If you’re on a fixed income — like many people in retirement — controlling your expenses becomes more important than ever.
One way to do that? Living somewhere with a lower cost of living. That’s part of the thinking behind finance website WalletHub’s 2026 ranking of Best and Worst States to Retire.
While its ranking incorporates “46 key indicators of retirement-friendliness” sorted into three key dimensions — healthcare, quality of life and affordability — we’re just going to highlight the best states in that last category.
Here are the states deemed most affordable for retirees.
10. Missouri
Missouri has a lot of allure for some retirees. The state stopped taxing Social Security benefits in 2024, and it offers exemptions on income from both private and public pensions.
Public pensions can be written off up to the full Social Security benefit amount, so plenty of retirees on fixed incomes here owe the state almost nothing.
9. Mississippi
Mississippi is No. 1 in the U.S. for housing affordability, according to U.S News, and No. 2 for cost of living. So a nest egg here can stretch further.
The state also leaves retirement income alone, skipping tax on Social Security, pensions and withdrawals from 401(k)s and IRAs taken at retirement age. Those savings carry weight in a state that otherwise lands near the bottom for healthcare and quality of life.
8. Alabama
The typical Alabama homeowner pays about $890 a year in property taxes, among the lowest bills in the nation. Care costs are gentle too. Alabama tied for the third-lowest annual cost of in-home services in WalletHub’s study, which matters for anyone hoping to age at home.
Social Security and traditional pensions go untaxed, though 401(k) and IRA withdrawals are taxed above a $6,000 break for residents 65 and older.
7. North Carolina
North Carolina’s income tax is 3.99% in 2026 and will gradually drop until it reaches 2.99% in 2028, and Social Security benefits are exempt entirely.
The catch for retirees is that pensions and 401(k) withdrawals get taxed at that flat rate, so that low headline number does more for some budgets than others.
6. South Carolina
South Carolina taxes owner-occupied homes on just 4% of their market value, dropping the effective property tax rate to around 0.5%, one of the lowest anywhere. Social Security isn’t taxed, and residents 65 and older can deduct up to $10,000 of other retirement income a year.
South Carolina may not be your first thought for a beachside retirement, but it’s home to some of our “9 Great Places to Retire by the Beach.”
5. Nevada
Nevada collects no income tax, so Social Security, pensions and retirement account withdrawals are all untouched by the state. Property taxes are light as well, with an effective rate near 0.5%. The trade-off shows up at the register, where combined sales taxes run above 8% on most of what you buy.
If the only thing you know about Nevada is Las Vegas, check out “13 of the Best Places to Retire in Nevada.”
4. Tennessee
Tennessee doesn’t tax income, which means Social Security, pensions and 401(k) withdrawals all escape the state, and there’s no estate or inheritance tax waiting for your heirs. Property taxes run low too, around 0.64%.
However, Tennessee’s combined sales tax is among the highest in the country, and it’s one of the few states that still taxes groceries.
Tennessee ranks 32nd overall as a place for retirees, after placing low on healthcare and quality of life, according to WalletHub, but it takes the No. 4 spot for affordability. Seniors make up nearly 18% of the population, as we explain in “8 of the Best Places to Retire in Tennessee.”
3. Delaware
Delaware charges no sales tax, so the sticker price is the price you pay, a rare perk that adds up over a retirement’s worth of spending. There’s no estate or inheritance tax and no tax on Social Security, and residents 60 and older can exclude up to $12,500 of pension and other retirement income, according to the Delaware Division of Revenue.
WalletHub ranked the state No. 7 overall for retirees.
2. Florida
Florida’s cost of living runs higher than most of the South, yet it still ranks second for affordability, and the tax code is why. There’s no state income tax and no tax on Social Security, pensions or retirement withdrawals.
Florida missed the No. 1 overall spot by a hair, trailing Wyoming by 0.01 points on WalletHub’s 100-point scale.
1. Wyoming
Wyoming hands retirees the lowest total state tax burden in the country, pairing no income tax with no estate or inheritance tax and a property tax rate near 0.55%.
Long-term care costs less here too. The state posted the fifth-lowest annual price for homemaker services, a break for anyone who wants to stay put in their own home.
Wyoming stands out for its excellent quality of life, taking WalletHub’s No. 6 ranking in that category. The Equality State is full of breathtaking landscapes and home to one of the most beautiful national parks, Grand Teton National Park.
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