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The Most Affordable States for Retirees

In a new study of national data covering eight financial factors, Seniorly reveals the best - and worst - places to retire on a budget.

By Arthur Bretschneider Updated on Jul 5, 2023
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The precarious economic climate, soaring inflation, and the fears about Social Security insolvency can be worrisome for many seniors from all economic levels. 

While Democrats and Republicans have been arguing for months over the future of Social Security and Medicare, it’s hard to debate the big picture: if current trends continue, these two safety net programs for seniors are set to run dry in the coming years, due in part to the country’s rapidly aging population.

If no action is taken, just 80% of Social Security benefits will be payable in 2035. And any changes to the program would have major ripple effects for older Americans, given 87.8% of senior-led households receive Social Security income.

On top of that, the economy remains a concern. Inflation is high, causing interest rates to spike. This month when two banks – Silicon Valley Bank and Signature Bank – suddenly closed, we witnessed the largest banks failure since 2008

It’s not just older adults who should be worried. About 1 in 4 Americans have no retirement savings, meaning affordability will likely be the largest single determinant of where they retire. In general, older adults will need to ensure that their retirement income is sufficient to cover their living expenses, while also allowing them to enjoy their golden years.

While larger cities and in-demand areas tend to have a higher cost of living, rural areas and smaller cities tend to may be more affordable. Although these more affordable communities can be found in every state, they all offer something different depending on their location, climate, proximity to friends and family and more.

It has never been more critical for retired Americans and those approaching retirement to consider myriad financial factors before settling down. 

To aid in this decision, Seniorly analyzed eight financial metrics using the most recent federal data spanning the cost of healthcare, cost of living, retirement income, taxes, and senior poverty rates to determine the country’s most affordable states for retirees. Given the current economic climate, this analysis focuses strictly on financial factors and does not include data related to lifestyle. 

Key Findings:

  • The Mountain State region is the most affordable for retirees, with Wyoming, Utah, Montana, Idaho, Colorado and New Mexico all ranking among the top 10 states overall.
  • Six of the 10 most affordable states have costs of living that are slightly above average– but they make up for it with lower Medicare spending per beneficiary, home utilities costs and senior poverty rates.
  • Seven of the 10 least affordable states for seniors are on the East Coast – and the other three are Hawaii, Texas and California.

Best and Worst States

Wyoming is the country’s most affordable state for retirees, buoyed by its lower cost of living, Medicare costs and a low senior poverty rate which shows retirees can actually afford to keep living there. In addition, most homeowners spend less than 30% of their income on housing. 

Half of the top 10 states – Wyoming, Idaho, Colorado, Delaware and Tennessee – are considered especially tax-friendly for retirees, according to a Kiplinger analysis that takes into account taxes on income, sales, property, gasoline, cigarettes and other factors.

Conversely, the Northeast and West Coast are the least affordable for seniors on a budget, with Massachusetts, New York, Connecticut, New Jersey and California rounding out the bottom five. 

That’s largely due to their higher living costs, residential utilities bills and other housing costs. In Connecticut, for example, 1 in 3 older homeowners spend more than 30% of their income on housing.

Surprising Result in Florida

Notably, while Florida may have a reputation as a haven for retirees, it ranks 43rd overall, largely due to its high annual Medicare spending level ($13,652 per beneficiary), costly monthly utilities and a senior poverty rate of 11%. 

That said, the Sunshine State is considered fairly tax-friendly for retirees. In a study that factors in weather and lifestyle, Florida would surely rank higher.

State-Level Data in Each Category (Includes D.C.)

Cost of Living vs. Income

The relationship between cost of living and retirement income is an important consideration for seniors who are deciding where to retire, given affordability can significantly affect their quality of life. In general, older people will want to maximize their retirement income – which depends on their level of savings, pensions and Social Security benefits – while minimizing their living expenses in order to enjoy a comfortable retirement.

While states with lower living costs tend to also have lower retirement incomes, Georgia may offer a sweet spot. It has one of the lowest costs of living in the U.S. (an index score of 88.6), but a retirement income of $32,614, above the national average of $31,631. It’s also considered relatively tax-friendly for retirees.

Otherwise, the cost of living is lowest in Mississippi (ranked 22nd overall), Oklahoma (ranked 27th), Kansas (ranked 26th) and Alabama (ranked 16th), while it’s highest in Hawaii (ranked 44th), Washington, D.C. (ranked 42nd), Massachusetts (ranked 51st), California (ranked 47th) and New York (ranked 50th).

Medical bills

Health care is another major consideration for seniors deciding where to retire, including access to their preferred doctors and medical services as well as costs. Health care is the biggest annual expense for seniors, apart from housing and transportation. And while most older people are insured through Medicare, they face out-of-pocket costs for services that Medicare doesn’t cover, such as long-term care and dental services – and those medical bills can add up.

Across the U.S., Medicare spends an average of $12,271 per beneficiary every year, a level that’s expected to increase in the coming years. Medicare spending per person is highest in the three most populous states – Florida ($13,652), California ($13,564) and Texas ($13,458) – and lowest in Vermont ($8,726), Montana ($9,338) and New Mexico ($9,796). Those are government costs, but they suggest that seniors are facing out-of-pocket costs at similar ratios.

Meanwhile, for seniors who want to remain at home as they age, it costs an average of $61,776 per year to have a home health aide, with that rate ranging from $42,900 in West Virginia to $82,940 in Minnesota, according to Genworth Financial data. Even relatively affordable states overall, such Colorado (ranked 6th), can be pricey when it comes to home health care: $76,648 annually. On the other hand, in Louisiana, which ranks 40th overall, health aides are $44,616 per year, on average – more affordable than anywhere except West Virginia.


Overall, seniors should consider their own needs and priorities when deciding where to retire, whether that’s affordability, the weather, proximity to friends and family, access to health care and amenities, safety, cultural connections or transportation. By carefully researching and considering all of these factors, seniors can maximize their retirement income and minimize their living expenses, allowing them to enjoy a comfortable retirement in the community that suits them best.


We used the most recent data for eight metrics to determine the most affordable states for retirees. We used a Z-score distribution to scale each metric relative to the mean across all 50 states and Washington, D.C., and capped outliers at 3. We multiplied some Z-scores by -1, given a higher score was negatively associated with being above the national average. A state’s overall ranking was calculated using its average Z-score across the eight metrics. Here’s a closer look at the metrics we used:

written by:
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Arthur Bretschneider is CEO and Co-Founder of Seniorly. As a third generation leader in the senior living industry, Arthur brings both deep compassion and a wealth of practical experience to his work at Seniorly. Arthur holds an MBA from Haas School of Business and has been featured in the New York Times and Forbes Magazine as a thought leader in the senior living space. Arthur is a passionate and vocal advocate for improving the lives of older adults through community, and believes strongly that structured senior living environments can positively impact the aging experience.

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