The Cheapest States to Retire in 2025

The Most Affordable U.S. States to Retire in 2025

By Rachel Warren – Updated Jun 8, 2025 at 4:04 AM

Key Points

Seniorly study emphasizes key affordable states for retirees: Pennsylvania, Iowa, Tennessee, Nevada, Texas.
Motley Fool survey ranks Tennessee, Kansas, South Dakota as top three for overall cost of living.
Quality healthcare states like Utah, Colorado, Vermont may cost more despite their high rankings.

Finding the cheapest states to retire is important because people who retire are generally on a fixed income. Whether you'll be living on savings, Social Security, investments, a pension, or all of the above, budgeting is important. Keeping a handle on housing, grocery, and healthcare costs can spell the difference between an enjoyable retirement and endless worry about finances. Planning for retirement is essential.

In one important way, retirement is like real estate: It can be all about location, location, and location. When it comes to expenses, not all states are created equal. (Otherwise, Hawaii would probably be a much more crowded state.)

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A graphic listing 5 factors to consider when choosing where to retire: food, electricity, taxes, shelter and healthcare. — Image source: The Motley Fool.

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In determining the most affordable states for retirees to live in, Seniorly primarily considered a state's cost of living, personal income taxes, and Supplemental Security payments.

The table below features the top five most affordable U.S. states to retire, according to Seniorly's findings. We've also included Seniorly's overall rankings for these states regarding the best and worst states to retire. Seniorly's study included all 50 states plus the District of Columbia.

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Top five most affordable states. Data source: Seniorly.com..
Best States	Affordability Ranking	Overall Ranking
Pennsylvania	1	5
Iowa	2	27
Tennessee	3	24
Nevada	4	14
Texas	5	43

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The Motley Fool's study also used numerous factors to gauge affordability, including both housing and nonhousing costs of living. Examples of nonhousing costs of living include the cost of groceries, utilities, transportation, healthcare, miscellaneous goods, and services.

The study assigned an overall cost of living score to each state, with factor scores normalized on a 0 to 100 scale. Other factors that affect affordability, including cost of housing and taxes, were also scored and are included in the table below.

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Top 10 most affordable U.S. states to retire in. Source: Motley Fool Survey.
States	Overall rank (Out of 50 States)	Overall score (Out of 100)	Cost of housing score	Taxes score	Cost of living score
Tennessee	43	38	78	73	100
Kansas	25	65	91	42	100
South Dakota	10	77	80	66	99
Missouri	28	63	88	58	99
Oklahoma	41	42	94	61	99
Mississippi	40	44	98	54	99
West Virginia	35	54	100	54	97
Arkansas	47	18	94	50	96
Alabama	36	51	91	54	94
New Mexico	50	0	80	50	93

As the table shows, Tennessee, Kansas, and South Dakota ranked the most affordable for the overall cost of living, even as other expenses that impact retirees, such as the cost of housing and taxes, varied widely.

The table below shows additional findings from The Motley Fool's study that break down the data for the top 10 states with the most affordable homes for retirees.

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States with the most affordable homes for retirees. Data sources: Motley Fool Survey and Zillow (2024.)
Housing affordability rank	State	Housing affordability score	ZHVI, 2024
1	West Virginia	100	$168,172
2	Mississippi	98	$181,313
3	Louisiana	95	$201,519
4	Oklahoma	94	$205,968
5	Arkansas	94	$208,078
6	Kentucky	94	$212,088
7	Iowa	92	$220,277
8	Alabama	91	$227,508
9	Kansas	91	$229,012
10	Ohio	91	$230,798

The Motley Fool also compiled data for states with the lowest overall cost of living, excluding housing costs. The table below compares the cost of living scores from The Motley Fool's survey of over 1,500 Americans to scores from the Council for Community & Economic Research's 2024 cost of living index.

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States with the lowest cost of living for retirees. Data Sources: Motley Fool and Council for Community & Economic Research (2024).
Cost of living rank	State	Cost of living score (Motley Fool)	Cost of living index, 2024 (C2ER)
1	Tennessee	100	92.8
2	Kansas	100	92.9
3	Oklahoma	99	93.0
4	Missouri	99	93.1
5	South Dakota	99	93.3
6	Mississippi	99	93.4
7	West Virginia	97	93.9
8	Arkansas	96	94.4
9	Alabama	94	95.6
10	New Mexico	93	96.0

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Another study by Statista recorded the top 10 U.S. states with the highest levels of Medicare spending in the country. An aging population, rising healthcare costs, and increased utilization of services are all factors affecting the dynamic of healthcare spending across the country.

According to data published in 2023, the CMS spends the most per enrollee in New York, California, and New Jersey. Medicare spent an average of more than $13,139 per enrollee in New York, $12,586 per enrollee in California, and $12,394 per enrollee in New Jersey during the recorded period.

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According to the most recent data from the CMS, national healthcare expenditures on the whole grew 7.5% to $4.9 trillion in 2023, or $14,570 per person, and accounted for 17.6% of gross domestic product that year. Meanwhile, Medicare spending grew 8.1% to over than $1 trillion in 2023, or 21% of total national healthcare expenditures.

The table below features findings from The Motley Fool's retirement survey along with data from the annual America's Health Rankings Senior Report published by the United Health Foundation in 2024. The score in that report was calculated using a number of factors that represent quality, availability, and cost of healthcare, in addition to outcomes.

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Best states to retire in for healthcare. Data sources: The Motley Fool and The United Health Foundation (2024).
Healthcare rank	State	Healthcare score	America's Health Rankings Senior Report Overall Index
1	Utah	100	0.755
2	Colorado	98	0.722
3	Vermont	97	0.695
4	New Hampshire	96	0.689
5	Minnesota	94	0.640
6	Hawaii	92	0.611
7	Washington	90	0.580
8	Connecticut	88	0.544
9	Delaware	84	0.470
10	Maryland	81	0.416

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Poverty rates for older adults declined in Alaska, Montana, South Dakota, and Wyoming in 2023. The overall poverty rate among adults aged 65 or more years was 11.3% in 2023. The poverty rate for this demographic increased 0.3 percentage points from 2022.

The following table contains the top five states with the lowest poverty rates nationwide for their older populations in 2023.

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States with lowest poverty rates for senior citizens. Data source: U.S: Census Bureau.
State	Percent of people in poverty, age 65+
Alaska	7.2%
Wyoming	7.4%
New Hampshire	7.6%
Delaware	7.9%
Utah	8.2%

The 2023 poverty rate for the older population was highest in locations such as Washington, D.C. (17.7%) and Mississippi (15.8%).

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Best states to retire for taxes. Data source: The Motley Fool and The Tax Foundation.
Tax rank	State	Tax score	Effective tax rate
1	Alaska	100	4.60%
2	Wyoming	74	7.50%
3	Tennessee	73	7.60%
4	South Dakota	66	8.40%
5	Michigan	65	8.60%
5	Texas	65	8.60%
7	North Dakota	63	8.80%
8	Georgia	62	8.90%
8	South Carolina	62	8.90%
10	Oklahoma	61	9.00%

There are numerous factors to consider when determining the most tax-friendly for retirees, including state income, property, sales, motor fuel, and inheritance taxes for each state.

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