The cheapest states to retire in 2026 are Oklahoma, Alabama, Iowa, West Virginia and Kansas, based on the latest state cost of living index. Oklahoma ranks first at 83.0, about 17 percent below the US benchmark of 100. None of the twelve lowest-cost states taxes Social Security, but their property and sales taxes differ widely, and that gap decides where the same income buys the most comfortable life.
Put plainly: the typical home in West Virginia, Mississippi or Oklahoma is worth $177,000 to $221,000, against about $366,000 nationally. That gap is the difference between scraping by on Social Security and living with room to spare: a paid-off house with a yard, dinners out, and money left for travel.
The cheapest states to retire in 2026, ranked
This ranking comes from the Missouri Economic Research and Information Center (MERIC) Cost of Living Data Series, second quarter of 2026. MERIC builds each state's index from the Council for Community and Economic Research (C2ER) price survey, then averages the cities that took part in each state. The US benchmark is 100.0 for the overall index and for every category, so a housing score of 65 means housing costs about 35 percent less than the national average.
| Rank | State | Overall | Housing | Utilities | Health |
|---|---|---|---|---|---|
| 1 | Oklahoma | 83.0 | 65.1 | 97.6 | 96.7 |
| 2 | Alabama | 86.0 | 68.6 | 94.1 | 85.2 |
| 3 | Iowa | 86.1 | 70.6 | 81.7 | 93.0 |
| 4 | West Virginia | 87.0 | 69.9 | 93.3 | 88.6 |
| 5 | Kansas | 87.1 | 78.7 | 96.0 | 89.4 |
| 6 | Mississippi | 87.4 | 70.8 | 97.4 | 84.8 |
| 7 | Missouri | 88.2 | 77.7 | 94.0 | 95.4 |
| 8 | Arkansas | 89.0 | 76.9 | 98.7 | 85.5 |
| 9 (tie) | Indiana | 89.7 | 77.5 | 92.7 | 89.7 |
| 9 (tie) | Tennessee | 89.7 | 80.0 | 88.0 | 89.5 |
| 11 (tie) | Georgia | 90.1 | 77.6 | 98.0 | 100.2 |
| 11 (tie) | Nebraska | 90.1 | 76.5 | 89.4 | 104.4 |
| Florida (32nd) | 100.8 | 99.3 | 97.5 | 102.8 | |
| Arizona (39th) | 108.6 | 120.5 | 102.4 | 98.0 | |
| California (50th) | 140.3 | 192.1 | 131.5 | 110.4 |
Housing does most of the work. Every state in the bottom twelve has a housing score between 65 and 80, while its grocery score sits in the mid-to-high 90s. Groceries cost about the same nearly everywhere; shelter does not. The health column is worth a look too. It prices services such as doctor and dentist visits, and Mississippi (84.8), Alabama (85.2) and Arkansas (85.5) come in lowest. Nebraska (104.4) and Georgia (100.2) are cheap overall but at or above average on health care prices.
For scale, Hawaii is the most expensive state at 185.8. A retiree who sells a house in California, where the housing score is 192.1, and buys in Oklahoma at 65.1 can often buy a larger home outright and still bank the difference.
Two more measures: federal price data and home values
MERIC's survey is voluntary and leans on the cities that report, so it helps to check it against other sources. The Bureau of Economic Analysis publishes regional price parities (RPPs), a government measure of price levels by state. The February 19, 2026 release covers 2024, and its housing figure measures rents. For buyers, the Zillow Home Value Index gives the typical value of a mid-priced home; the figures below are for September 2026.
| State | BEA all items (US = 100) | BEA rents (US = 100) | Typical home value (Zillow) |
|---|---|---|---|
| Oklahoma | 87.8 | 62.8 | $220,801 |
| Alabama | 88.8 | 61.8 | $238,614 |
| Iowa | 87.8 | 65.3 | $236,623 |
| West Virginia | 89.5 | 54.2 | $176,576 |
| Kansas | 90.1 | 71.2 | $246,055 |
| Mississippi | 87.0 | 56.5 | $194,531 |
| Missouri | 90.8 | 69.9 | $265,387 |
| Arkansas | 86.9 | 58.2 | $224,158 |
| Indiana | 93.3 | 73.9 | $257,165 |
| Tennessee | 91.9 | 79.1 | $330,844 |
| Georgia | 96.3 | 88.7 | $329,115 |
| Nebraska | 90.1 | 75.2 | $278,299 |
| Florida | 103.4 | 122.1 | $375,361 |
| United States | 100.0 | 100.0 | $366,157 |
The lists agree on the core group. Arkansas (86.9), Mississippi (87.0), Iowa (87.8) and Oklahoma (87.8) have the lowest BEA price levels in the country, and all four are in MERIC's bottom eight. West Virginia has the lowest rents in the nation on BEA's measure (54.2) and the lowest typical home value of any state in this group, under $177,000. Tennessee and Georgia look cheap on MERIC's index, but their typical homes cost about $330,000, much closer to the national figure of about $366,000.
When a state shows up near the bottom on both lists and its home values are low, the odds are good that it really is cheap.
Taxes in the cheapest states: Social Security, property and sales
None of the twelve taxes Social Security. AARP's list (updated April 29, 2026) names eight states that still tax some benefits: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. West Virginia residents can now fully deduct their benefits, and Kansas, Missouri and Nebraska stopped taxing them in 2024. Our full breakdown is in states that don't tax Social Security.
