowest in the country. The state also ranks in the top 30 
states for quality of life in the US. Small towns, such as 
Glendale, Maryville, and Greenwood, tend to be quite safe on 
average and only major cities tend to have higher crime rates.
GEORGIA
Famous for its peaches, subtropical climate, and warm 
hospitality, Georgia is also a very affordable state to retire and 
live in. Health spending per person is particularly low 
compared to most states, and the general cost of living is 
among the 5 lowest in the country. While Georgia has a 
relatively high marginal state income tax, it doesn’t tax social 
security income and imposes only partial taxes on pensions 
and withdrawals from retirement accounts.
TEXAS
Currently one of the fastest-growing states in the country, The 
Lone Star State offers numerous benefits to people looking for a 
place to retire. These include the 12th lowest cost of living in 
the US, a very low health spending per capita, and a particularly 
retiree-friendly tax system with no state taxes whatsoever on 
income, pensions, and retirement account withdrawals.
FLORIDA
It’s not just because of its weather and beaches that Florida is 
such a popular state among retirees and people moving from 
other states. While general living is a bit more expensive than 
the national average and home prices are higher than in many 
states, Florida’s tax system is very advantageous for retirees.
There is no state taxation on pensions or income, and average 
property taxes are quite low.
NORTH CAROLINA
A pleasantly mild climate, 300 miles of coastline, and great rural 
scenery are only some of the reasons that make North Carolina 
attractive to retirees. Its tax system may not be the most inviting 
for retirees, but the state makes up for it with a low cost of 
living and affordable health care. Not to mention its quality of life 
index, which ranks in the top 15 nationwide.
INDIANA
Also known as the state at the crossroads of America, Indiana is 
an uncrowded and relaxing state in which to enjoy your years 
as a retiree. While the state has full taxation on both pensions 
and retirement account withdrawals, the general cost of living is 
the 8th lowest in the country, and housing tends to be quite 
affordable.
SOUTH DAKOTA
With its lakes, parks, and trails, South Dakota is a great choice 
if you love spending a lot of time outdoors. This state combines 
a low cost of living with a very attractive tax system. You won’t 
be taxed by South Dakota on your pension, income, retirement 
account withdrawal, and social security income. Its crime rate is 
only slightly higher than the national average, and many small 
towns are remarkably safe.
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