Key Takeaways
- Settling in an affordable state can help you stretch pension, Social Security, and retirement account dollars.
- Mississippi ranks as a top state for retirees, given its combined monthly housing, food, and transportation costs.
- Virginia, meanwhile, offers a low monthly cost of living with high average annual retirement incomes.
- Other top states for stretching retirement dollars include New Mexico, Arizona, Georgia, and Texas.
Many retirees struggle with financial instability. In fact, nearly half (45%) of households headed by those 60 and older don’t make enough income to cover basic living expenses, and 80% couldn’t weather a serious financial emergency “without falling into poverty,” according to a report from the LeadingAge LTSS Center at the University of Massachusetts Boston and the National Council on Aging.
That’s perhaps unsurprising, given the median household income for Americans ages 65 and up was $56,680 as of 2024. If you’re worried about funding your retirement, a change of scenery could prove worthwhile.
Enjoy a Low Cost of Living Plus Valuable Perks in These States
Using data compiled for Investopedia’s list of the 50 Best Cities To Retire in the U.S., we identified the top 10 states with the lowest monthly cost of living at the county level. Cost per month is a combination of housing, transportation, and food costs.
1. Mississippi
The Magnolia state tops our list, given that living in Adams County, located on the southwestern border, typically runs residents a decidedly low $2,350 per month. That figure includes $592 in median housing costs, $1,181 in monthly transportation costs, and $577 in monthly food costs.
Granted, Mississippi retirees only make, on average, around $23,347 per year, but the state’s tax code is famously senior-friendly, foregoing tax on retirement income, including pensions and Social Security, and offering property tax exemptions for homeowners 65 and up.
Adams County hugs the Mississippi. The St. Catherine Creek National Wildlife Refuge is also located in the county.
2. New Mexico
Two counties in New Mexico—San Miguel and Guadalupe—have notably low monthly costs of living: $2,359 and $2,389, respectively.
Guadalupe County is home to Santa Rosa, which offers scuba diving in the crystal-clear waters of Blue Hole, as well as horseback riding, hiking, and golf. It also has one of the lowest median monthly housing costs in the nation at $510 per month, helping retirees stretch their average annual income of $29,707.
Known colloquially for its more than 300 days of sunshine a year, scenic New Mexico offers plenty of attractions, like the White Sands National Park, Carlsbad Caverns, and the Albuquerque International Balloon Fiesta.
3. Arizona
Residents of La Paz County can expect to pay around $2,418 per month in housing, transportation, and food expenses, with median housing costs quite low at $539 per month.
The state ranks 18th in average annual retirement income, with older adults earning around $28,725 per year.
You might need to spend peak summer days indoors when temperatures can climb as high as 112°F, but there’s plenty to do on cooler days, as the state is home to one of the world’s great wonders, the Grand Canyon.
4. Virginia
Located close to the border of North Carolina, Danville County, Virginia, offers a low-cost of living of $2,420 per month, and the lowest monthly transportation costs of any state on this list ($1,058).
Fast Fact
In addition to affordability, older adults in Virginia earn, on average, one of the highest annual retirement incomes ($35,306) in the U.S.
Old Dominion, also known as the “Mother of States,” combines scenic routes, like the Skyline Drive, with coastal cities, like Virginia Beach, and historic attractions, like Colonial Williamsburg.
5. Georgia
Southeast Georgia’s Ware County is known for its bustling retail center and low cost of living, with residents typically paying $2,469 per month for housing, food, and transportation.
Low monthly food costs ($564) can help you stretch your average annual retirement income of $27,961.
If shopping isn’t in your budget, you can enjoy scenic and low-cost day trips to Savannah’s Historic District, Callaway Gardens, and the Georgia Aquarium.
6. Texas
Maverick County, located along the Rio Grande River, ranks as the most affordable county in the state at $2,482 per month with notably low monthly food costs ($470).
Texas retirees earn, on average, $27,471 in retirement income, which is right in the middle of the pack among states. But you can stretch those dollars by taking advantage of key tax breaks, like no state income tax and property tax deferrals for older adults age 65 and older.
Many Texas cities also offer recreational and leisure programs for older adults that include organized day trips, discounts on gym and pool memberships, and social clubs.
7. Missouri
Missouri makes our list thanks to Butler County, where residents typically pay around $2,495 per month for food, housing, and transportation.
Missouri retirees earn, on average, less in retirement income than most other states at just $24,125 a year. Fortunately, Social Security is exempt from state income tax and certain seniors can also qualify for a property tax credit.
Beyond that, the Show Me State offers plenty of low-cost and senior-friendly recreational activities, including trips to the Missouri Botanical Garden in St. Louis, the Sophia M. Sachs Butterfly House, and the Katy Traill State Park.
8. Oklahoma
Oklahoma’s Choctaw County typically costs residents $608 for housing, $1,291 for transportation, and $600 for food per month, totaling $2,499.
The Sooner State’s average annual retirement income is on the lower end ($23,963), compared to other states, so you’ll want to stretch those dollars by taking advantage of the prairie lands’ scenic and low-cost attractions, such as Three Forks Harbor.
9. West Virginia
Ohio County, West Virginia, costs residents just $2,515 a month, which breaks down to $742 for housing, $1,161 for transportation, and $612 for food.
The one big drawback is that West Virginia ranks last in annual retirement income, with seniors earning an average of $21,118 per year.
You can take advantage of the state’s active senior centers, scenic state parks, and the six-mile Caperton rail trail, which is paved for walkers and cyclists.
10. Pennsylvania
Pennsylvania rounds out the list, thanks to Cambria County. Home to small city Johnstown, county residents typically pay $2,523 a month for housing, food, and transportation.
Older adults make, on average, $24,392 per year in retirement income. In addition, they can take advantage of an expanded property tax rebate.
The Keystone State offers a variety of leisure activities, with scenic state parks and historic sites, from the Johnstown Flood Museum to Philadelphia.