Property and sales taxes are a different story. The table uses the Tax Foundation's 2026 property tax report (the median property tax paid as a share of home value, 2024 data) and its combined state and average local sales tax rates as of July 1, 2026.
| State | Effective property tax rate | Rough yearly tax on a typical home* | Combined sales tax |
|---|---|---|---|
| Oklahoma | 0.79% | about $1,740 | 9.06% |
| Alabama | 0.37% | about $880 | 9.46% |
| Iowa | 1.33% | about $3,150 | 6.94% |
| West Virginia | 0.51% | about $900 | 6.60% |
| Kansas | 1.21% | about $2,980 | 8.71% |
| Mississippi | 0.58% | about $1,130 | 7.06% |
| Missouri | 0.89% | about $2,360 | 8.44% |
| Arkansas | 0.56% | about $1,260 | 9.48% |
| Indiana | 0.76% | about $1,950 | 7.00% |
| Tennessee | 0.52% | about $1,720 | 9.61% |
| Georgia | 0.79% | about $2,600 | 7.56% |
| Nebraska | 1.44% | about $4,010 | 6.98% |
*Our arithmetic: the Tax Foundation rate times the Zillow typical home value above. Your bill depends on the county, the assessed value and any senior exemption, so use it as a rough comparison only. The national average combined sales tax rate is 7.53 percent.
Three things stand out. Nebraska, Iowa and Kansas carry some of the highest property tax rates in the country (Nebraska ranks 6th, Iowa 9th and Kansas 13th), so a homeowner there can pay three or four times what a similar owner pays in Alabama or West Virginia. Tennessee, Arkansas and Alabama go the other way, with low property taxes and combined sales tax rates above 9 percent, which falls on everyday spending. And West Virginia is low on both. Many states and counties offer property tax relief for older homeowners; see property tax breaks for seniors by state before you rule a state out.
State income tax rates are falling in several of these states. The Tax Foundation's review of 2026 state tax changes lists cuts that took effect January 1, 2026: Oklahoma's top rate fell to 4.5 percent, Mississippi's to 4.0 percent, Nebraska's to 4.55 percent and Indiana's flat rate to 2.95 percent. How much of your pension or IRA withdrawals each state taxes is a separate question, covered in tax-friendly states for retirees.
What the index leaves out
A cost of living index prices a basket for a typical household. You are not typical. Four things can swing your real budget more than the state average:
- Where in the state you live. MERIC's own Missouri figures show the spread: the Joplin metro scores 83.8 and the Springfield metro 91.6, in a state that averages 88.2. A college town or a big-city suburb can cost far more than the state number.
- The housing you would actually buy or rent. Owning a paid-off house and renting a one-bedroom apartment cost very different amounts, and the index mixes both.
- Health care access. A cheap state with a long drive to a cardiologist is not cheap if you make the drive every week.
- Climate. Lower prices can come with hotter summers or harsher storms, which show up in your electric bill and your comfort.
Homeowners insurance also varies by county and by house, and no state index captures it well. Get a quote for a specific address before you budget.
How to choose between the low-cost states
Pick by the thing you can't change, then let price break the tie.
| If you mainly want | Start with | Why |
|---|---|---|
| The most house for the money | Oklahoma, Alabama, West Virginia | Housing scores under 70 on MERIC's index |
| Low property taxes as a homeowner | Alabama, West Virginia, Tennessee | Effective rates of about 0.5 percent or less |
| Low sales tax on everyday spending | West Virginia, Iowa, Nebraska | Combined rates under 7 percent |
| Lower health care prices | Mississippi, Alabama, Arkansas | Health scores near 85 |
| Milder summers | Iowa, Kansas, Nebraska, West Virginia | Shorter humid season than the Deep South, with real winters instead |
| Hills and mountains | West Virginia, Tennessee | Appalachian scenery at low prices |
If you want to stay near family, the cheapest state within a day's drive of them often beats the cheapest state overall. If you want to see how far a single Social Security check stretches, compare small cities rather than state averages; our guide to the cheapest places to retire in the US does that.
Florida and the Carolinas are not in the bottom twelve (Florida is 100.8, North Carolina 96.7 and South Carolina 92.7), but plenty of retirees still move there. Our guide to the cheapest places to retire in the Carolinas looks at where those two states run cheaper than their averages.
Before you commit to a move
- Rent for a month in the off-season: summer in the South, winter on the Plains.
- Price your own list: rent or mortgage, property tax, homeowners insurance, utilities, car insurance, groceries and prescriptions. Our cost of living comparison guide walks through it.
- Look up Medicare Advantage and drug plans for that county on Medicare.gov. Original Medicare works anywhere in the country, but private plan networks stop at county lines.
- Call the county assessor or treasurer and ask what a home at your price would pay, and what senior exemptions exist.
- Talk to a tax professional before you sell a home or retirement assets to move. This page is general information, not tax or financial advice.
A cheap state is a good start, and the town you pick moves your budget more. If you want the bigger jump, where the same check pays for a housekeeper and an ocean view, compare these numbers with the countries on our Live Abroad hub. The rest of our US state and city guides are on the Where to Retire hub.
Figures as of November 2026. Sources: MERIC (meric.mo.gov, Q2 2026); Bureau of Economic Analysis (bea.gov, release of February 19, 2026, 2024 data); Zillow Home Value Index (zillow.com/research, September 2026, mid-tier homes, smoothed and seasonally adjusted); Tax Foundation (taxfoundation.org, 2026 property tax report with 2024 data, sales taxes as of July 1, 2026, 2026 state tax changes); AARP (aarp.org, updated April 29, 2026).