The Absolute Cheapest States To Retire In 2020

By Kathy Morris - Mar. 5, 2020

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After a lifetime of work, many look forward to a comfortable retirement.

For many a comfortable retirement means moving, according to the latest US Census bureau over half a million of adults over 65 moved states last year alone. However, not all states are a great place to retire. In fact, a lot of states will leave retirees just scraping by.

Where should retirees go to make the most of their retirement savings and live well for less?

The Cheapest States To Retire

  1. Mississippi
  2. Arkansas
  3. Oklahoma
  4. West Virginia
  5. Indiana
  6. Louisiana
  7. Kentucky
  8. Missouri
  9. Alabama
  10. Tennnessee

Forget Florida and the west and east coasts. More retirees should be looking towards the south when planning their retirement. Affordable housing and low cost of living make the south the place to be for retirees. Keep reading to see how we determined this, or scroll to the bottom to see where your state lands.

How We Determined The Most Expensive States To Retire

We ranked each state 1 to 50 on the following factors:

  • Median House Cost
  • Monthly Home Owner Cost
  • Cost Of Living
  • Medicare Advantage Cost
  • State Medicare Spend Per Person

First, we examined median housing costs using data from the ACS Census. Moving from a state with expensive housing costs to one with cheaper housing costs can drastically elevate retirees standard of living and significantly add to their retirement fund. The cheaper the housing, the better to retire.

Next we pulled in monthly home owner costs from the ACS. We looked at the percentage of people over 65 who are spending 30% or more of their income on house. The lower the cost, the better for retirement. We then used our data on cost of living to provide more context to the costs seniors can expect to face in each state. Living is expensive, even small expenses like toothpaste and a cup of coffee, can add up.

Finally, we examined the cost of healthcare. You might be able to cut coupons or downsize your house, but you can’t choose not to get sick. This area is especially important because healthcare costs continue to rise each year and leaves many seniors scrambling.

First, we examined Medicare Advantage Costs, using data from The Kaiser Organization. Note, Alaska does not have individual Medicare Advantage plans so was excluded from this metric. We then looked at state’s contributions to Medicare per residence. The more a state spends on Medicare, the better for seniors.

1. Mississippi

Median Home Cost: $114,500
Medicare Advantage Monthly Cost: $38.56
Cost Of Living: $46,084

Mississippi is the most affordable state to retire in the whole country. The median home price in Mississippi is only $114,500, which means retirees relocating from more expensive states can expect to pocket quite the stack of cash. Add in low property taxes and warm, sunny weather and it’s easy to see more retirees should give the Magnolia state a second look.

2. Arkansas

Median Home Cost: $123,300
Medicare Advantage Monthly Cost: $44.49
Cost Of Living: $44,571

Arkansas mild weather and plenty of outdoor activities for retirees who anticipate an active retirement. While Arkansas homes are a smidge more expensive than Mississippi, home prices are still affordable with a median price of $123,300. Arkansas homeowners over 65, also spend a smaller chunk of their income on home owner costs than other states.

3. Oklahoma

Median Home Cost: $130,900
Medicare Advantage Monthly Cost: $48.49
Cost Of Living: $46,613

Oklahoma is the third cheapest state to retire. While Oklahoma doesn’t have the warm beaches many retirees dream of calling home, it does have affordable homes and low monthly home owner costs. That’s nice.

4. West Virginia

west virginia
Median Home Cost: $115,000
Medicare Advantage Monthly Cost: $59.75
Cost Of Living: $44,823

In fourth place we have West Virginia. The mountain state has affordability in spades. West Virginia’s location near the upper-east coast makes it particularly appealing for those looking to retire away from the expensive Northeast but don’t want to go far.

5. Indiana

Median Home Cost: $135,400
Medicare Advantage Monthly Cost: $48.04
Cost Of Living: $46,838

Cheap housing, low monthly housing costs, and a favorable cost of living push Indiana ahead of its neighbors. While it may not be as warm as other states in the top 10, Indiana still has a lot to offer retirees. Some people enjoy experiencing more than two seasons.

6. Louisiana

Median Home Cost: $157,800
Medicare Advantage Monthly Cost: $41.98
Cost Of Living: $47,975

The Bayou state is the 6th best state for retiring on a budget. In addition to delicious food, Louisiana retirees can expect low costs of living, affordable homes, and lower healthcare costs.

7. Kentucky

Median Home Cost: $135,300
Medicare Advantage Monthly Cost: $56.36
Cost Of Living: $43,308

If all you about Kentucky is Bourbon and horse races, you may not know the state is seriously affordable. The median home price is only $135,300– 50,000 less than neighboring Illinois and 400,000 than expensive Hawaii. Kentucky also has the lowest cost of living in the nation. Go Kentucky.

