Retirement State Cost Calculator
Retirement Analysis
Retiring somewhere that stretches your savings further isn’t just a nice idea-it’s a necessity for most people. With Social Security barely keeping up with inflation and pensions shrinking, where you live after work can make the difference between comfort and constant worry. Some states are quietly becoming retirement havens not because of sunshine or golf courses, but because they let you keep more of your money. Here’s what actually matters when picking the best state to retire in financially in 2025.
Taxes are the biggest factor-by far
Forget the myth that Florida or Arizona are the only good options. The real winners in retirement tax policy are states that don’t tax Social Security, have low property taxes, and don’t hit retirees with income taxes on pensions or 401(k) withdrawals. In 2025, Tennessee leads the pack. It has no state income tax at all. That means every dollar you pull from your IRA or 401(k) stays in your pocket. Property taxes are also among the lowest in the country, averaging just 0.58% of home value. Combine that with no tax on Social Security, and you’re looking at one of the most tax-friendly places for retirees in America.
Other top performers include Florida, which also has no state income tax and a growing network of retiree-friendly services. But here’s the catch: property insurance in Florida has skyrocketed due to hurricane risks. A $300,000 home might now cost $4,000 a year in insurance alone. That eats into savings fast. Meanwhile, Delaware offers no sales tax, no tax on Social Security, and property taxes below the national average. It’s small, quiet, and surprisingly affordable if you’re not near the coast.
States to avoid? California, New Jersey, and Minnesota. All three tax Social Security benefits, have high property taxes, and charge steep income taxes on retirement accounts. Even if you own your home outright, your monthly cash flow can vanish under tax bills.
Cost of living isn’t just about housing
Many people assume retiring in a cheaper state means lower costs everywhere. That’s not always true. A home might be half the price in Ohio compared to Massachusetts, but groceries, prescriptions, and healthcare can be just as expensive-or worse.
According to the 2025 Cost of Living Index from the Council for Community and Economic Research, Mississippi has the lowest overall cost of living for retirees. Housing is cheap, utilities are low, and even out-of-pocket medical costs are below average. But here’s what most guides miss: access to care. Mississippi has fewer specialists per capita than most states. If you need regular physical therapy, a cardiologist, or a neurologist, you might be driving 90 minutes for an appointment.
Alabama and Arkansas are similar-low prices, but limited healthcare infrastructure. On the flip side, Georgia offers a sweet spot: lower cost of living than the national average, good access to major medical centers in Atlanta and Savannah, and no tax on Social Security. You get affordability without sacrificing care.
Don’t forget hidden costs. In states like Colorado or Washington, property taxes might be low, but utility bills are high due to extreme winters. In Texas, air conditioning runs year-round. That’s not just a comfort issue-it’s a budget breaker if your power bill jumps 40% in summer.
Healthcare access and quality matter more than you think
Retirees use healthcare more than any other age group. And in 2025, Medicare doesn’t cover everything. Out-of-pocket costs for prescriptions, dental, vision, and long-term care add up fast. The best financial retirement states make healthcare affordable and easy to reach.
Iowa and Wisconsin consistently rank high in healthcare accessibility for seniors. They have a high ratio of primary care doctors per 1,000 seniors, and Medicaid expansion means more low-income retirees qualify for help with copays. Both states also have strong programs for in-home care and transportation to medical appointments.
Compare that to Arizona, which has a large retiree population but a shortage of geriatric specialists. Many seniors end up flying to Phoenix or Tucson for routine care, adding hundreds in travel and lodging costs every year. That’s not retirement-it’s a second job.
Also consider pharmacy costs. In North Dakota, generic drugs are 20% cheaper than the national average thanks to state-level price caps. In New York, the same prescriptions can cost twice as much. That’s not a small difference-it’s $300 to $600 a year in savings.
How much you need to retire isn’t the same everywhere
Financial planners often say you need $1 million to retire. That’s only true in expensive cities. In places like West Virginia or Kentucky, $500,000 can fund a comfortable retirement if you’re careful. In San Francisco, you’d need $2.5 million just to cover housing.
Here’s a simple rule: multiply your annual expenses by 25 to get your retirement number. If you spend $40,000 a year, you need $1 million. But if you move to a state where your cost of living drops by 30%, you only need $700,000. That’s the power of location.
Take South Dakota. Median home price: $270,000. Average monthly expenses for a retiree: $2,900. No income tax. No estate tax. Property taxes below $1,500 a year. You could retire on $800,000 here and still have room to travel or help family. Do the same math in Hawaii, and you’d need $2.1 million just to break even.
