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The 6 Cheapest Southern States to Retire In and Why Retirees Are Choosing Them as the Best Places to Live
Where can your retirement income stretch furthest? Explore 6 Southern states with low living costs, tax perks, warm weather and tons of lifestyle appeal.
The USA’s rising housing, healthcare and daily living costs are a real worry for Americans reaching retirement age. The comfortable life stage you’ve spent decades planning and preparing for may feel like it’s becoming increasingly out of reach.
But there’s some good news: you don’t need to give up on your dream. There are still parts of the US where your retirement income can stretch surprisingly far.
From lower housing costs to affordable everyday expenses, here are six Southern states that prove the Golden Years can, in fact, still be golden.
Why so many retirees are quietly heading south
For most retirees, the dream is simple: plenty of sunshine, a slow pace and enough financial breathing room to actually enjoy this life stage.
That’s one reason more and more retirees are starting to look beyond the usual beachfront retirement hotspots. For example, recent retirement migration data shows that coastal cities in Florida are becoming less popular. This is because the state’s rising housing and everyday costs are making a comfortable retirement lifestyle harder to afford.
Other Southern states, like Mississippi, Alabama, and Tennessee, are quietly gaining popularity. Their geographic location means they still have plenty of sunshine, but their inland cities and smaller communities offer significantly lower living costs.
Plus, the tax rules of some Southern states allow more of your retirement income to stay in your pocket.
The result? More freedom for the things retirement is actually supposed to be about.
The 6 cheapest Southern states to retire
An affordable retirement state is one that offers:
- Low housing prices
- Reasonable living costs that allow you to live comfortably
- State taxes that don’t eat up all your retirement income
The following six states tick all these boxes, but each offers a very different version of Southern retirement. So choosing the right one will depend on what you’re looking for from everyday life, whether that’s a quiet small-town life, an abundance of outdoor activities, or easy access to popular US tourist destinations.
| State | Cost and tax draw | Good fit for |
|---|---|---|
| Mississippi | Among the lowest overall living costs in the US, retirement income largely untaxed | Budget-first retirees who want the most stretch per dollar |
| Alabama | Low living and housing costs, Social Security and pensions not taxed | Small-city living near Birmingham, Montgomery, or Mobile |
| Tennessee | No state income tax, moderate cost of living | Music, hills, and no tax on retirement withdrawals |
| Arkansas | Among the lowest living costs in the country | Outdoorsy retirees who like lakes, trails, and quiet towns |
| Georgia | Retirement income exclusion for older residents, city and country mix | Atlanta access without Atlanta prices |
| Louisiana | Low property taxes and affordable homes | Food, culture, and mild winters |
Mississippi: The biggest budget stretch
For retirees who put affordability first, though, Mississippi is hard to beat. It’s consistently ranked as one of the cheapest states to live in, due to its low cost of living (around 15% below the national average).
It’s also one of the most tax-friendly states for retirees because the state does not tax Social Security income or pensions. Plus, the slow pace of life and small-town ambiance appeal to many retirees.
The trade-off?
Some of Mississippi’s rural areas can have limited access to healthcare, and you’ll find fewer big-city amenities.
Alabama: Low costs and small-city living
Alabama offers the affordability of the South without feeling too remote.
Cities such as Birmingham, Montgomery, and Mobile are ideal for retirees who prefer city living over rural life. Here you’ll enjoy low living costs, plenty of everyday amenities, and world-class healthcare.
What’s more, Social Security is tax-free at the state level in Alabama, and public pensions are exempt from taxation.
However, Alabama can get very hot and humid in the summer. Therefore, it’s best to visit during the warmer months to see if you can handle it before committing to the move.
Tennessee: No state income tax and mountain views
Tennessee’s tax benefits make it one of the best places to retire in the US. There’s no state income tax on any form of personal income, so your retirement withdrawals won’t be taxed at the state level.
The cost of living isn’t as low as some other Southern states, but this slight increase in living costs is well worth it for the lifestyle you get. Nashville’s music scene, easy access to the foothills of East Tennessee, and iconic Southern food culture all make for a truly enjoyable retirement.
However, if you’re not planning to retire just yet, note that housing costs in major cities like Nashville are slowly rising. Choosing smaller Tennessee towns is the best way to keep your living costs low.
Arkansas: Cheap and outdoorsy
Arkansas offers one of the lowest costs of living in the country and very affordable housing. But its value goes beyond the numbers.
With an abundance of lakes, hiking trails and natural hot springs across its 52 state parks, Arkansas is a great fit for retirees looking for an active, outdoorsy Golden Years.
On the other hand, Little Rock is ideal for those who want culture, good restaurants and essential services within easy reach but without the price tag of a major city.
The caveat is that outside of Little Rock, much of Arkansas is very rural. So keep in mind you may be far from a major airport or healthcare services, and cut off from public transit.
Georgia: City access without city prices
Georgia offers access to city living without the high costs. Cities like Atlanta offer top-class healthcare, culture, and entertainment. There are also many low-cost or free things to do in Atlanta, making it ideal for those who want to stay active and social in their later years.
Georgia also has plenty of smaller towns that are cheap, walkable, and very historic.
There’s also a tax perk: residents aged 62 and over may qualify for a substantial retirement income exclusion, with the current rules allowing up to $65,000.
The weather can be both an advantage and a disadvantage. The winters are mild, but summers can get fairly hot and humid in the inland towns.
Louisiana: Food, culture, and mild winters
Louisiana is proof that a retirement relocation can offer much more than a low cost of living.
Affordable homes and relatively low property taxes keep everyday expenses manageable. But the state’s lifestyle is the real draw.
Each year, Louisiana hosts hundreds of festivals, such as the New Orleans Jazz Fest and Mardi Gras. This vibrant event calendar, combined with the state’s music and food scene, promises a retirement with a strong social life and community spirit.
That said, if you’re considering coastal Louisiana, it’s worth considering the hurricane and flooding risks, and the rising home insurance costs associated with this.
How to choose your state before you commit
Before you choose a US retirement state, take time to rank your priorities:
- Think about what is most important to you, such as low taxes, affordable housing, warm weather, good healthcare, or staying within easy reach of family.
- Rank each one’s importance from 1-10 to help you understand what’s non-negotiable and what’s nice to have.
- See which of the six states lines up best with your list.
Then, before you commit and buy a property, visit, and ideally, spend more than one season there.
Plan a road trip across the state, staying in at least a few towns you’re considering so you can compare them.
Finally, budget what you want to spend in a typical week during your retirement. Then, in each place, visit the grocery store, try the public transport, explore what’s around, and check the healthcare facilities to get a clear idea of what life there would look like and cost.
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Hi, I'm Mika, a South Korean writer living in the US. I cover travel and live events, focusing on the practical stuff that makes your trip smoother, whether you're navigating a new city or heading to a major international event.I'm also the founder of Search SEOul, South Korea's leading SEO conference, bringing together search marketing experts and speakers from around the world.
