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Retirement planning guide
Last updated: 26 September 2026
The best state for retirement depends on your budget, health, family, weather needs, and how much driving you can handle. This guide compares 10 states that fit different retirement plans. It is a short list for deeper checking, not a promise that one state is best for everyone.
Bottom Line
If low monthly costs are your first concern, start with Iowa, West Virginia, Missouri, Arkansas, Nebraska, and Kentucky. If warm weather matters more, compare Florida and Arizona carefully. New Hampshire and Rhode Island can fit people who want New England access and can handle higher living costs.
Do not move because of one tax rule. Price the exact county, check your doctors and health plan, review climate risks, and see what local aging services exist before you sign a lease or buy a home.
Start Here
- Set your monthly limit. Add housing, insurance, utilities, food, transportation, health care, and travel to family.
- Choose two or three counties. State averages can hide large local differences.
- Test the move before buying. If possible, visit during the hardest season and rent first when you are unsure.
If you want a cost-first comparison, see our low-cost states guide. If medical access is the deciding factor, compare our senior healthcare guide.
Quick Comparison of 10 Retirement States
The cost figures below use the MERIC cost index for the second quarter of 2026. An index below 100 is below the reported U.S. average; above 100 is above it. MERIC averages participating cities and metro areas, so your county can be different.
| State | Cost index | Strong fit | Main caution |
|---|---|---|---|
| Iowa | 86.1 | Low costs and retirement-income relief | Cold winters and rural travel |
| West Virginia | 87.0 | Low housing costs and Social Security tax relief | Specialists can be far away |
| Missouri | 88.2 | Low costs and several metro choices | Local taxes and costs vary |
| Arkansas | 89.0 | Lower costs and warmer weather | Heat and county-level service gaps |
| Nebraska | 90.1 | Lower costs and larger-city health systems | Weather and long rural drives |
| Kentucky | 94.0 | Below-average costs and retirement tax breaks | Rural access varies |
| Florida | 100.8 | Warm weather and no personal income tax | Insurance and storm risk |
| New Hampshire | 108.5 | No current wage or I&D tax | Higher housing and utility costs |
| Arizona | 108.6 | Dry climate and many retirement areas | Extreme heat and higher housing index |
| Rhode Island | 110.9 | Compact state, coastal access, New England services | Higher overall costs |
Cost indexes are planning clues, not a personal budget. Rent, property tax, home insurance, Medicare plan choices, transportation, and family travel can change the result.
What Has Changed
- The comparison now uses second-quarter 2026 cost-of-living data instead of older estimates.
- West Virginia’s Social Security tax phase-in is complete for tax year 2026, including taxpayers above the earlier income thresholds.
- Iowa’s 2026 individual income-tax rate is now 3.8%, while qualifying retirement income remains excluded for eligible taxpayers.
- New Hampshire’s former Interest and Dividends Tax remains repealed for tax periods beginning on or after January 1, 2025.
How This List Works
This is not a 1-to-10 ranking. A single score can hide the thing that matters most to you. A low-cost state may still be a poor fit if you need a specialist nearby. A warm state may become expensive after insurance, cooling, or housing costs.
For each state, we look at four practical questions: Is day-to-day living reasonably affordable? How does the state treat common retirement income? Can you reach health care and local senior services? What weather or disaster risks could change your budget?
Before moving, check the actual town. Use Medicare Care Compare to review nearby hospitals and other providers. Use the FEMA risk map to see natural-hazard risk. Then use the Eldercare Locator to find the Area Agency on Aging that serves the county.
Taxes matter, but they are personal. Social Security, pensions, retirement-account withdrawals, work income, homeownership, and filing status can change the answer. A tax-friendly state can still be costly if housing or insurance is high.
Lower-Cost States Worth Comparing
Iowa
Iowa’s Q2 2026 cost index was 86.1, well below the U.S. benchmark in the MERIC data. It can fit retirees who want lower housing costs, midsize cities, and quieter communities.
