10 States with the Lowest Savings Needed to Retire at 50
Retiring at 50 requires careful planning about a number of things. One of these is choosing where you will live. The cost of living can vary dramatically across the U.S., and things like taxes, housing, food, and transportation can all impact how far your savings will stretch. Selecting a state where living expenses are lower can help ensure you do not outlive your savings and can enjoy your retirement without financial stress. It is also essential to be aware of wealthier states, as settling there may interrupt your retirement planning.
While a financial advisor can help guide you through these decisions, this article will also highlight some of the best states to retire in the United States. This way, you have the information you need to make a smart choice for your future.
Table of Contents
Below are 10 cheapest states to live in for retirement as per a recent survey:
1. Mississippi – Cost of living index – 86.0
Popularly known as the birthplace of the blues, Mississippi is the most affordable state for retirees planning to retire early at 50. The state has the lowest cost of living index at 86.0. Housing is particularly favorable, with an index of 69.5, which makes the state ideal for retirees. The utilities are at 87.6, and transportation is at 91.0. While groceries are slightly higher at 94.9 in the state, they remain affordable given the fact that other expenses in the state are considerably low.
With an annual cost of living of $51,053.29, retirees in Mississippi can rely on their Social Security income of $22,437.24 to cover nearly half their expenses. After factoring in Social Security, retirees will need $28,616.05 annually, which translates to around $715,401 in savings to retire comfortably at age 50. The state is a true reflection of Southern charm and can be ideal for retirees looking for a rooted but fulfilling life.
2. Oklahoma – Cost of living index – 86.9
Oklahoma’s cost of living index is just slightly higher than Mississippi’s, at 86.9. The state offers an excellent option for early retirees, with housing costs in the state at 70.6, making it ideal for those looking to settle down for retirement. Oklahoma City and Tulsa are the state’s main economic hubs and home to almost two-thirds of its population. Affordable transportation, with a score of 90.9 and a grocery index of 94.6, helps balance out the slightly higher utility costs, which come in at 97.0. The state offers the right balance to help ensure that retirees can maintain a comfortable lifestyle without feeling overwhelmed by their expenses.
The annual cost of living in Oklahoma is $49,954.75, and with a Social Security income of $22,437.24, retirees will need around $27,517.51 more in savings annually. If you plan to retire at 50 and settle in Oklahoma, you will need about $687,938 in savings.
3. Kansas – Cost of living index – 87.2
Kansas is another one of the least expensive states to live in the country, which makes it a strong contender for retirees settling down at 50. The state has an overall cost of living index of 87.2. Housing costs are also affordable, with a low index of 70.0. This means you can easily consider buying a home or renting affordably in the state. Although utility costs are slightly higher than in other states at 102.0, the costs of groceries and transportation remain reasonable, at 95.0 and 93.9, respectively. Kansas is famous for its rich history, home to numerous museums and historical tours, and, of course, its connection to The Wizard of Oz, which has become a cultural icon tied to the state. The annual cost of living in Kansas is $50,475.11, with Social Security covering $22,437.24. After factoring in Social Security income, retirees would need an additional $28,037.87 annually, which means having around $700,947 in savings would be sufficient to retire at 50.
4. Alabama – Cost of living index – 88.2
Alabama ranks as an attractive option for retirees, with a cost-of-living index of 88.2. Alabama, known as ‘The Heart of Dixie,’ has Montgomery as its capital and Birmingham as its largest city. The state played a significant role in the American Civil War, with Montgomery serving as the Confederacy’s first capital. Alabama is also well-known for its affordable cost of living and signature Southern hospitality, making it an appealing choice for families.
Housing costs are particularly affordable in the state, with an index of 69.8. Utilities, at 101.9, are slightly higher than in some other low-cost states, but transportation costs, at 90.5, help keep overall expenses reasonable. Grocery costs are also manageable at 97.1, so retirees can suitably cover their essential needs without straining their budgets. Alabama offers a relaxed lifestyle with a moderate climate. With an annual cost of living of $50,937.66, retirees can expect their Social Security income to cover $22,437.24, leaving $28,500.42 in annual expenses to be covered by other savings. To retire early at 50, you would require a nest egg of around $712,510 in total.
