What is the best state to retire in with low income?

According to a September 2025 analysis by Realtor.com, a typical retiree can live on Social Security benefits alone in only 10 states. Understanding which states offer the best financial climate is crucial, especially when evaluating what is the best state to retire in with low income.

Quick Summary

This guide examines the factors determining the most affordable and financially friendly states for retirees, highlighting top contenders based on cost of living, taxes, and senior care expenses. It helps low-income retirees prioritize their needs to make an informed decision for their golden years.

Key Points

• Affordability Varies Greatly: While popular retiree states like Florida and Texas offer tax benefits, their costs can be prohibitive; affordable options like West Virginia and Mississippi are better for low-income seniors.

• Tax-Friendly vs. Affordable: A low-tax state isn't always the most affordable overall. Low property and sales taxes, along with no tax on Social Security, are crucial for fixed incomes.

• Housing is Key: The cost of housing, whether rent or mortgage-free expenses, significantly impacts retirement finances. States like West Virginia and Arkansas offer some of the lowest housing costs.

• Healthcare Costs Matter: Long-term care and supplemental insurance costs vary by state. Mississippi is known for low senior care expenses, but quality is also a key factor.

• Beyond Finances: Quality of life factors like climate, community, and access to amenities should be considered alongside financial metrics for a fulfilling retirement.

• Research City-Specific Costs: Costs can differ drastically between metropolitan and rural areas within the same state, so research specific cities to find the best fit.

Top Contenders for Low-Income Retirement

Several states consistently emerge as top choices for low-income retirees due to a combination of low costs, favorable tax policies, and affordable senior care. West Virginia, for example, was named the most affordable state for retirees in a 2025 Bankrate study, partly due to low homeownership costs. Mississippi and Arkansas also offer notably low costs, stretching fixed incomes further.

West Virginia

• Low Monthly Costs: With monthly costs around $1,806 for a retiree with a paid-off mortgage, West Virginia offers a significant financial cushion.
• Affordability: Named the most affordable state overall in 2025, driven by modest housing costs.
• Senior Resources: Provides benefits for residents aged 65 and up, including discounted college courses at West Virginia University in Morgantown.

Mississippi

• Tax Advantages: One of the most tax-friendly states for retirees, with no state income tax on retirement income and very low property taxes.
• Senior Care Affordability: Offers some of the lowest annual costs for assisted living and home health aides nationwide.
• Low Living Costs: Combines favorable tax policies with a generally lower cost of living.

Arkansas

• Extremely Low Costs: Ranks as one of the most affordable states for seniors living alone, thanks to a low cost of living, affordable housing, and low property taxes.
• Favorable Senior Metrics: Has some of the lowest healthcare costs in the nation, according to a Caring.com report.
• Housing Affordability: The average rent for a one-bedroom apartment is significantly below the national average.

Key Factors for Choosing a Low-Income Retirement State

Finding the right state on a low or fixed income means looking beyond just the cheapest options and considering a range of factors that impact your long-term financial stability and quality of life.

Cost of Living

The overall cost of living is the most critical factor. This includes everything from housing and groceries to utilities and transportation. A state may have low taxes, but if the daily expenses are high, your fixed income may not stretch far.

Taxes

State tax policies can make a huge difference. Low-income retirees should seek states that do not tax Social Security benefits, or offer generous exemptions on other forms of retirement income like pensions and 401(k) withdrawals. States with no state income tax, such as Florida, Nevada, and Texas, can be attractive, but retirees should also evaluate other taxes like sales and property tax.

Housing Costs

Since housing is often the single largest expense, low monthly mortgage payments or affordable rent are paramount. Some of the most budget-friendly cities for housing include Fort Wayne, Indiana, and Hickory, North Carolina.

Healthcare Quality and Costs

Access to affordable, high-quality healthcare is non-negotiable for most retirees. Costs for Medicare Advantage plans, supplemental insurance, and long-term care can vary significantly by state. While some states offer affordable senior care services, quality can be a key consideration.

Quality of Life

Other important factors include climate, crime rates, and community resources. A state's overall score on quality of life rankings, which includes factors like healthcare, crime, and public resources, is worth researching.

Comparison Table: Best States for Low-Income Retirees

State	Cost of Living Index (approx. 2025)	Income Tax on SS Benefits?	State Income Tax?	Avg. Monthly Housing Cost (No Mortgage)	Notes
West Virginia	Below Average	Will phase out by 2026	Yes, but low	~$398	Most affordable state overall in 2025.
Mississippi	Below Average	No	No	Very low median property taxes.	Highly tax-friendly; low senior care costs.
Arkansas	Below Average	No (as of 2024)	Yes, but has exemptions	~$701 (1-BR rent)	High affordability, low healthcare costs.
Alabama	Below Average	No	Yes, but low	Very affordable; senior tax breaks.	Combines southern charm with low costs.
Delaware	Moderate	No	Yes, but exemptions	Very low; retirees with no mortgage have annual surplus.	No sales tax; tax exemptions on retirement income.
Georgia	Below Average	No	Yes, but exemptions	Very affordable; senior tax breaks.	Mild winters, affordable living, vibrant cities.

Conclusion

Choosing the best state to retire in with low income involves a careful assessment of multiple factors, with affordability being paramount. While West Virginia and Mississippi often top lists for their low costs and favorable tax environments, states like Arkansas, Delaware, and Alabama also offer compelling advantages for retirees on fixed incomes. Ultimately, the ideal state is a balance between low cost of living, tax efficiency, and access to crucial amenities like quality healthcare. By weighing these different aspects based on your personal priorities, you can find a retirement destination that best suits your financial situation and lifestyle. To learn more about specific tax benefits, you can explore resources like SmartAsset's retirement tax guide.

Frequently Asked Questions

Which states have no income tax for retirees?

Nine states do not have a state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. These states can be advantageous for retirees, particularly those with retirement income beyond Social Security.

Can I live on Social Security benefits alone in any state?

A September 2025 analysis found that a typical retiree can live on Social Security benefits alone (if their mortgage is paid off) in only 10 states. Delaware and Indiana topped the list with the largest annual surpluses.

Which states have the lowest property taxes for seniors?

States like Mississippi, Alabama, and Wyoming offer some of the lowest property taxes, which can significantly benefit retirees. Additionally, some states provide homestead exemptions or other programs specifically for seniors to reduce their property tax burden.

How important is a state's sales tax for low-income retirees?

Sales tax is very important because low-income retirees on fixed incomes spend a larger percentage of their budget on goods. States with lower or no sales tax, like Delaware and Oregon, can help stretch a budget further, especially if they exempt groceries.

Is warm weather retirement the most affordable?

Not necessarily. While warm weather states like Florida and Arizona are popular, their rising costs can make them less affordable than anticipated. In fact, some of the most affordable states for retirees have more seasonal climates. A state's overall financial landscape is more important than weather for a low-income retiree.

Do I need to worry about long-term care costs when choosing a state?

Yes, long-term care costs vary dramatically by state and are a major expense. Costs for assisted living and nursing homes can be staggering, so it is wise to research the average costs and the state's Medicaid generosity in a potential retirement state.

What are some hidden costs to consider for a low-income retiree?

Beyond housing and taxes, consider the cost of healthcare, specifically supplemental insurance and prescription drugs, homeowners insurance, and general living expenses like utilities and transportation, which can fluctuate with local economies.