8. Missouri

Median Home Cost: $151,600
Medicare Advantage Monthly Cost: $43.15
Cost Of Living: $46,159

Sandwiched between the south and west, Missouri is a great choice for retirees looking to live well on a budget. Reasonable housing and affordable cost of living mean retirees can enjoy more luxuries than in a pricier states. What keeps Missouri from ranking higher? Healthcare costs could be cheaper.

9. Alabama

Median Home Cost: $137,200
Medicare Advantage Monthly Cost: $51.88
Cost Of Living: $45,824

Many retirees may think Florida when they think retirement, but more should look to its neighbor Alabama. Swap out the Atlantic Ocean for Alabama’s Gulf of Mexico and you could save a bundle. Alabama has a Medicare Advantage monthly cost average 51$, and only 15% of residents over 65 are overburdened by home owner costs.

10. Tennessee

Median Home Cost: $158,600
Medicare Advantage Monthly Cost: $46.02
Cost Of Living: $46,785

Tennessee is the 10th most affordable state to retire. In addition to affordability, Tennessee overs a vibrant country music scene, the beautiful smokies,

Summary On The Cheapest States To Retire

Look, maybe you have a small fortune to spend on your retirement and can comfortably retire anywhere. But for most people that isn’t the case. Where they choose to retire will drastically impact their quality of life and help (or hinder) stretch their retirement savings. The 10 states above are the cheapest states to retire in the nation.

Retirees should keep in mind this data is statewide, so costs may vary based on cities. Which states should retirees avoid if they don’t want to drain their retirement savings?

The Most Expensive States To Retire

  1. Hawaii
  2. Colorado
  3. Oregon
  4. Washington
  5. Massachusetts
  6. Vermont
  7. New Jersey
  8. Connecticut
  9. New Hampshire
  10. Minnesota

The Cheapest States To Retire, From Most Affordable To Least

Rank State Avg. Home Price Cost Of Living Medicare Spending Per Residence
1 Mississippi 114,500 46,084 11,021
2 Arkansas 123,300 44,571 9,479
3 Oklahoma 130,900 46,613 10,429
4 West Virginia 115,000 44,823 10,268
5 Indiana 135,400 46,838 10,714
6 Louisiana 157,800 47,975 11,811
7 Kentucky 135,300 43,308 10,368
8 Missouri 151,600 46,159 10,457
9 Alabama 137,200 45,824 10,267
10 Tennessee 158,600 46,785 10,371
11 Iowa 142,300 48,882 9,317
12 Ohio 140,000 45,853 11,038
12 South Carolina 154,800 46,568 10,298
14 Georgia 166,800 47,946 10,429
15 Texas 161,700 48,160 11,895
16 Nebraska 147,800 48,076 9,956
17 Florida 196,800 52,206 12,229
18 Wyoming 213,300 47,951 9,050
19 Kansas 145,400 48,054 10,126
20 Utah 256,700 47,922 9,084
20 North Carolina 165,900 49,575 10,260
22 Michigan 146,200 48,837 11,318
22 South Dakota 159,100 45,410 9,315
24 North Dakota 185,000 46,814 9,461
25 Pennsylvania 174,100 49,914 11,243
26 Alaska 265,200 54,400 9,288
27 Montana 219,600 47,083 8,238
28 Arizona 209,600 51,341 10,096
29 Idaho 192,300 45,801 8,737
29 Maine 184,500 51,305 9,325
31 New Mexico 166,800 48,050 8,663
32 Delaware 244,700 53,112 11,460
33 Illinois 187,200 52,304 11,116
34 Nevada 242,400 52,698 10,796
35 California 475,900 57,315 11,833
36 Maryland 305,500 58,178 12,000
37 Wisconsin 173,600 51,120 9,608
38 New York 302,200 59,128 12,179
39 Virginia 264,900 54,264 9,677
40 Rhode Island 249,800 53,240 10,901
41 Minnesota 211,800 52,115 9,917
42 New Hampshire 252,800 55,103 9,397
43 Connecticut 272,700 59,502 11,964
44 New Jersey 327,900 56,109 12,614
45 Vermont 223,700 51,977 9,231
46 Massachusetts 366,800 59,560 11,899
47 Washington 311,700 51,271 8,997
48 Oregon 287,300 51,900 8,942
49 Colorado 313,600 53,792 9,287
50 Hawaii 587,700 60,700 8,592

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Kathy Morris

Kathy is the head of content at Zippia with a knack for engaging audiences. Prior to joining Zippia, Kathy worked at Gateway Blend growing audiences across diverse brands. She graduated from Troy University with a degree in Social Science Education.

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Topics: Study