5. West Virginia – Cost of living index – 89.3
West Virginia, known as the ‘Mountain State,’ is famous for its stunning mountain landscapes and rich cultural heritage. Among its most iconic landmarks is Seneca Rocks, which happens to be a major tourist attraction and a standout natural wonder. Itiscelebrated for its scenic beauty and offers a unique blend of history and Appalachian culture. West Virginia is also one of the cheapest states to retire in.The state’s cost of living index of 89.3 makes it a top choice for retirees. West Virginia offers affordability without sacrificing your quality of life.
West Virginia has incredibly low housing costs, with a housing index of 69.3. Utility costs are also reasonable, at 95.0, while transportation sits at 100.1. Groceries, at 98.3, remain affordable. For those looking to retire early, West Virginia offers a peaceful environment. The annual cost of living in West Virginia is $48,451.48, and after a Social Security income of $22,437.24, you will need to cover $26,014.24 annually from your savings pool. With about $650,356 in savings, you can comfortably enjoy your retirement years in West Virginia.
6. Georgia – Cost of living index – 89.3
Georgia is known as ‘The Peach State’ and is famous for its warm, temperate climate and rich agricultural industry. The state is also historically relevant, with numerous historic sites, including Atlanta, the birthplace of Martin Luther King Jr. Georgia’s blend of Southern charm and vibrant culture makes it a notable destination for tourists as well as retirees who wish to settle down for a charming yet comfortable life. Georgia boasts a cost-of-living index of 89.3. While housing costs sit at a modest 76.6, which is slightly higher than some other states in this list, the state is able to maintain its overall affordability. It has low utility costs at 86.9 and similarly affordable transportation expenses at 90.9.
Georgia offers great healthcare facilities, making it a perfect place for retirees who want an affordable lifestyle. Moreover, Georgia’s annual cost of living is approximately $52,787.83, and with an average annual Social Security income of $22,437.24, you will need about $30,350.59 in savings to cover remaining expenses. To retire comfortably at 50 in Georgia, you will need around $758,765 in savings, which is quite achievable given the lower cost of living.
7. Missouri – Cost of living index – 89.9
Missouri, with a cost-of-living index of 89.9, stands out as one of the cheapest states to live in for retirement. Housing costs, at 79.2, although slightly higher than other states in the top 10, are still affordable and can be suitable for retirees on a limited budget. Utilities and transportation are also affordable, at 95.9 and 95.0, respectively. The state is centrally located and is famous for being a center of beer brewing. It also has a lively cultural scene that includes theaters and attractions like Silver Dollar City. Missouri’s capital is Jefferson City, while Kansas City and St. Louis are its largest cities. Retirees can consider these for a vibrant cultural scene or settle in rural areas of the state for a quieter life. The state is also home to American literature icon Mark Twain and has a rich cultural heritage.
Missouri’s annual cost of living is approximately $51,168.93, with retirees needing around $28,731.69 annually after Social Security income. For those retiring at 50, having $718,292 in savings should cover their future retirement expenses.
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8. Iowa – Cost of living index – 89.9
Iowa is known for its beautiful countryside, parks, and unpredictable weather. It is the nation’s top pork producer and is said to have more pigs than any other state. As the 26th largest state by area, Iowa is also proudly referred to as the ‘Food Capital of the World’. Iowa shares its cost-of-living index of 89.9 with Missouri. It offers an equally affordable yet different kind of lifestyle to retirees. It is known for its strong sense of community and can be ideal for retirees who are looking for a quiet life after retirement.
Housing costs in Iowa are particularly appealing, with a housing index of 73.4, which is one of the lowest on this list. This makes Iowa especially attractive to retirees who wish to own a home but still want to keep their living expenses low. Additionally, the state’s utilities and transportation costs are at 94.8 and 98.1, respectively. Iowa’s healthcare facilities are another major draw for retirees. The annual cost of living in Iowa is $52,094.02, and after factoring in Social Security income, retirees will need approximately $29,656.78 annually. You will need savings of around $741,419 to retire comfortably at 50 in Iowa.
9. Arkansas – Cost of living index – 90.1
Arkansas is famous for its beautiful lakes, rivers, and hot springs, as well as its extreme weather and frequent storms. It is an affordable destination for retirees and boasts diverse wildlife, including white-tailed deer, elk, and bald eagles. Notably, Arkansas is home to the only public diamond mine in the United States. It is also where renowned author John Grisham once lived, adding to the state’s cultural legacy. Arkansas, with a cost-of-living index of 90.1, offers a blend of affordability and natural beauty, making it a great destination for retirees.