Iowa excludes qualifying retirement income for taxpayers age 55 or older, certain disabled taxpayers, and qualifying survivors under its retirement-income guidance. The state also confirmed a 3.8% individual income-tax rate for 2026 in its 2026 tax-rate notice.
Reality check: Winter weather can make driving and home upkeep harder. Compare snow removal, transportation, and distance to specialists. Review Iowa senior assistance before choosing a county.
West Virginia
West Virginia’s Q2 2026 cost index was 87.0. Lower-cost housing can be attractive for retirees who prefer mountain towns and smaller communities.
The biggest tax update is Social Security. West Virginia’s Social Security modification reaches 100% for tax year 2026, including people above the earlier federal adjusted gross income thresholds. The state also enacted a 2026 income-tax rate cut that applies retroactively to January 1, 2026; see the 2026 rate notice.
Reality check: A low-cost town can be far from a hospital or specialist. Check actual drive times. Then review West Virginia senior help.
Missouri
Missouri’s Q2 2026 cost index was 88.2. It offers a mix of smaller towns, lake areas, and larger medical markets around St. Louis, Kansas City, Springfield, and Columbia.
Missouri’s current pension and Social Security FAQ says eligible taxpayers age 62 or older can deduct 100% of taxable Social Security benefits. Public and private pension rules are separate, so check the official worksheet for your income type.
Reality check: Local taxes, housing, and transportation can vary a lot. Price the county, not just the state. See Missouri senior assistance for state and local starting points.
Arkansas
Arkansas had a Q2 2026 cost index of 89.0. It may suit retirees who want lower costs, warmer weather, lakes, and small or midsize communities.
The latest Arkansas individual-income-tax instructions available during this update say Social Security benefits are exempt from state income tax and describe limited exclusions for certain pension and retirement distributions. Check the current Arkansas tax instructions, and confirm 2026 filing rules when final forms are released.
Reality check: Summer heat, humidity, and travel distance matter. Ask how far you will be from a hospital, grocery store, and pharmacy. Review Arkansas senior help.
Nebraska
Nebraska’s Q2 2026 cost index was 90.1. Omaha and Lincoln give retirees access to larger health systems, while many smaller communities have lower housing costs.
Nebraska’s Department of Revenue says Social Security benefits included in federal adjusted gross income are fully excluded from Nebraska income starting with tax years beginning on or after January 1, 2024. The current rule is described in the state’s legislative tax changes.
Reality check: Snow, wind, heat, and long rural drives can be hard as you age. Compare services near the exact ZIP code. See Nebraska senior assistance.
Kentucky
Kentucky’s Q2 2026 cost index was 94.0, still below the U.S. benchmark in the MERIC data. It may fit retirees who want four seasons, smaller cities, lakes, and lower housing costs than many coastal areas.
Kentucky does not tax Social Security benefits. Current Department of Revenue guidance also provides a pension-income exclusion, though rules can differ for some government pensions. Check the Kentucky income-tax page before using a tax estimate in your move budget.
Reality check: Rural areas may cost less but have fewer transportation and specialist options. Review Kentucky senior help before choosing a town.
Warm-Weather States Worth Comparing
Florida
Florida’s Q2 2026 cost index was 100.8, close to the national benchmark. It remains attractive to retirees who want warm winters, many age-restricted communities, and a large senior-service network.
Florida does not impose a personal income tax, according to the Florida Department of Revenue. That can simplify one part of retirement planning, but it does not make the state low-cost overall.
Reality check: Home and flood insurance, storm exposure, rent, and traffic can change the budget. Compare inland and coastal counties separately. Review Florida senior assistance before moving.
Arizona
Arizona’s Q2 2026 cost index was 108.6. Its housing index was above the national benchmark, so it should not be treated as a low-cost choice just because some retirement communities look affordable.
