10 States Where You Can Retire Comfortably for Less Than $50,000 a Year

Living on a fixed income in retirement can be challenging, but there are ways to make your retirement dollars stretch.

One pathway to a stress-free retirement might be living in an area with a lower cost of living, where your dollar can buy you a more affordable house or better cover everyday expenses such as groceries or utilities.

Check out these states where you can afford to live on less than $50,000 a year based on data from the Council for Community and Economic Research. 

All home price data for each state comes from Redfin as of August 2024.

Median home price: $385,900

Tennessee has a wide variety of options for retirement living. City lovers can choose Nashville and its robust music scene. Or, settle down in Memphis, which is home to Elvis Presley’s Graceland.

If you love the outdoors, check out more mountainous areas in places such as Chattanooga, which offers hiking trails in the mountains and the city’s Riverwalk.

Median home price: $267,200

Indiana’s low housing costs should be attractive to those on tight budgets.

The state’s median sale price in August was more than $150,000 less than the median sale price for the entire U.S., which was $432,849.

Median home price: $240,000

A report by Seniorly concluded that Iowa was an ideal state for retirement due to low housing costs for both renters and homeowners.

The study found that almost 80% of older adults in Iowa own their homes.

Median home price: $269,100

Missouri has lower transportation costs compared to many other parts of the country.

Gas prices typically are lower than in many other parts of the country, including neighboring state Illinois.

Median home price: $265,200

Only 15.4% of homes in Arkansas sold above their list price in August. That compares to 38% of homes selling above the list price in May 2022.

That could be a good sign if you are trying to negotiate a good deal on a home.

Median home price: $256,000

Mississippi is a tax-friendly state for retirees. The state doesn’t tax Social Security, withdrawals from retirement accounts, or income from a private or public pension.

Median home price: $281,200

Alabama doesn’t tax Social Security or income from public and private pensions, which helps you keep more cash in your pocket from your benefits. However, withdrawals from retirement accounts are taxed.

You can also find affordable housing on the water if you want to retire on the Gulf Coast. The median sale price for a home in Mobile, for example, was $205,000 in August.

Median home price: $279,400

The Council for Community and Economic Research found that Kansas had one of the lowest index scores for the cost of groceries, making it an attractive option compared to other states.

Median home price: $251,500

Oklahoma’s modest housing costs make it an ideal place to retire comfortably.

In addition, Oklahoma doesn’t tax Social Security, although withdrawals from retirement accounts and pensions are partially taxed.

Median home price: $250,300

West Virginia partially taxes Social Security, withdrawals from retirement accounts, and income from a public or private pension. However, the overall low cost of living makes the state a winner for retirees.

Retirement can be daunting, especially if you are worried about how you will afford life on a fixed income.

So, it’s a good idea to start planning for retirement now by creating a budget based on your potential retirement income and expenses. That way, you will know how much you need to save now so you can live comfortably later.