The Best (and Worst) States To Retire on a Budget

Retired senior couple gardening and enjoying retirement

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Retired senior couple gardening and enjoying retirement
Cheapism / DALL-E 3

Planning Ahead

If you feel like everything costs an arm and a leg nowadays, you're not imagining it. Expenses for housing, healthcare, and everyday necessities have skyrocketed in recent years — making planing for retirement increasingly more challenging. Amid these times of crushing inflation and economic uncertainty, seniors living on fixed incomes are particularly affected. 

In order to budget for the most comfortable retirement, figuring out where your money will go the farthest is key — and luckily there's a study for that. According to Seniorly, these are the cheapest (and most expensive states) for retirement in 2024. 


Best: Iowa

Topping the list as the cheapest state in the U.S. for retirement, Iowa stands out thanks to its combination of low median rent, high supplemental security income payments (SSI), and favorable tax policies for those over 55,  according to the Seniorly report. The Hawkeye State is also known for its ample farmland and for having "the most delicious corn ever," according to my friend who grew up in Des Moines. 

Related: 13 Retirement Mistakes to Avoid

Santa Fe, New Mexico, USA
Sean Pavone/istockphoto

2nd Best: New Mexico

The Land of Enchantment is recognized for its affordability — especially when it comes to utilities and healthcare costs. It boasts the second-lowest average for utility bills in the country (about $91 for electricity per month). The state also stands out for its efficient Medicare hospital spending, which is the third-lowest compared to the national average. 

Related: Retire Cheaply and Still Enjoy Your Life With These 18 Tips

Gatlinburg, Tennessee
Jonathan Ross / istockphoto

3rd Best: Tennessee

Snagging the third spot for most affordable state to retire in is Tennessee. With a significant increase in home values, the state is an attractive option for those looking to invest in real estate. The state's high homeownership rate (about 82% of seniors in the state own their own homes) also contributes to Tennessee's appeal for retirees seeking both financial security and a comfortable lifestyle.

Oklahoma Route 66 Sign along the historic Route 66 in the State of Oklahoma, USA.

4th Best: Oklahoma

Highlighted by its remarkably low average grocery spending of $226 per month (the lowest in the nation), Oklahoma is also known for having affordable housing. Despite economic pressures, the state has seen one of the smallest increases in living costs. This favorable financial landscape offers retirees an advantage by being able to further stretch their retirement funds and get more bang for their buck. 

Related: The Surprising Way That Seniors Are Saving Money on Housing

mt rushmore in south dakota

5th Best: South Dakota

Ranking fifth, South Dakota is another state that offers attractive living costs for retirees. Boasting one of the lowest average rents ($1,143 per month), grocery expenses ($250), and competitively low gas prices ($2.81 per gallon), South Dakota is another appealing option for those looking to maintain a comfortable standard of living. 

The above states were then followed by: Idaho, Michigan, Wyoming, Pennsylvania, Utah and Arkansas in affordability. 

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Landscape image of the Golden Gate Bridge, San Francisco

Worst: California

Topping the list for worst/most expensive state to retire in (and surprising absolutely no one) is *drum roll* California. Known for its exorbitant prices — especially in major cities like San Francisco and Los Angeles — the Golden State has one of the highest costs of living in the country. With gas alone costing an average of $4.62 per gallon, it's easy to see why only 16% of Californians can afford to buy property in the state. 

Related: Discovering California's Best Cheap Eats: A Guide to Affordable Dining

new york

2nd Worst: New York

Ranking as the second most expensive state to retire in, the Empire State is known for its ridiculously high costs of living — especially in housing (trust me, I grew up in a shoebox in Queens). While Massachusetts leads with the highest median rent across the country, New York’s home value growth has grown at a sluggish rate of only 8.6%, which has impacted investment returns for homeowners. 

Washington, DC at the Tidal Basin and Jefferson Memorial
Sean Pavone/istockphoto

3rd Worst: District of Columbia

According to the study, the District of Columbia is another challenging location for retirees (albiet not a state) because it has the lowest homeownership rate among those aged 65 and above. Washington D.C. is also known for its steep costs of living ($3.39 per gallon for gas), significant healthcare costs, and pricey recreational activities. 

Worcester, Massachusetts

4th Worst: Massachusetts

Also known for its high living costs, Massachusetts boasts the highest median rent ($3,200 per month) in the country. To make matters worse, the state's overall cost of living is also much higher compared to the national average — making it a subpar choice for those seeking an affordable and comfortable retirement lifestyle.

New Haven, Connecticut

5th Worst: Connecticut

Connecticut is another state where retirees might find the cost of living burdensome. The state is known for its high monthly electricity bills ($176), which are among the highest in the country, second only to Hawaii. In addition, the general cost of living, including housing, groceries, and healthcare, is also higher than the national average.

Other worst/most expensive states to retire in include: New Jersey, Hawaii, New Hampshire, Nevada, and Maryland.