Cost of Living · Updated June 2026
Cost of living by state for retirees
Retiree cost of living obeys different rules: wage taxes stop mattering, pension and Social Security treatment start, property tax becomes the dominant recurring tax, and healthcare access turns from a perk into a location criterion.
The sweet spot combines a sub-100 index, retirement-income exemptions, and sub-1% property tax: Tennessee, North Carolina, South Carolina and Georgia headline that intersection in 2026 – explaining a decade of southbound retirement migration.
Cost of living calculator
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Composite 2026 index incl. centre rent (NYC = 100). Salary figures are gross – taxes not included; pair with the salary after tax calculator.
Key insights
Key insights
- Best 2026 intersection: TN, NC, SC, GA – cheap, tax-kind, sub-1% property tax.
- Property tax is the retiree's real recurring tax: $1,900 (TN) vs $7,100 (NJ) on $400k.
- Most states exempt Social Security; pension rules vary widely.
- Senior homestead/freeze programs save $500–2,500/yr – apply for them.
- Healthcare access justifies paying a small index premium.
| State | COL index (US=100) | Income tax | Median home | 1-bed rent |
|---|---|---|---|---|
| South Carolina | 95 | up to 6.2% | $300,000 | $1,250 |
| Tennessee | 90 | None | $320,000 | $1,250 |
| Colorado | 105 | 4.4% flat | $550,000 | $1,700 |
| Utah | 103 | 4.55% flat | $520,000 | $1,450 |
| Nevada | 101 | None | $450,000 | $1,400 |
| Arizona | 103 | 2.5% flat | $440,000 | $1,400 |
| North Carolina | 96 | 3.99% flat | $340,000 | $1,350 |
| Georgia | 92 | 5.19% flat | $330,000 | $1,400 |
| Virginia | 102 | up to 5.75% | $400,000 | $1,500 |
| California | 134 | up to 13.3% | $800,000 | $2,300 |
The retiree tax stack
Social Security: untaxed in the large majority of states (all covered no-tax states plus most others). Pensions/401(k) withdrawals: fully taxed in some progressive states, partially or fully exempt across much of the South. Property tax: the bill that never retires – compare TN 0.48% vs NJ 1.77% on the same $400k home: $1,900 vs $7,100 a year, forever.
Several states add senior-specific relief: homestead exemptions, assessment freezes at 65+, and income-based circuit breakers – worth $500–2,500/year and rarely advertised.
Beyond the tax table
Healthcare beats marginal tax points: Medicare Advantage networks, specialist density, and hospital quality vary more by metro than by state. Many retirees deliberately pay a 5-point index premium to sit near a major medical centre.
Test the fixed-income math: target a metro where your monthly income covers 1.4×+ the local single/couple budget – the margin that absorbs inflation, healthcare surprises, and the occasional grandchild airfare.
FAQ
Frequently asked questions
Which states are cheapest for retirees in 2026?
Tennessee leads the covered set: index 90, no income tax (so no pension tax), and 0.48% property tax. North Carolina, South Carolina, and Georgia follow with low costs and partial retirement-income exemptions.
Which states don't tax retirement income?
The no-income-tax states (TX, FL, WA, NV, TN among covered) tax nothing by construction; several others exempt Social Security fully and pensions partially – check each state page for specifics.
Why does property tax matter so much in retirement?
It's the major tax that survives retirement and rises with assessments. The NJ–TN spread on a $400k home is over $5,000/year – bigger than most states' income-tax bite on typical retirement income.
Florida vs Tennessee for retirement?
Both skip income tax. FL offers beaches and bigger retiree infrastructure but higher index (102 vs 90), pricier insurance, and hurricane risk; TN wins pure cost, FL wins amenity. Run both state pages with your actual income.
How much income do I need to retire in a cheap state?
Target 1.4× the local couple budget: in TN-class states that's roughly $3,800–4,500/month of income for comfort with margin – far below what coastal metros demand.
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