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Retirement Planning > Spending in Retirement

12 Cheapest States for Retirees — 2023

Michael S. Fischer By Michael S. Fischer

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How much money to save for retirement is a top-of-mind concern for most Americans at a time when inflation and market volatility are impeding their ability to save.

In fact, 55% of participants in a Bankrate survey reported that their savings are not where they should be, and 35% acknowledged that they are seriously behind. For these, relocating to a state with a low cost of living upon retirement can stretch their savings.

Of course, cost of living is not the sole consideration for retirees in deciding where to live. But emphasizing that factor may well mean trade-offs in other areas that are important to them, such as weather and quality of health care.

To determine the most and least expensive locations for retirees, Bankrate analyzed several data points for the 50 states and assigned a weight to each category:

  • Affordability: 40%
  • Overall well-being: 25%
  • Quality and cost of health care: 20%
  • Weather: 10%
  • Crime: 5%

Researchers calculated affordability by using the 2023 cost-of-living index from the Council for Community and Economic Research, state property and sales tax rates from the Tax Foundation’s rankings for 2023 and cost of homeowner’s insurance by state from ATTOM Data Solutions.

They based wellness rankings on 2020 and 2021 data from the U.S. Census Bureau, and the Sharecare Community Well-Being Index released in 2021.

For health care quality and costs in the rankings, Bankrate considered health care establishments per capita for 2021 from the U.S. Census Bureau, state health system performance and cost of health care per capita across all 50 states.

State health system performance was based on 2022 data from the Commonwealth Fund.

For weather scores, researchers tapped National Oceanic and Atmospheric Administration data, and also analyzed NOAA data for tornado strikes and hurricane landfalls, along with earthquake reports from the U.S. Geological Survey.

For crime, they used the rates of property crimes and violent crimes per 100,000 inhabitants for each state from the FBI’s 2019 Crime in the United States report.

See the gallery for the 12 cheapest states for retirees and how these states rank in other areas.

(Image: Shutterstock)