What about climate and lifestyle?
Warm weather sounds great until you realize you’re paying $200 a month just to run the AC. Or until you realize your favorite restaurant closed because the owner retired and no one replaced them. Lifestyle matters-but not in the way most people think.
North Carolina offers mild winters, four seasons, and a growing number of 55+ communities with walkable downtowns, community centers, and free fitness classes for seniors. It’s not the cheapest state, but it’s one of the most balanced. You get culture, convenience, and affordability in one package.
Meanwhile, Nebraska is often overlooked. It’s quiet, safe, and has some of the lowest crime rates in the country. Seniors report higher life satisfaction here than in many sunbelt states. Why? Because neighbors know each other. Grocery stores are within walking distance. Public transit for seniors is reliable. These aren’t glamorous, but they’re the quiet pillars of a good retirement.
Top 5 best states to retire in financially in 2025
- Tennessee-No income tax, low property taxes, strong healthcare access in Nashville and Memphis, moderate cost of living.
- Delaware-No sales tax, no tax on Social Security, affordable property taxes, good public services.
- Mississippi-Lowest overall cost of living, low taxes, but limited specialist care-best for those with simple health needs.
- Iowa-Excellent healthcare access, low crime, affordable housing, and a growing network of senior programs.
- North Carolina-Balance of affordability, climate, culture, and medical access. Ideal for active retirees.
What to avoid
Some states look tempting on paper but are financial traps. Avoid:
- California-High taxes on retirement income, sky-high property taxes, expensive healthcare.
- New Jersey-Highest property taxes in the U.S., taxes Social Security, and expensive insurance.
- Alaska-No income tax, but groceries and fuel cost 50% more than average. Remote areas have no medical services.
- Hawaii-Cost of living is 2.5x the national average. Even a modest home costs $800,000+.
- Massachusetts-High taxes, expensive healthcare, and cold winters that spike utility bills.
Final tip: Test-drive before you move
Don’t sell your house and buy a new one on a whim. Rent for a year. Pick a town, not just a state. Live there through all four seasons. See how easy it is to get groceries, prescriptions, and doctor visits. Talk to other retirees. Ask how much they pay for insurance, property taxes, and car maintenance.
One woman from Chicago moved to Florida after her husband retired. She spent $12,000 on insurance in year one. She moved to Georgia the next year. Her insurance dropped to $2,800. Her property taxes halved. Her monthly budget improved by $700. That’s not luck-it’s research.
Where you retire isn’t just about where you want to live. It’s about where your money can last. Pick wisely, and your golden years won’t be spent counting pennies.
Which state has the lowest taxes for retirees?
Tennessee has the lowest overall tax burden for retirees in 2025. It has no state income tax, no tax on Social Security benefits, and property taxes that average just 0.58% of home value. Other top contenders include Florida and Delaware, but Tennessee stands out because it combines low taxes with decent healthcare access and a moderate cost of living.
Is it better to retire in a state with no income tax?
Yes-if you have retirement income from a 401(k), IRA, or pension. States with no income tax let you keep 100% of those withdrawals. But don’t ignore property taxes, sales taxes, and insurance costs. A state like Texas has no income tax but high property insurance. A state like Delaware has no sales tax and low property taxes, making it a better overall deal for many retirees.
What’s the cheapest state to retire in overall?
Mississippi is the cheapest state for retirees based on overall cost of living, including housing, groceries, utilities, and healthcare. However, healthcare access is limited in rural areas. If you need frequent specialist care, consider Alabama or Arkansas for low costs with slightly better access, or Georgia for a balance of affordability and medical services.
Do I have to pay taxes on Social Security in retirement?
It depends on the state. At the federal level, up to 85% of Social Security can be taxed if your income is high. But 37 states don’t tax Social Security at all. Tennessee, Florida, Texas, and Iowa are among them. In states like California, New Jersey, and Minnesota, Social Security is taxed like regular income. Always check your state’s rules before moving.
How much money do I need to retire comfortably?
It varies by location. In expensive states like California or New York, you may need $1.5 million or more. In affordable states like Mississippi, West Virginia, or Iowa, $500,000 to $700,000 can support a comfortable retirement if you own your home. Use this rule: multiply your annual expenses by 25. If you spend $35,000 a year, you need $875,000. Move to a lower-cost state, and that number drops fast.