Key Takeaways
- America’s Southwest offers retirees a blend of natural beauty, endless opportunities for adventure, and a rich cultural history.
- Each city on our list doesn’t tax Social Security benefits, and several are in counties boasting median monthly property taxes below $100.
- Beyond favorable taxes and affordable housing, each city offers strong value through affordable amenities, abundant free outdoor activities, and access to quality healthcare.
Filled with red-rock canyons, arid desert landscapes, and deep cultural roots, the Southwest’s beauty draws retirees craving wide-open spaces, adventure, and a slower pace of life. While certain cities in the region command a steep cost of living, others remain refreshingly affordable.
To uncover the area’s most budget-friendly retirement havens, Investopedia partnered with Travel + Leisure to analyze the cost of living, various taxes, and amenities important to retirees, such as recreation opportunities and health care accessibility. We ultimately pinpointed the five best affordable Southwest cities for retirees.
From small towns to mid-sized cities, the communities below offer retirees a rare blend of affordability, attractive amenities, and authentic Southwest character that make a vibrant retirement possible—even on a modest budget.
Note
None of the states where you’ll find our five towns tax Social Security benefits.
1. Hugo, Oklahoma
Hugo, Oklahoma, was once a “Wild West” town frequented by gunslingers, dance-hall girls, and traveling circuses. Today, it’s known for its beautiful fall foliage, curated museums, Asian elephant preservation efforts, and more leisurely pastimes, such as fishing.
Retirees settling in this small town enjoy affordable median home values of around $120,000 at the county level, and the lowest median monthly county property taxes ($42) in our complete list of the 50 Best Places to Retire.
While Oklahoma doesn’t tax Social Security benefits, withdrawals from retirement accounts may be taxed in certain cases.
2. Eagle Pass, Texas
Active retirees can find plenty to enjoy in Eagle Pass, from its nine-hole municipal golf course to shopping areas and lakeside fishing. You can also take a chance at the nearby Lucky Eagle Casino—Texas’s sole casino—or indulge in authentic Mexican cuisine on downtown Main Street.
You may appreciate all that Eagle Pass has to offer even more once you realize that Texas doesn’t have any income, including Social Security benefits or retirement income withdrawals.
Residents of Maverick County, where Eagle Pass is located, also have the lowest average paycheck deductions (FICA and federal and state income taxes) among the counties in this article. For retirees planning to work in their golden years, this may be another vote for Eagle Pass.
The county has the lowest monthly food costs ($470) of all our 50 best cities to retire, too, and median home values are an attractive $151,500.
3. Parker, Arizona
A great city for outdoor enthusiasts, Parker, Arizona, is home to the nearby Bill Williams National Wildlife Refuge, which offers wildlife viewing, fishing, hiking, birding, and more.
You’ll also find stunning scenery at Buckskin Mountain State Park, while the Parker Dam rounds out the area’s top attractions. All these free activities allow retirees to stay active and engaged without emptying their wallets.
Parker’s La Paz County ranks seventh for most affordable median home values in our complete list of the 50 best towns to retire, with median home values coming in under $118,000. La Paz’s monthly housing costs also stand out, ringing in at less than $540.
While Arizona does tax withdrawals from 401(k)s and IRAs, Social Security benefits remain untaxed.
4. Muskogee, Oklahoma
Muskogee, Oklahoma, is a mid-sized town bursting with history, music, and outdoor adventure. Explore museums honoring Native American heritage and offering previews into early Oklahoma life, visit the USS Batfish Memorial, or catch live country tunes downtown.
Despite Muskogee County being one of the most populous counties in this article, houses are very affordable, with the median home value below $138,800. Property taxes are especially low, with a monthly median of about $80.
There are no state taxes on Social Security benefits, but there are taxes on withdrawals from retirement accounts in some instances.
5. Lake Havasu City, Arizona
Lake Havasu’s claim to fame is its iconic London Bridge. Dismantled into more than 10,000 granite blocks before being shipped from London in 1967 and reassembled within city limits, Lake Havasu’s London Bridge has helped drive the city’s growth into the large town that it is today. Another highlight is the Annual Havasu Balloon Festival and Fair, a popular local attraction that draws visitors from far and near.
For budget-conscious retirees, Mojave County—home to Lake Havasu City—ticks many boxes. Despite a population exceeding 217,000, county residents enjoy a fairly low cost of living. There’s also great access to healthcare throughout the region.
It’s important to note, however, that Arizona taxes income withdrawals from retirement accounts. Moreover, Mohave’s median home values—about $253,200—are by far the highest on this list. Nonetheless, these prices remain relatively affordable when compared to the national average.
Note
To learn more about how we created our list of the four best large towns for retirees in the U.S., see our methodology.
