Planning to Retire Soon? Your Money Will Go Further in These 8 States

Retiring is more fun when you don't have to worry about money.

Whether you retire early or work until your full retirement age, retirement is about living your best life and doing the things you want to do. How much that costs will depend on what those aspirations are. For example, if you're hoping to spend the first few years of retirement exploring the globe, it's going to be far more expensive than fishing with friends in your hometown.

No matter what your aspirations may be, they're yours. You get to call the shots. It's easier to do the things you want when you have enough money to do so. According to the most recent Council for Community and Economic Research compiled by RentCafe, here are eight states where it's easier to stretch your retirement dollars:  

1. Mississippi

Fun fact: Not only is Mississippi home to more churches per capita than any other state in the country, but it's also home to the Marijuana Research Project, the only federally funded center devoted to studying the medicinal effects of cannabis.

The overall cost of living in Mississippi is 16% lower than the national average, and housing is one big reason why. It costs 34% less than the national average to buy a home in Mississippi. In addition, you'll pay 12% less for healthcare, 9% less for monthly utility bills, and 7% less for food. And, as you wait for healthcare savings from the Inflation Reduction Act to kick in, you'll pay 5% less than the national average for healthcare. The fact that the cost of entertainment and grooming services rings in at 9% lower than the national average is a nice perk.

2. Arkansas

With its scenic roadways and tree-lined neighborhoods, Arkansas is another state in which your retirement dollars can stretch a little further. The overall cost of living in Arkansas is 9% lower than the national average. Housing comes in 21% lower, and monthly utility bills run 6% less than the national average. You'll pay 8% less for food and a whopping 16% less for healthcare.

3. Oklahoma

If the first thought that pops into your mind when you hear the word Oklahoma is "Dust Bowl," you may not realize that water covers 1,224 square miles of the state. Not only does Oklahoma have 34 major reservoirs, but it also boasts 11,611 miles of shoreline.

The overall cost of living in Oklahoma is 12% lower than the national average. Housing runs 26% less, food is 6% lower, and goods and services are 8% lower.

4. Indiana

Indiana may rank No. 17 in terms of population, but the cost of living in the Hoosier State is 10% lower than the national average. Housing will cost you 22% less, food runs 7% less, and health care comes in at 6% less than the national average

5. Louisiana

If you're looking for a subtropical place to retire, Louisiana might be the state for you. The overall cost of living is 7% lower than the national average. Helping keep prices down are housing and utilities, both of which are 13% lower than average. Transportation will cost you 5% less, and goods and services are 2% lower than the national average.

6. Missouri

Home of the Ozark Mountains, Mark Twain, Harry Truman, and barbecue, Missouri has a lot to recommend it, not the least of which is a lower cost of living. The cost of buying a home in Missouri is 20% lower than the national average, while utilities will cost you 5% less a month, and goods and services run 7% lower than the national average.

7. New Mexico

It's tough to beat New Mexico when it comes to sheer, stark beauty. As a bonus, New Mexico produces some of the finest wines in the U.S. The average cost of living in New Mexico is 8% lower than the national average. Housing will cost you 15% less, monthly utilities run 9% lower, and goods and services come in 7% lower than the national average.

8. Iowa

Unless you're a die-hard Trekkie, you may not realize that Riverside, Iowa is the future birthplace of Star Trek Commander, Captain James T. Kirk. In the series Star Trek, Kirk was born there in the year 2228.

For others, Iowa is far more than cornfields. It's the Des Moines Art Center, Effigy Mounds National Monument, and Lake Okoboji. The cost of living in Iowa is 10% lower than the national average, with housing leading the way. Housing in Iowa costs 24% less than the national average, utilities are 4% lower, as are goods and services

The important topic of taxes

The states we've mentioned each offer lower-than-average costs of living. What's not mentioned here is taxes. As you seek the perfect state in which to retire, you'll want to reduce the amount of taxes you pay. Unfortunately, figuring it out is not always an easy matter.

For example, these eight states have no personal income tax:

• Alaska
• Florida
• Nevada
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

What's more, 34 states do not tax military retirement income, while some states offer a partial allowance for military pay. And 27 states limit the amount of tax assessed on retirement income based on income level.

Before making a final decision, be sure to find out how much a state taxes the type(s) of retirement income you will receive. After all, it's about having enough money in your bank account to fund your good times.