Arizona excludes Social Security retirement benefits from state gross income. The rule appears on the Arizona individual-tax page. Other pension, investment, and work income can be treated differently.
Reality check: Extreme heat affects health, utility bills, cars, and the ability to walk outside. Check cooling costs, shade, transportation, and backup power. See Arizona senior help.
Special-Fit States
New Hampshire and Rhode Island are not low-cost picks in the Q2 2026 index. They can still make sense if you have family nearby, want New England access, or have a strong housing plan.
New Hampshire
New Hampshire’s Q2 2026 cost index was 108.5. Housing and utilities were both above the national benchmark in the MERIC data.
New Hampshire does not tax reported W-2 wages, and its former Interest and Dividends Tax was repealed for tax periods beginning after December 31, 2024. The Department of Revenue confirms the repeal on its Interest and Dividends page.
Reality check: Higher housing costs, winter driving, and heating bills can be difficult on a tight fixed income. Review New Hampshire senior help before committing.
Rhode Island
Rhode Island’s Q2 2026 cost index was 110.9. Its small size can make hospitals, family, coastal areas, and services easier to reach than in a large rural state, but overall costs are higher than the national benchmark.
Rhode Island has retirement-income modifications with age and income rules. The current retirement-income guide explains the pension and annuity modification and its qualifying rules. Do not assume every retiree qualifies.
Reality check: Housing and utility costs need close checking. Compare your exact town and property-tax bill. Review Rhode Island senior help.
How to Choose the Right State
Pick the state that still works in a bad month, not just a good month. Make one budget for normal life and a second budget that includes a rent increase, insurance increase, large car repair, or extra medical travel.
| Your main need | Check first | Question to ask |
|---|---|---|
| Lower monthly bills | Rent, tax, insurance, utilities | Can I pay this every month on fixed income? |
| Better health care | Doctors, hospitals, specialists | Can I reach needed care without a long drive? |
| Warmer weather | Heat, storms, insurance | Can I handle the hardest summer month? |
| Family support | Real travel time | Who can actually help me each week? |
| Aging in place | Home layout and transportation | Can I live here if I stop driving? |
How to Start Without Wasting Time
Do not call ten agencies before you know your target county. Choose one or two ZIP codes first. Then compare the same costs and services in each place.
- Write down all monthly income after federal withholding.
- List rent or mortgage, property tax, insurance, utilities, groceries, transportation, prescriptions, and debt payments.
- Bring Medicare, Medicaid, prescription, and health-plan information.
- Keep Social Security and pension award letters.
- List your doctors, specialists, pharmacy, and nearest hospital needs.
- Check whether you would need a car for groceries, worship, appointments, and social activities.
- Ask what local programs require residency before you can apply.
| Who to contact | Ask about | Why it matters |
|---|---|---|
| Area Agency on Aging | Meals, rides, caregiver help, home services | Services vary by county |
| County tax office | Senior property-tax relief | Local rules can change ownership costs |
| Health plan | Doctors, drugs, pharmacies, county coverage | Plan networks vary by location |
| Housing provider | Open lists, rent, deposits, wait times | Affordable housing may not be immediately available |
Phone script: aging services
“Hello. I am thinking about moving to your county. What transportation, meals, caregiver, and home-support services serve this ZIP code? Do I need to live there before I can apply?”
Phone script: property tax
“I am an older homeowner comparing places to retire. What exemptions, credits, freezes, or deferrals may apply here, and what age, income, ownership, and filing-date rules should I check?”
Phone script: health plan
“I may move to this county. Can you help me check whether my doctors, hospital, prescriptions, and pharmacies are covered here, and whether I need to change plans after the move?”
Phone script: housing
“I am looking for senior or income-based housing. Is the list open now, what costs should I expect, and what documents do I need to apply?”
Reality Checks Before You Move
- State averages hide local problems. A low state cost index does not mean every city is cheap.
- Health care is local. A state can have excellent hospitals and still leave rural residents far from specialists.
