For most people, retirement income comes from three sources: Social Security benefits, private pensions and asset income. Some retirees prefer to stay where they have lived prior to retirement, but others find it to be too expensive without steady employment income. Even downsizing one’s home doesn’t always save enough for a comfortable retirement.
Generally speaking, the least expensive states for retirement are in the South (Alabama, Georgia, Mississippi, Louisiana, Texas, Florida, etc.) and in the Mid-West (Iowa, Nebraska, Kansas, Oklahoma, Indiana, etc.). The Northeast and the West and the Northwest are the most expensive areas of the country for retirement.
When considering the most affordable place for retirement, think about all potential expenses and how they weigh against each other. One state may not tax retirement income (Social Security, private pensions, etc.) but offset that lack of revenue with high property taxes. And while most states do not tax Social Security, some do.
If you are searching for a spot where the cost-of-living is low, check out the towns below. Cost-of-living is based on health care, housing, taxes, recreation, food, utilities and transportation costs.
These are compared against the national cost-of-living average to determine the most affordable places to live in the United States. Click here for a list of states with no income tax, here for a list of states that tax Social Security benefits and here for a list of states with estate death taxes (in some states, dying is no excuse for not paying taxes).