What Does It Cost to Retire in These US States?

Retiring in Connecticut takes an estimated $70,094 a year. The state has eased up on retirees in recent years: Social Security is exempt for single filers with income under $75,000 ($100,000 for joint filers), and a recent relief bill is phasing out even those limits. Pension and IRA income can also be partially or fully exempt, depending on income. Property taxes remain among the highest in the country, though, so factor those in.

Mississippi is one of the most tax-friendly states for retirees and among the cheapest, at an estimated $52,524 a year. Social Security, pensions, and 401(k) and IRA withdrawals are all exempt from state income tax, and other income is taxed at a flat 4 percent. Property taxes are among the lowest in the country.

Hawaii is the most expensive state to retire in, at an estimated $110,393 a year. The tax picture is mixed: Social Security and most pensions are exempt, as long as you didn't contribute to the pension, but 401(k) and IRA withdrawals are taxable and income tax rates run high, up to 11 percent. The trade-off is the lowest property tax in the country, with an effective rate around 0.33 percent.

Arkansas is among the more affordable states, at an estimated $54,859 a year. Social Security isn't taxed, and military pensions are exempt; other pensions and retirement-account withdrawals are taxable, though residents 59 and older can deduct up to $6,000 of eligible retirement income. The income tax tops out at 3.9 percent. The climate is mild, but the state does see tornadoes and severe storms.

California is one of the priciest places to retire, at an estimated $83,998 a year, and Kiplinger ranks it among the worst states for retiree taxes. Social Security is exempt, but pensions and retirement-account withdrawals are taxable, and the state's income tax brackets run from 1 percent to 13.3 percent. Where you settle makes a big difference, since costs vary widely across the state.

Alabama is considered retiree-friendly and affordable, at an estimated $53,999 a year. Social Security and pension income aren't taxed, and the first $6,000 of 401(k) and IRA withdrawals is exempt for residents 65 and older. Income tax tops out at 5 percent, and property taxes are among the lowest in the nation. Sales taxes, on the other hand, run high.

New York costs an estimated $77,773 a year, and housing in particular can run well above the national average. The tax breaks help: Social Security isn't taxed, federal, state, local, and military pensions are exempt, and other retirees 59 and older can exclude up to $20,000 of retirement income. Sales tax is high but doesn't apply to groceries, prescriptions, or clothing under $110, and the Enhanced STAR program offers a property-tax break for eligible seniors.

Kentucky runs an estimated $56,456 a year. Social Security isn't taxed, and retirees can deduct up to $31,110 of income from pensions and retirement accounts; income above that is taxed at a flat 3.5 percent. The state's inheritance tax doesn't apply to close family members, and homeowners 65 and older qualify for a homestead exemption.

New Jersey is a higher-cost option at an estimated $70,401 a year. Social Security isn't taxed by the state, and retirees 62 and older with federal income under $150,000 can exclude a large share of their retirement income, up to $75,000 for single filers and $100,000 for joint filers. New Jersey has no estate tax, which it eliminated in 2018, though it does keep an inheritance tax. Property taxes are among the highest in the country.

West Virginia is affordable, at an estimated $54,122 a year, with a small-town, rural feel. A notable change: as of the 2026 tax year, the state fully exempts Social Security benefits, completing a phase-out that began in 2024. Other retirement income, such as pensions and 401(k) and IRA withdrawals, is still taxable after deductions. Property taxes are among the lowest in the country, with an effective rate around 0.59 percent.

Iowa has changed dramatically for retirees. As of 2023, the state exempts retirement income, including pensions and 401(k) and IRA withdrawals, for residents 55 and older, and it eliminated its inheritance tax for 2025 and beyond. Social Security isn't taxed either, and income tax is a flat 3.8 percent. Those changes moved Iowa onto Kiplinger's list of the top 10 most tax-friendly states for retirees, a reversal from its older reputation. The estimated annual cost is about $55,473.

Texas has no state income tax, so Social Security, pensions, and retirement-account withdrawals all go untaxed, and there's no estate or inheritance tax. That helps offset the downside: property taxes are among the highest in the country. School district taxes freeze for homeowners 65 and older, and seniors can qualify for additional homestead exemptions and deferrals. Sales taxes run on the higher side once local rates are added. The estimated annual cost is about $55,780.

New Mexico draws retirees with its landscape and relatively low costs, at an estimated $56,825 a year. The tax situation improved recently: most retirees no longer pay state tax on Social Security, which is now taxable only for higher earners, single filers over $100,000 and joint filers over $150,000. Residents 65 and older can also deduct up to $8,000 of other income. Property taxes are on the low end.

Georgia is a popular, affordable choice at an estimated $56,395 a year. Social Security isn't taxed, and the state offers a generous retirement-income exclusion: up to $35,000 for residents 62 to 64 and up to $65,000 for those 65 and older. Low-income seniors can also get property-tax breaks. Income tax is a flat 5.19 percent.

Indiana keeps things simple with a low flat income tax of 2.95 percent, though many counties add a local income tax on top. Social Security isn't taxed, and military retirement pay is now exempt as well; other pensions and 401(k) and IRA withdrawals are still taxable. Homeowners 65 and older can qualify for property-tax reductions. The estimated annual cost is about $55,657.