The 10 Cheapest Places to Retire in America
This GoBankingRates list includes great locales across the U.S.
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(This article previously appeared on GoBankingRates.com.)
If you're looking for the best places to retire on a fixed income, you will find many inexpensive places to live in the U.S. To find the cheapest places to retire, GOBankingRates studied three cost-of-living indexes from Numbeo, an independent, data-driven website that tracks cost of living. We then used Bureau of Labor Statistics (BLS) data on average consumer expenditures for Americans aged 65 and older — along with the BLS average cost-of-living, rent and grocery indexes — to further zero in on cheap places for retirees.
In our analysis, we looked at large cities and estimated what older adults can expect to pay, on average.
What we found might surprise you. The list of the cheapest places to retire does not double as a list of dullest places to retire. These cities are as vibrant as they are affordable, with everything from natural beauty and colorful histories to world-class culture and amenities. The following slideshow has The Top 10 Cheapest Places to Retire in America. You can check out the full list here, which is ranked from No. 50 to No. 1.
10. Kansas City, Mo.
- Annual expenditures: $40,984
- Annual amount spent on rent: $7,366
- Annual amount spent on groceries: $3,045
Kansas City is centrally located in the country, which makes for easy family visits from any state. It also is a good choice for its transportation within the city. It has several bus systems, but also features a bike-sharing system. Just swipe your member card or credit card and a bike is unlocked for you. Ride it to your destination and turn it in.
The city also made the 2016 U.S. News and World Report list of best affordable places to live, finishing at No. 19.
9. Rochester, N.Y.
- Annual expenditures: $40,586
- Annual amount spent on rent: $7,421
- Annual amount spent on groceries: $3,067
Although sales and property taxes are relatively high in New York, Social Security and public pensions are not taxed. Also, income from private pensions and retirement accounts is deductible up to $20,000. If you want a retirement spot that has four distinct seasons, the city of Rochester is it. The summer average temperature is 78 degrees Fahrenheit, while the winter average temperature is 32.
No. 8 Salt Lake City
- Annual expenditures: $40,529
- Annual amount spent on rent: $7,619
- Annual amount spent on groceries: $3,066
If you want a little altitude with your retirement, Salt Lake City might be a great call. The city lies at 4,330 feet above sea level, with the ski parks at 7,000 to 8,000 feet. The good news: Thanks to the world-class skiing and white winters, your family will surely want to visit during the holidays.
No. 7 Omaha, Neb.
- Annual expenditures: $40,008
- Annual amount spent on rent: $7,461
- Annual amount spent on groceries: $3,046
It’s a good thing Omaha has such a low cost of living and modest grocery costs, because Nebraska is not the tax-friendliest state for older adults. Social Security income that is taxed by the federal government is also fully taxed here. In addition, it is one of the few states that has an inheritance tax.
No. 6 Albuquerque, N.M.
- Annual expenditures: $39,641
- Annual amount spent on rent: $6,929
- Annual amount spent on groceries: $2,909
With a moderate annual average high temperature of 68.8 degrees Fahrenheit and 310 days of sunshine a year, Albuquerque enjoys a dry high-desert heat that many older adults might enjoy. And if you want to get even higher, Albuquerque is known for its hot air ballooning. The city also is a destination for those who love golf and spas.
No. 5 Mobile, Ala.
- Annual expenditures: $39,566
- Annual amount spent on rent: $6,816
- Annual amount spent on groceries: $3,031
Got rain? Well, if you’re moving to Mobile, we certainly hope you want some during retirement. The city is the rainiest place in the country, according to Business Insider. Its average annual rainfall is 66.22 inches — that’s 5.5 feet, folks.
On the plus side, Mobile has famous Southern hospitality and the oldest Mardi Gras celebration in America.
No. 4 Tucson, Ariz.
- Annual expenditures: $39,402
- Annual amount spent on rent: $6,755
- Annual amount spent on groceries: $3,052
Looking for a great place to live a simple life? According to AARP The Magazine, Tucson is in the top 10 cities to do just that. An hour from the border of Mexico, this city is ringed by wilderness and enjoys 286 sunny days per year. And although other types of retirement income are taxed, Social Security is not.
No. 3 Oklahoma City
- Annual expenditures: $39,248
- Annual amount spent on rent: $7,282
- Annual amount spent on groceries: $3,109
With one of the lowest costs of living in the nation, Oklahoma City is an attractive spot for older adults on a budget. Oklahoma also fully exempts Social Security from taxation and provides a $10,000 deduction for other types of retirement income, such as 401(k)s or pensions. Sales taxes are high, but property taxes are low.
No. 2 San Antonio
- Annual expenditures: $38,210
- Annual amount spent on rent: $7,729
- Annual amount spent on groceries: $2,873
The home of the Alamo is also the place of very low taxation for older adults. There is no state tax taken on Social Security income or on withdrawals from retirement accounts or pensions. Add those factors to warm weather and a low cost of living, and you can see why San Antonio is our runner-up big city in which to retire.
No. 1 Athens, Ga.
- Annual expenditures: $36,999
- Annual amount spent on rent: $6,781
- Annual amount spent on groceries: $2,633
The top spot for affordable places to retire on our list goes to the Georgia city of Athens, about an hour east of Atlanta. Its low cost of living and very low annual average grocery cost helped put Athens at the front of the pack.
Even better, Georgia is a very friendly tax state for older adults. It does not take taxes from Social Security income and there is no state inheritance or estate tax. If you are older than 64, a $65,000-per-person deduction on other types of retirement income applies. Property taxes and sales taxes also are low. Congratulations, Athenians.
Methodology: GOBankingRates.com examined three cost of living factors for 81 U.S. cities from Numbeo on Sept. 12, 2016: 1) cost of living index, 2) rent index and 2) grocery index. Then, we compared each city's index to the average annual expenditures from Americans aged 65 and over from the Bureau of Labor Statistic's Consumer Expenditures Survey, 2014-2015 to come up with a formula to predict annual expenses in each city.
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