![Best States to Retire in 2026 [Ranked by Cost & Tax Benefits]](/_next/image?url=%2Fimages%2Farticles%2Fcost-of-living-comparison.webp&w=3840&q=75)
Quick Answer
The best states for retirement in 2026 are Tennessee (no income tax, COL 89), Florida (no income tax, warm climate), and Alabama (lowest property taxes, COL 87). A retired couple can live comfortably on $3,500 to $4,500/month in these states.
Key Takeaways
- 37 states do not tax Social Security benefits
- 9 states have no income tax at all, benefiting all retirement income
- Property taxes range from 0.39% (Alabama) to 2.23% (New Jersey) of home value
- Healthcare access varies dramatically and should be a top priority for retirees
- The average retiree couple needs $4,300/month nationally, but just $3,200/month in the cheapest states
Choosing the right state for retirement can make your savings last 10 to 15 years longer. The difference between retiring in Hawaii versus Alabama can exceed $50,000 per year. This guide ranks states for retirees using cost of living, tax policies on retirement income, healthcare access, climate, and safety.
For retirement savings benchmarks, see our State of American Retirement Savings report.
10 Best States for Retirement (2026)
| Rank | State | COL Index | Income Tax | SS Tax? | Property Tax Rate |
|---|---|---|---|---|---|
| 1 | Tennessee | 89 | None | No | 0.64% |
| 2 | Florida | 97 | None | No | 0.86% |
| 3 | Alabama | 87 | Up to 5% | No | 0.39% |
| 4 | Georgia | 93 | 5.39% | No | 0.83% |
| 5 | South Carolina | 95 | Up to 6.4% | No | 0.55% |
| 6 | Missouri | 88 | Up to 4.8% | No | 0.91% |
| 7 | Mississippi | 84 | Up to 5% | No | 0.67% |
| 8 | Arkansas | 87 | Up to 4.4% | No | 0.61% |
| 9 | Nevada | 101 | None | No | 0.53% |
| 10 | Texas | 93 | None | No | 1.68% |
Retirement Budget: Affordable vs. Expensive States
| Category | Tennessee (Retired Couple) | National Average | California |
|---|---|---|---|
| Housing | $1,000 | $1,500 | $2,500 |
| Healthcare/Medicare | $600 | $700 | $800 |
| Food | $600 | $750 | $950 |
| Transportation | $500 | $600 | $750 |
| Utilities | $250 | $300 | $350 |
| Taxes | $0 | $350 | $700 |
| Total | $3,200 | $4,300 | $6,200 |
Data Sources
- Bureau of Labor Statistics Consumer Expenditure Survey (2024)
- MERIC Cost of Living Index
- Bureau of Economic Analysis Regional Price Parities
- HUD Fair Market Rents
- U.S. Census Bureau American Community Survey
- Zillow Observed Rent Index (ZORI)
Frequently Asked Questions
What is the best state to retire in on a fixed income?
Mississippi (COL 84) and Alabama (COL 87) offer the lowest overall costs for retirees. Neither state taxes Social Security, and Alabama has the lowest property taxes in the country (0.39%). A retired couple can live on $3,000 to $3,500/month.
Which states do not tax Social Security?
37 states do not tax Social Security benefits, including all 10 on our best-for-retirees list. The 13 states that still tax Social Security include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, Virginia, and West Virginia, though many offer partial exemptions.
Is Florida or Tennessee better for retirement?
Tennessee is cheaper (COL 89 vs. 97) with lower property taxes (0.64% vs. 0.86%) and no hurricane/flood insurance premiums. Florida has better weather year-round and more coastal communities. Both have no income tax. Tennessee is better for budget; Florida for lifestyle.
How much money do you need to retire comfortably?
In affordable states (COL under 90), a couple needs approximately $650,000 to $800,000 in retirement savings plus Social Security. In expensive states (COL over 120), the same couple needs $1.2 million to $1.8 million. See our retirement savings report for detailed benchmarks.
What about healthcare access for retirees?
Healthcare is critical for retirement planning. Alabama and Tennessee have strong regional medical centers (UAB, Vanderbilt). Florida has excellent specialist access in major metros. Mississippi and Arkansas have fewer specialists in rural areas. Always verify proximity to hospitals and specialists before relocating.
Should retirees consider property taxes?
Yes. For a retiree owning a $250,000 home, property taxes range from $975/year in Alabama (0.39%) to $5,575/year in New Jersey (2.23%). That is a $4,600/year difference for the same home value, making property tax rates a major factor in retirement affordability.
What are the worst states for retirement?
Hawaii (COL 170), California (143), and New York (137) are the most expensive for retirees. All three have high income taxes on retirement withdrawals, expensive healthcare, and high property taxes. A couple retiring in Hawaii needs roughly double the savings compared to Tennessee.
Can you retire on Social Security alone?
The average Social Security benefit is approximately $1,900/month ($22,800/year). In Mississippi or Alabama, a single retiree with a paid-off home could potentially cover basic expenses. However, this leaves no margin for healthcare emergencies or home repairs. Supplemental savings are strongly recommended.
Related Guides
- Cheapest States to Live in 2026
- Salary Needed by State
- State of American Retirement Savings 2026
- Average Monthly Expenses in the U.S.
Disclaimer: This article is for informational purposes only. Tax information based on state tax codes as of 2025. Tax laws change frequently. Consult a tax professional before making retirement relocation decisions.
