3 States Where Retirees Can Live On Less Than $45K Per Year

Grouo Of Senior Friends Walking Along Sandy Beach Summer

Saving up money for retirement isn’t easy these days.

People especially get worried when crunching the numbers, are contemplating retirement at an earlier age, and even cut expenses now to make retired life easier down the road.

One way to make your money go further after retirement is to live in a less expensive state. If your current location isn’t the place to spend your last decade on Earth, it might be time to do some advanced scouting for states to eventually call home.

GOBankingRates evaluated all 50 states and determined where retirees can live out the golden years for less than $45,000 annually. Here’s more about how they crunched the numbers:

“The study analyzed factors like groceries, housing, utilities, transportation, healthcare and the overall cost-of-living index in each state, all of which contribute heavily to your yearly expenses in retirement. These indices were then multiplied by the average annual expenditures of Americans aged 65 and older, which provided the final ranking of the top eight states.

The figures quoted in this article are per household. The most recent Census lists the average number of people per household as 2.5.”

Iowa landscape

Before unveiling the top three states for retirees living on less than $45K per year, here are some states that came close to cracking the top of the list and the amount a person would need to live comfortably in retirement.

  • Iowa: $42,744
  • Tennessee: $42,345
  • Georgia: $42,250
  • Missouri: $42,726
  • Oklahoma: $41,822

And now the top three states for living on less than $45K per year in retirement.


When it comes to affordable retirement destinations, the Southern region has emerged as the clear leader. Alabama, ranking third on the list, is yet another cost-effective option for retirees with its low housing costs of only $6,950 per year.

Annual expenditures: $41,822


While Kansas may not have many hills, it offers retirees affordable housing, costing just $7,198 annually, along with lower overall expenses. Utilities amount to only $3,791 per year, and groceries are priced at just $3,855 annually.

Annual expenditures: $41,156

And the cheapest state for retirees to live on less than $40K per year…


Mississippi tops the list as the most cost-effective place to retire, requiring only an annual housing cost of $6,574, which provides a comfortable living. Groceries will cost around $3,876 per year, utilities an additional $3,420, and healthcare expenses a mere $6,315. Even if you struggle with spelling, retiring in Mississippi is a viable option.

Annual expenditures: $$39,633

To read the entire report, head over to read more about the states where retirement will cost less than $45,000 a year.

Chris Illuminati

Chris Illuminati is the author of five books and has written about personal finance, wealth, debt management, and entrepreneurship for numerous outlets including Wise Bread, Grow or Die, and Bankrate.