Cheapest States for Retirement in 2026: Choosing a state for retirement isn’t only about sunny weather or being close to family. Housing, groceries, gas, healthcare and taxes can change how far your retirement money goes. A cheaper home can make a big difference when most of your income comes from Social Security, pensions or savings.
A May 2026 analysis from Retirement Living compared all 50 states using housing costs, everyday living costs and tax-friendliness. Based on that study, West Virginia ranked as the most affordable state for retirement, followed by Mississippi and Alabama.
The ranking doesn’t mean every retiree will spend less in these states. Your own costs can be very different depending on whether you rent or buy, need regular medical care or live in a large city. Still, the data gives retirees a useful starting point. Jody D’Agostini, a certified financial planner quoted by Retirement Living, said, “This move could help maximize their retirement income and lower their tax burden.”
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2026 List of the Cheapest States to Retire
| Rank | State | Key affordability detail |
|---|---|---|
| 1 | West Virginia | $643 median monthly rent for a one-bedroom apartment |
| 2 | Mississippi | $260,430 median home sale price |
| 3 | Alabama | 0.37% effective property tax rate |
| 4 | Oklahoma | Low housing and living costs |
| 5 | Arkansas | $2.28 average Medicare Advantage monthly premium |
| 6 | Kentucky | 7th-lowest housing costs |
| 7 | Missouri | 8th-lowest housing costs |
| 8 | Louisiana | $254,541 median home sale price |
| 9 | Indiana | $269,504 median home sale price |
| 10 | Kansas | $861 median one-bedroom rent |
Source: Retirement Living’s 2026 affordability analysis. Housing figures use Census Bureau and Redfin data. Other measures include groceries, gas, Medicare Advantage premiums and taxes.
1. West Virginia
West Virginia moved up 17 places in Retirement Living’s 2026 affordability ranking. It received the highest score for both housing and overall cost of living.
The median monthly rent for a one-bedroom apartment was $643. Monthly grocery spending per person was about $205. Both figures were the lowest in the country in the study. The state also has a large older population, with people aged 65 and above making up about 21% of residents. West Virginia also changed its tax treatment of Social Security in 2026. Residents can now fully deduct Social Security benefits from taxable state income.
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2. Mississippi
Mississippi stayed at No. 2 for affordability in 2026. Home prices are one major reason. Its median home sale price in March 2026 was $260,430, which was the third-lowest figure in the country.
The state also had the fourth-lowest overall cost of living in Retirement Living’s study. Grocery costs, gas prices and average Medicare Advantage premiums were also considered relatively affordable. Mississippi’s individual income tax rate was reduced to 4% in 2026 as part of the state’s planned tax reductions.
3. Alabama
Alabama came third in the 2026 affordability list. The state has low living costs and also scores well on tax-related factors. Its effective property tax rate is about 0.37%, which Retirement Living says is the second-lowest in the country. Social Security benefits aren’t taxed by Alabama.
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4. Oklahoma
Oklahoma climbed six spots compared with the previous year’s affordability ranking. Low housing costs and a lower cost of everyday living helped push it into the top four.
There has also been movement in Oklahoma’s income tax system. For 2026, the top individual income tax rate was reduced to 4.5%. The state has also created a system for future reductions if certain revenue conditions are met.
5. Arkansas
Arkansas remained among the 10 most affordable retirement states even after falling four spots from the previous year.
The state had an average Medicare Advantage premium of only $2.28 per month in 2026. CMS also reported that all people with Medicare in Arkansas had access to a Medicare Advantage plan with a $0 monthly premium.
Arkansas also reduced its top individual income tax rate from 3.9% to 3.7% in 2026.
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6. Kentucky
Kentucky ranked sixth. Lower housing costs and everyday expenses helped the state stay near the top of the affordability list. Retirement Living ranked Kentucky seventh for housing costs and 10th for cost of living. Kentucky’s individual income tax rate also fell to 3.5% in 2026.
7. Missouri
Missouri came seventh. It ranked eighth for housing costs and seventh for cost of living in Retirement Living’s study.
The state has a 4.7% maximum individual income tax rate and a 0.89% effective property tax rate. So while homes and daily expenses can be cheaper, taxes can still add to a retiree’s budget.
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8. Louisiana
Louisiana entered the top 10 after moving up four positions. Its median home sale price was $254,541 in March 2026, the second-lowest among U.S. states in the Retirement Living data.
Louisiana also has a 3% flat individual income tax rate and an effective property tax rate of about 0.55%. However, its combined state and local sales tax rate is high, so retirees should look beyond income tax alone.
9. Indiana
Indiana ranked ninth. The state’s median home sale price was $269,504 in March 2026, making it one of the lower-priced housing markets in the country according to the study.
Its individual income tax rate was reduced to 2.95% in 2026, which is another factor retirees may consider when comparing living costs.
10. Kansas
Kansas completed the top 10. Its median one-bedroom rent was $861, which ranked among the 10 lowest states.
Kansas also ranked second for low cost of living in Retirement Living’s study. Monthly grocery spending per person was about $228, which was the second-lowest amount among the 10 states on the list.
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What Retirees Should Check Before Moving
- Look at rent or mortgage payments, homeowners insurance, property taxes and maintenance costs.
- Medicare premiums are only one part of healthcare spending. Prescription drugs, dental care, specialists and long-term care can also matter.
- Most states don’t tax Social Security benefits, but rules for pensions, 401(k)s and IRA withdrawals can be different. For 2026, eight states tax some residents’ Social Security income: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont.
- Groceries, gas, utilities and sales taxes can quietly add hundreds of dollars to yearly spending.
- A state may be cheap but still have fewer hospitals, limited public transport or a climate that doesn’t suit you.
Retirement Living’s model gives housing and living costs a combined 70 points and tax-friendliness 30 points. It uses data from the U.S. Census Bureau, Redfin, USDA, AAA, CMS, Social Security-related data and the Tax Foundation.
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FAQs
1. Which is the cheapest state to retire in 2026?
West Virginia ranks first in Retirement Living’s 2026 affordability analysis. Its low housing and living costs are the main reasons for its position.
2. Do these states tax Social Security?
The 10 states listed above don’t appear among the eight states that tax some Social Security benefits in 2026. West Virginia also began allowing a full Social Security deduction in 2026.
3. Is a state with no income tax always cheaper for retirees?
No. Income tax is only one part of the total cost. Housing, property taxes, sales taxes, healthcare, groceries and insurance can have a much bigger effect on a retiree’s budget.
4. How should retirees compare two states before moving?
Start with the expected monthly housing cost. Then add taxes, Medicare and other healthcare costs, food, transportation, utilities and insurance. Looking at the full yearly budget gives a clearer picture than checking only one tax rate or home price.
