Most Americans are falling short in retirement savings. Only 13% of baby boomers who are still working think their savings will last the rest of their lives, according to a report from the Insured Retirement Institute, and one-third of boomers say they expect to work past age 70 or never retire at all.

Working as long as possible is a good idea in theory, but if you're forced into retirement by health issues or job loss, you may be stuck with the savings you have. And if that's not enough to live the retirement lifestyle you'd hoped for, you may need to stretch every dollar.

Map with thumbtacks in it

Image source: Getty Images

General living expenses are one of the biggest costs you face, whether you're working or retired. Even if you've paid off your mortgage, you still have to pay for food, taxes, healthcare, and transportation. If you live in an expensive state, you may not be able to lower these costs. But if you're willing to move and create a fresh start in retirement, these three states may provide a more affordable lifestyle.

1. Florida

Florida is known for being a retiree haven, and for good reason. With warm weather and sandy beaches, it's many retirees' dream life. But there's more to the Sunshine State than sun.

There's no state income tax. If your money is invested in a 401(k) or traditional IRA, you'll typically need to pay income taxes on your withdrawals once you retire. While you're subject to federal taxes no matter what state you live in, not having to pay state income taxes saves you money.

Depending on where you choose to live within the state, Florida can also be affordable to even those on tight budgets. The small town of Fort Meade, for instance, boasts a median home value of around $100,000. It's only about an hour's drive from Tampa, so you'll get the small-town prices with access to big-city amenities.

Even some of the bigger cities are still relatively affordable, if you want to live closer to the action. The median home value in Pensacola is just under $150,000, and a 900-square-foot apartment costs roughly $1,000 per month.

2. South Dakota

If you don't need to live near the sand and sun, South Dakota may be an unexpectedly great retirement destination -- especially for outdoorsy retirees. With Mount Rushmore, Badlands National Park, and Black Hills National Forest, there are plenty of outdoor activities. 

Like Florida, South Dakota doesn't levy state income tax. It's also one of the more affordable states to live in, even in the larger cities. In Sioux Falls, the average rent for a one-bedroom apartment is around $725 per month.

South Dakota also ranks highly in terms of healthcare and wellness. In fact, it achieved the highest well-being score in the country, according to Gallup's 2017 State of American Well-Being report. To compile this report, researchers examined factors including physical health, financial health, having a sense of purpose and community, and maintaining strong social connections -- South Dakota did particularly well in sense of purpose and community, and finances. When looking for a place to retire, affordability is only part of the equation; you also want to be somewhere that makes you happy and comfortable.

3. New Hampshire

New England is known for its sky-high prices, but New Hampshire has its perks. Although housing is more expensive than average (even in some of the more affordable cities, median home values hover around $200,000), the state has one of the lowest property-tax rates in the country, and it doesn't charge sales tax. Residents also don't need to pay income tax on their wages, but do need to pay a 5% tax on interest and dividend income. So although housing prices are more expensive, all the tax breaks can make it a good retirement destination.

New Hampshire also scored highly in Gallup's well-being study, ranking seventh in the country overall. It also landed within the top five states in the social connections category, which demonstrates New Hampshire residents are thriving with supportive friends and family.

Should you move during retirement?

Before you move across the country, think about your potential relocation from all angles. There are dozens of factors to consider when choosing a new retirement residence, so be sure you've done your homework first.

For example, how far away is your prospective new city from friends and family? Are you willing to leave local friends behind if you move to a new state? How much will you spend on travel if you frequently visit family out of state?

If you've determined that moving is a good option to save money in retirement, be sure to do a test run before you actually move. Once you have a city in mind, spend at least a couple of weeks there to make sure it lives up to your expectations. Some places look better on paper than in real life, so you'll want to ensure you can see yourself living there.

When you're visiting your prospective new city, try to live like a local -- not a tourist. Scope out a few neighborhoods and see which areas are within your price range. Drive during rush hour and ask yourself if that's something you can live with -- particularly if you're moving to a bigger city. And think about the job opportunities in town. Even though you'll be retired, it never hurts to have options in case you want (or need) to go back to work.

If money is going to be tight in retirement, living in an expensive city can quickly drain your funds. Although moving to a new state is a big change and a decision that shouldn't be taken lightly, it can help you save money and better enjoy your later years.