The Cheapest Places to Retire in the U.S.

15 Cities That Fit Into Your Retirement Budget

Sunset over Phoenix

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Looking for the cheapest places to retire in the U.S.? We found 15 American cities to consider. With low housing and food costs along with affordable healthcare, any of these would make for comfortable living, even for people who find themselves a little low on retirement savings.

Key Takeaways

  • Many of the cheapest places to retire in the U.S. are located in the South or Midwest.
  • Local housing and food costs are often major factors of an area's average cost of living.
  • The tax rate, access to healthcare, and nearby attractions are all things to consider when comparing cities.

Bakersfield, California

With a population of 376,000, this city north of Los Angeles sees only 6.45 inches of rain per year on average and sun 272 days per year. The average person over age 65 spends about $42,000, including $7,041 on rent and $3,224 on groceries.

Columbia, South Carolina

Retirees are the fastest-growing demographic in Columbia, and the city knows it. City officials have created plenty of low-cost activities for seniors, which helps keep expenditures low. The average retiree spends just shy of $42,000, including $7,400 on rent and $3,400 on groceries.

Phoenix, Arizona

If you’re looking for big-city living, Phoenix makes that a reality at an affordable price. The average annual spending is $41,800 with rent and groceries coming in at $7,523 and $3,058, respectively.

Austin, Texas

As one of the fastest-growing cities in the country, Austin still holds on to that suburban feel. Annual expenditures are around $41,700, but rent and groceries are a bit higher at $9,085 and $3,085, respectively.

Pensacola, Florida

You’ll find Pensacola on the western edge of Florida’s panhandle on the Gulf coast. Plan to spend around $41,500 per year, including $7,200 on rent and $3,255 on food. And plan on a lot of free air shows as Pensacola is home to the Navy’s Blue Angels.

Sioux Falls, South Dakota

Listed as one of the healthiest cities in America, you’ll find plenty of parks and trails for exercise in this city of only 175,000. You’ll spend about $42,300 per year, including $7,100 on rent and $3,300 on groceries.

Ann Arbor, Michigan

Don’t want to be surrounded by people your age when you retire? Ann Arbor is home to the University of Michigan, bringing the median age of the city to 28 years old. You’ll spend about $41,250 per year, including $2,973 annually on food. Because it’s a college town, rent is higher at $8,300.

Tulsa, Oklahoma

If you like to golf, boat, or fish, you might love Tulsa. With 16 public golf courses and more man-made lakes than any other American city, this city of 403,000 caters to the outdoor-type. Annual expenditures come in at $38,000, with $7,392 going to rent and $3,260 to groceries.

Kansas City, Missouri

If you’re a fan of jazz and barbeque, give this city of nearly 500,000 a good look. Kansas City is well known for both. You’ll spend just below $40,000 per year, including $7,366 on rent and $3,045 on groceries.

Rochester, New York

Rochester sits on the coast of Lake Ontario and boasts a population of about 208,000. If you love the seasons, Rochester has a summer average of 78 degrees and a winter average of 32. Annual expenses are $40,586, with $7,400 going to rent and just over $3,000 going to groceries.

Salt Lake City, Utah

With the Great Salt Lake on one side, and the snow-capped Wasatch Range on the other side, this town of nearly 200,000 sits 4,226 feet above sea level and is an outdoor enthusiast’s dream. Annual expenditures come in at $40,500, with $7,600 going to rent and $3,000 going to groceries.

Omaha, Nebraska

If you’re a history buff, Omaha is a stop on the Lewis & Clark National History Trail and known as a town rich in pioneer history. With a population of 447,000, annual expenditures come in at $40,000, with $7,460 going to rent and $3,046 going to groceries.

Mobile, Alabama

If you thought Seattle was the rainiest place in the country, that’s actually Mobile, Alabama, with an average of 5.5 feet per year. But Southern hospitality is on full display in this city of only 192,000. Annual expenditures are a mere $38,300, with $6,800 going to rent and $3,000 to groceries.

San Antonio, Texas

You know it as the home of the Alamo, but you should also love it for its tax-friendly treatment of seniors. You’ll pay no state tax on Social Security income or withdrawals from retirement accounts or pensions. Annual expenditures are only $42,600, with $7,700 going to rent and $2,890 to groceries.

Birmingham, Alabama

With annual expenses coming in at only $33,219, including $5,242 on housing, Birmingham’s cost of living is 27 percent below the national average, and the cost of healthcare is one of the lowest in America. With a population of just over 200,000, it has a small-town feel but plenty of things to do.

Other Cities worth a look:

  • Detroit, Michigan
  • Jackson, Mississippi
  • Memphis, Tennessee
  • Toledo, Ohio
  • Augusta, Georgia
  • Cleveland, Ohio
  • Akron, Ohio