Retire Smart: The Most Affordable U.S. States for Retirement in 2025
If retirement is right around the corner- or is already knocking on your door- you may have been thinking about where to settle down for those golden years of your life.
At some point in our lives, we all dream about enjoying sunsets on the beach or mountain retreats when we retire. However, the real dream is stretching your retirement savings as far as they will go without sacrificing your comfort or quality of life. For this purpose, choosing an affordable place to settle in may be a good idea.
This article covers some of the most affordable states to retire in 2025. Whether you plan to make a cross-country move or just want to shift to a near-by budget-friendly town, we have quite a few options for you!
Let’s explore what makes a state retirement-friendly; which states top this list in 2025 and a few places worth considering.
- Important Factors to Consider When Choosing a Retirement State
Before anything else, there are a few factors to consider when selecting a place to retire. You need to ensure your new home matches your lifestyle as well as your financial situation. Here are some aspects you must factor in when drawing a comparison.
Cost of Living
This is perhaps the most important factor! Housing, utilities, food, and transportation can weigh heavily on your retirement budget. Some states make it easier to live comfortably on a fixed income, while others might consume your savings faster than you would expect.
Healthcare Access and Affordability
As we age, healthcare becomes a higher priority! You want a state where medical care is not just excellent, but also affordable and accessible. If there are quality hospitals nearby and a range of Medicare Advantage or supplement options- that would be a plus!
Tax Burden
Low tax retirement is the ultimate dream!
The best affordable senior states often come with perks like:
- No state income tax
- No taxes on Social Security benefits
- Low property taxes
- Reasonable sales taxes
Lifestyle & Quality of Life
Affordability is great but it does not mean much if you are not enjoying your surroundings which would include aspects like climate, recreational activities, social communities, and safety. Retirement does not mean just surviving- it is about enjoying your life and thriving too.
2. Best Affordable States to Retire in the U.S. (2025)
We analyzed some recent data on cost of living, tax policies, healthcare, housing, and lifestyle to find the best states this year. Here are five of the low-cost retirement states leading the way in 2025.
Tennessee
Tennessee is consistently at the top for retirees, and in 2025, it seems to be an even more popular choice!
- No state income tax (Social Security and pensions included)
- Affordable housing across the state
- Highly ranked hospitals in Nashville and Memphis
- Low property taxes
- Four-season charm without extreme winters
Best city picks? Try Chattanooga, Knoxville, or Murfreesboro. These offer a great blend of culture, nature, and cost savings.
Texas
Everything is bigger in Texas- including the potential to save.
- No state income tax
- Diverse, budget-friendly housing options
- World-class healthcare systems, particularly in Houston and Dallas
Many strong affordable retirement communities in the USA are in Texas in cities like San Antonio, Lubbock, and Corpus Christi. The wide-open spaces and low cost of living make Texas ideal for retirees who want value and a vibrant life.
Missouri
Missouri may be low on flash, but high on value!
- Very affordable housing and healthcare
- Relaxed lifestyle and beautiful natural scenery
- Low property taxes and cost of living
- Healthcare facilities in urban hubs like St. Louis and Kansas City are surprisingly strong
Springfield and Columbia are particularly popular among retirees looking for that sweet mix of affordability and quality of life.
Florida
Florida, the classic yet affordable region is still on the list and no, living here will not bust your budget.
- No state income tax
- Senior-specific services and communities thrive here
- Excellent healthcare systems and specialists specifically for older adults
- Sunshine nearly every day of the year
Affordable hotspots like Ocala, Lakeland, and Daytona Beach make Florida a popular choice as one of the most affordable senior states.
Iowa
If you are open to a slower pace and strong community ties, consider Iowa- an underrated treasure.
- Low housing costs- one of the most affordable in the U.S.
- Solid healthcare infrastructure
- Low crime and stress levels
- Reasonable taxes and living expenses
Cities like Cedar Rapids and Dubuque are gaining traction for retirees who want to keep things simple and affordable.
3. Other Noteworthy Affordable States
Not every retiree is looking for sunshine and beaches! If you prefer cool mountain air, desert landscapes, or small-town charm, these affordable states deserve a serious consideration for retirement in 2025.
South Dakota
South Dakota is a top contender for low taxes and peaceful living.
- No income tax
- High quality of life
- Strong healthcare system
Bonus- Beautiful outdoor recreation in the Black Hills
Kansas
Kansas is regarded to be steady, stable, and economical.
- Low home prices
- Excellent healthcare affordability
- Small cities like Wichita and Topeka are perfect for retirees wanting to lead a simple life
West Virginia
West Virginia can be a surprisingly great choice if you want scenic views without sky-high costs.
- Super affordable housing
- One of the lowest poverty rates among retirees
- Ideal for outdoor lovers and quiet living
Arkansas
Arkansas is known for its warm climate, low taxes, and relaxed living.
- One of the lowest housing costs in the country
- Affordable retirement communities in USA popping up in places like Hot Springs and Fayetteville
These low-cost retirement states offer incredible value- especially if you are eager to explore life beyond the usual coastal hotspots.
Here is a tabular depiction of the states we have explored so far to help you draw a comparison. However, do remember to do your research before you make a decision.
| State | Income Tax on Retirement | Housing Affordability | Healthcare Access | Cost of Living | Climate Appeal | Notable Cities |
| Tennessee | None | High | Good | Very Low | Mild, four seasons | Chattanooga, Knoxville, Murfreesboro |
| Texas | None | Medium | Excellent (urban) | Low | Hot, sunny | San Antonio, Lubbock, Corpus Christi |
| Florida | None | Medium | Excellent | Moderate | Tropical, humid | Ocala, Lakeland, Daytona Beach |
| Missouri | Yes (low rates) | High | Good | Very Low | Seasonal | Springfield, Columbia, St. Louis |
| Iowa | Yes (some exclusions) | Very High | Good | Low | Cold winters | Cedar Rapids, Dubuque |
| South Dakota | None | Medium | Very Good | Low | Cold winters | Sioux Falls, Rapid City |
| Kansas | Yes | High | Good | Very Low | Seasonal | Wichita, Topeka |
| West Virginia | Yes | Very High | Decent | Low | Seasonal | Morgantown, Charleston |
| Arkansas | Yes (Social Security exempt) | Very High | Moderate | Very Low | Mild winters | Hot Springs, Fayetteville |
| North Carolina | Yes (no tax on SS) | Medium | Very Good | Moderate | Balanced 4 seasons | Hickory, Greenville, Winston-Salem |
4. Final Thoughts
Finding the right retirement state does not mean just chasing the absolute cheapest place. It also means your personal needs including health, finances, lifestyle are in line with what the place offers that you choose to live in. This is what smart retirees do- they think long-term and plan accordingly.
So, if your dream is to enjoy desert sunsets or Appalachian hikes, or simply sip some sweet tea on a southern porch, there is a place for you- where your savings can stretch, your health needs are met, and your soul feels at home.
As you think about the future, remember that retirement planning in the US is not just adding numbers. It should factor in quality of life as well. When you choose the right location, your retirement may be the most gratifying experience of your life
So, as you look ahead to 2025 and beyond, consider these affordable senior states and start planning your retirement journey. The life you have been working hard for is waiting. Now go find the best place to enjoy it!