Housing costs in Arkansas are attractively low at 76.7. Utility and transportation costs are also reasonable, at 95.4 and 90.3, respectively, which can help retirees manage their day-to-day expenses efficiently. The annual cost of living in Arkansas is around $51,168.93, with retirees needing approximately $28,731.69 annually after Social Security. To retire at 50 in Arkansas, you would need savings of about $718,292. The state’s combination of low costs and a high quality of life, especially for outdoor enthusiasts, makes Arkansas a strong contender for those looking to retire at 50 on a budget.
10. Tennessee – Cost of living index – 90.4
Tennessee rounds out the top 10 cheapest states to live in the country with a cost-of-living index of 90.4. Housing costs in Tennessee are reasonable at 82.7, while transportation and utilities also come in at relatively low levels – 90.3 and 93.6, respectively. Tennessee is known for its rich musical heritage. It is famous for its iconic cities like Nashville and Memphis, which are central to the country music and blues scenes. The state boasts amazing national parks, including the Great Smoky Mountains. Additionally, Tennessee is known as the birthplace of Mountain Dew and is celebrated for its rich tradition of whiskey production, particularly Tennessee whiskey.
For retirees seeking a combination of urban excitement and natural beauty, Tennessee delivers plenty of cultural activities. Tennessee’s annual cost of living is approximately $52,209.65, and retirees will need about $29,772.41 annually after factoring in Social Security income. To retire at 50 in Tennessee, a savings pool of approximately $744,310 would be sufficient.
Tax friendly states
Taxes are a big part of your retirement expenses. Hence, apart from the cost of living, you must also focus on the taxes levied in the state where you settle down. The most tax-friendly states for retirees include:
1. Alaska: There are no state taxes on retirement income or capital gains in Alaska. Additionally, Alaska does not impose any inheritance or estate taxes. While property taxes stand at 1.04% of property value, the overall tax burden is only 4.6% of income.
2. Nevada: Nevada stands out as another excellent choice for retirees. The state does not tax retirement income or capital gains. In terms of property taxes, Nevada has a relatively low rate of 0.59%. Although the state sales tax is 8.236%, the overall tax burden as a percentage of income is 9.6%.
3. Wyoming: Wyoming is known for its low tax burden. Like Alaska and Nevada, Wyoming does not tax retirement income or capital gains. Property taxes are quite reasonable, at only 0.56% of property value. Additionally, the state has a sales tax rate of 5.441%, contributing to an overall tax burden of 7.5% of income.
4. South Dakota: South Dakota does not impose taxes on retirement income or capital gains. Property taxes in South Dakota are slightly higher than in some neighboring states, at 1.17%. With a sales tax rate of 6.111%, the overall tax burden amounts to 8.4% of your income.
5. Texas: Texas is well known for not imposing any state income tax. While property taxes in Texas are higher at 1.68%, the absence of state income taxes helps keep the overall tax burden reasonable at 8.6% of income. Additionally, the state imposes a sales tax rate of 8.200%.
6. Tennessee: Tennessee does not levy taxes on retirement income or capital gains. Property taxes are relatively low, at 0.67%, although the sales tax is slightly higher at 9.548%. Overall, Tennessee has a tax burden of 7.6% of income.
Below are some of the most expensive states to retire in:
The most expensive states for retirees are primarily located in the Northeast and West Coast, where the cost of living is significantly higher than the national average. States like Massachusetts, California, and New York top the list with cost-of-living indexes of 143.1, 139.7, and 126.6, respectively. The District of Columbia ranks as the most expensive, with an index of 149.7, with housing costs alone at 245.1.
To conclude
It is important to be aware of the best states to retire in the United States before you make a decision. This can ensure a comfortable and fulfilling retirement. A lower cost of living can help you fulfill your retirement goals without being burdened with taxes. It can also help you cover your essentials, such as healthcare, long-term care, and others.
Use the free advisor match tool to get matched with seasoned financial advisors who can guide you on choosing affordable states to live in during retirement. Answer a few simple questions based on your financial needs and get matched with 2 to 3 financial advisors who are best suited to help you.
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