If you’re looking at living as frugally as possible in your retirement, you may be considering moving to a state where the cost of living is more affordable.
In the United States, the average retiree needs about $904,000 to cover their living expenses in retirement. Some states, like Hawaii, can cost twice that amount, but other states are significantly less expensive.
Methodology
We looked at data compiled by HowMuch.net, based on figures from the Bureau of Labor Statistics along with cost of living and life expectancy data.
The yearly figure needed for retirement comes from the BLS’ 2018 Consumer Expenditure Survey. The expenditures HowMuch considered were those of the age group “65 years or more”.
To obtain the total amount required for a comfortable retirement, HowMuch used IHME-based life expectancy figures published by National Geographic. They then subtracted the average retirement year published on MoneyTalks to the previous figure and multiplied it by the state-adjusted yearly expenditures, to obtain the total amount required to retire.
We then looked at the states that have a cost of living index that is at most 92% of the national average. There are 17 states that meet that criteria.
Most retirees retire on Social Security benefits to some extent to cover their living expenses. You can find the average Social Security payment in every state here. While it rarely covers everything, many people rely on Social Security to help make ends meet. That’s why it’s important to be sure you understand how to maximize your benefits. Here are four mistakes you’ll want to avoid as you decide when to start taking Social Security.
Here are the most affordable states for retirement, with the lowest cost of living for retirees, from least to most expensive:
Mississippi
Average retirement age: 63
Cost of living index: 0.86
Average annual expenses: $44,758
Life expectancy: 74.5
Retirement funds needed: $617,661
Oklahoma
Average retirement age: 62
Cost of living index: 0.87
Average annual expenses: $45,016
Life expectancy: 75.4
Retirement funds needed: $723,859
Arkansas
Average retirement age: 62
Cost of living index: 0.88
Average annual expenses: $45,274
Life expectancy: 75.4
Retirement funds needed: $728,010
Missouri
Average retirement age: 63
Cost of living index: 0.88
Average annual expenses: $45,584
Life expectancy: 77.1
Retirement funds needed: $771,281
Tennessee
Average retirement age: 64
Cost of living index: 0.89
Average annual expenses: $45,894
Life expectancy: 76
Retirement funds needed: $660,870
Alabama
Average retirement age: 62
Cost of living index: 0.89
Average annual expenses: $46,049
Life expectancy: 75
Retirement funds needed: $712,832
Michigan
Average retirement age: 62
Cost of living index: 0.89
Average annual expenses: $46,203
Life expectancy: 77.6
Retirement funds needed: $864,929
Kansas
Average retirement age: 65
Cost of living index: 0.90
Average annual expenses: $46,255
Life expectancy: 78.2
Retirement funds needed: $732,681
Texas
Average retirement age: 65
Cost of living index: 0.91
Average annual expenses: $47,236
Life expectancy: 78.5
Retirement funds needed: $765,223
Indiana
Average retirement age: 63
Cost of living index: 0.91
Average annual expenses: $46,720
Life expectancy: 77
Retirement funds needed: $784,891
Georgia
Average retirement age: 63
Cost of living index: 0.91
Average annual expenses: $46,771
Life expectancy: 77.2
Retirement funds needed: $796,984
New Mexico
Average retirement age: 62
Cost of living index: 0.91
Average annual expenses: $47,184
Life expectancy: 77.6
Retirement funds needed: $883,291
Kentucky
Average retirement age: 62
Cost of living index: 0.92
Average annual expenses: $47,339
Life expectancy: 75
Retirement funds needed: $738,492
Ohio
Average retirement age: 63
Cost of living index: 0.92
Average annual expenses: $47,597
Life expectancy: 76.6
Retirement funds needed: $776,788
West Virginia
Average retirement age: 61
Cost of living index: 0.92
Average annual expenses: $47,546
Life expectancy: 74.8
Retirement funds needed: $787,357
Nebraska
Average retirement age: 65
Cost of living index: 0.92
Average annual expenses: $47,649
Life expectancy: 79.1
Retirement funds needed: $806,220
Iowa
Average retirement age: 65
Cost of living index: 0.92
Average annual expenses: $47,494
Life expectancy: 79.4
Retirement funds needed: $820,698