- Taxes are only one bill. Insurance, rent, property tax, utilities, and transportation may matter more.
- Climate affects money and health. Snow, heat, wildfire, flooding, tornadoes, and hurricanes can change insurance, power, and travel needs.
- Your plan must work without driving. Think about age 75 or 80, not only the year you move.
Common Mistakes to Avoid
- Moving after one vacation. Visit during the hardest season.
- Buying before testing the area. Rent first when the move is uncertain.
- Assuming tax-free means cheap. Add every major monthly bill.
- Ignoring health-plan geography. Check networks and drug coverage before the move.
- Counting on family without a plan. Be clear about who can drive, visit, or help with paperwork.
- Assuming senior housing is open. Ask about the current list before you need it.
If Your Move Plan Gets Stuck
If the housing list is closed, a benefit office says you are not eligible, or the paperwork feels too hard, ask for the reason in writing. Then call the local aging office or a trusted benefits counselor and ask what other route fits your situation.
If you are moving because you may lose housing, cannot buy food, or face a utility shutoff, use 211 for local emergency resources instead of waiting for a long-term retirement move to solve the immediate problem.
Backup plans can include renting before buying, choosing a cheaper county in the same state, living closer to a regional hospital, applying for housing before a crisis, or delaying the move until you have a stronger cash reserve.
Resumen en Español
No existe un solo “mejor estado” para jubilarse. Compare el costo total de vivienda, seguro, servicios públicos, transporte y atención médica. También revise impuestos, riesgos del clima y la distancia a familiares.
Antes de mudarse, elija uno o dos condados. Llame a la agencia local para personas mayores y pregunte por transporte, comidas y ayuda en el hogar. Confirme que sus médicos, medicinas y plan de salud funcionen en el nuevo condado. Si no conoce bien el lugar, alquilar primero puede reducir el riesgo.
Frequently Asked Questions
What is the best state for retirement in 2026?
There is no single best state for every retiree. Iowa, West Virginia, Missouri, Arkansas, Nebraska, and Kentucky are strong cost-first choices in the Q2 2026 data. Florida and Arizona may fit warm-weather goals. New Hampshire and Rhode Island can fit people with a strong New England reason and a larger budget.
Which state on this list has the lowest cost index?
Iowa is lowest among these 10 states in the Q2 2026 MERIC data, with an index of 86.1. West Virginia follows at 87.0. Your city or county can still cost more or less than the state index.
Should I move to a state with no income tax?
Not for that reason alone. Florida has no personal income tax, but housing, insurance, property tax, utilities, and transportation can offset that benefit. Compare your full monthly budget.
Is West Virginia more tax-friendly for Social Security in 2026?
Yes. West Virginia’s Social Security modification reaches 100% for tax year 2026, including taxpayers above the earlier income thresholds. Other retirement income can follow different rules.
Is Florida still a good retirement state?
Florida can still fit retirees who want warm winters, many senior communities, and no personal income tax. It is not automatically cheap. Check insurance, housing, storm risk, traffic, and health care in the exact county.
Should I rent before buying?
Renting first is often safer when you do not know the area well. It lets you test weather, doctors, stores, traffic, community life, and real monthly costs before making a larger commitment.
About This Guide
Sources: This guide uses official federal, state, local, and other high-trust nonprofit and community sources linked in the article.
Editorial note
This guide is produced under the GFS Editorial Standards using official and other high-trust sources. GFS is not affiliated with a government agency and is not a substitute for official agency guidance. Individual eligibility outcomes cannot be guaranteed.
Corrections
Despite careful verification, errors may occur. Readers may email info@grantsforseniors.org with corrections.
Disclaimer
This article is for informational purposes only and is not legal, financial, medical, tax, disability-rights, immigration, or government-agency advice. Program rules, policies, funding, and availability can change. Readers should confirm current details directly with the responsible official program before acting.
Last updated: 26 September 2026 · Next review: 26 January 2027
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