Top 10 Most Affordable States to Retire in 2027

Direct Answer

For retirees stretching a fixed income in 2027, Mississippi ranks as the Best Overall thanks to a cost of living roughly 14% below the national average and a state policy that does not tax retirement income (no tax on Social Security, pensions, 401(k), or IRA withdrawals). The Best Value pick is West Virginia, where the median home price sits near $165,000 and the state is phasing out its Social Security tax entirely by 2026.

This list is for people who want their savings to last, not chase warm weather alone, and it spans states where a comfortable retirement runs roughly $45,000 to $60,000 a year for a couple. Every state below is real, with affordability measured by cost-of-living index, housing prices, retirement-income tax treatment, and average property-tax burden.

Rankings weigh actual dollars saved over lifestyle perks.

1. Mississippi 🏆 BEST OVERALL

Mississippi consistently posts the lowest cost of living in the United States, with a composite index around 86 to 87 against a national baseline of 100. Housing is the biggest driver: the median home value runs near $175,000, and property taxes average roughly 0.65% of assessed value, among the lowest in the country.

The tax picture is what pushes Mississippi to #1 for retirees. The state exempts all qualified retirement income once you reach 59½, including pensions, 401(k)s, IRAs, and of course Social Security, which Mississippi never taxes. A couple drawing $55,000 a year keeps far more of it here than in most states.

This is for retirees who prioritize dollars over destinations. Healthcare access in rural areas is thinner than in larger states, so it suits people who can settle near Jackson, Hattiesburg, or the Gulf Coast where hospitals are closer. Groceries, utilities, and transportation all run below the national average, and the mild Gulf-influenced climate keeps heating bills modest in winter.

A couple that owns its home outright can realistically live on Social Security plus a small pension here, which is the core reason Mississippi tops the list.

2. West Virginia 💎 BEST VALUE

West Virginia offers the cheapest housing in the nation, with a median home price near $165,000 and many livable homes in towns like Beckley or Parkersburg well under $130,000. The overall cost-of-living index sits around 88.

The state is fully phasing out its tax on Social Security benefits by 2026, so by 2027 retirees keep 100% of their Social Security. Property taxes are also low, averaging about 0.55%, and the state offers a homestead exemption that knocks the first $20,000 off assessed value for residents 65 and older.

West Virginia fits outdoorsy retirees who want mountains, rivers, and very low overhead. Winters are real, and it is rural, so it rewards people comfortable with small-town life. Utility costs run near the national average, but the dramatically lower housing and tax burden more than offsets them.

Towns near Morgantown benefit from West Virginia University's medical system, which gives retirees a credible healthcare anchor without sacrificing the state's bargain pricing.

3. Arkansas

Arkansas pairs a cost-of-living index near 89 with a median home price around $200,000. The state taxes income but exempts the first $6,000 of retirement-plan distributions per person and does not tax Social Security at all.

Property taxes are modest at roughly 0.62%, and Arkansas caps annual increases in assessed value for homesteads, which protects retirees from sudden jumps. Northwest Arkansas around Bentonville and Fayetteville has grown into a higher-amenity area with good hospitals, while the rest of the state stays cheap.

This suits retirees who want low costs plus access to lakes, the Ozarks, and a couple of genuinely growing metro areas. Healthcare is concentrated in Little Rock and Northwest Arkansas, so settling near one of those hubs keeps medical care within reach. Outdoor recreation, from the Buffalo National River to dozens of state parks, gives an active retiree plenty to do at little cost.

4. Oklahoma

Oklahoma's cost-of-living index runs around 86 to 88, and its median home price hovers near $200,000. The state does not tax Social Security and exempts up to $10,000 of other retirement income per taxpayer.

Property taxes average about 0.85%, slightly higher than the cheapest states, but Oklahoma offers a senior valuation freeze that locks in assessed value for homeowners 65 and older below an income cap. Tulsa and Oklahoma City provide solid healthcare and culture without coastal pricing.

Oklahoma works for retirees who want a low-cost base with two real cities nearby for medical care and entertainment. The state's grocery and utility costs sit below the national average, and gasoline is consistently among the cheapest in the country, which matters for retirees who drive a lot.

The main trade-off is weather: tornado season and hot summers are part of the deal.

5. Alabama

Alabama posts a cost-of-living index near 88 and a median home price around $220,000. Critically, the state does not tax Social Security or traditional pension income, including most defined-benefit pensions.

Property taxes are among the lowest in the nation at roughly 0.40%, and residents 65 and older are exempt from the state portion of property tax entirely. The Gulf Coast around Mobile and the Huntsville area (strong on healthcare and engineering jobs for part-time work) give retirees real options.

Alabama is ideal for pension-heavy retirees, since that income arrives tax-free at the state level. Huntsville in particular has grown into a high-income, well-serviced metro thanks to aerospace and defense work, giving retirees strong hospitals and part-time work options. The Gulf Coast offers beach access and milder winters at prices far below Florida's.

6. Kentucky

Kentucky's cost-of-living index sits around 90, with a median home price near $215,000. The state does not tax Social Security and exempts up to $31,110 of other retirement income per person, a high threshold that covers many retirees' full pension or 401(k) draw.

Property taxes are low at about 0.80%, and Kentucky offers a homestead exemption (around $49,000 of assessed value) for residents 65 and older. Louisville and Lexington offer good hospitals and universities, while horse country and small towns keep costs down.

Kentucky suits retirees with moderate retirement-account income who benefit from that generous exemption. The state's overall cost of living stays below average outside its two main cities, and the climate offers four distinct but mild seasons. Bourbon country, lakes like Cumberland, and the Red River Gorge give retirees affordable recreation close to home.

7. Indiana

Indiana's cost-of-living index runs near 90, and its median home price is around $230,000. The state does not tax Social Security and applies a flat income-tax rate of roughly 3.0%, which is dropping toward 2.9%, to other retirement income.

Property taxes average about 0.85%, and Indiana caps property tax at 1% of a home's value for owner-occupied residences. Indianapolis anchors strong healthcare, and smaller cities like Bloomington and Fort Wayne stay affordable.

Indiana fits Midwest retirees who want predictable, flat taxes and a cap on property-tax exposure. The 1% property-tax cap is written into the state constitution, so retirees get unusual certainty about their largest recurring housing cost. Indianapolis offers major hospital systems, while smaller cities keep day-to-day expenses well below the national average.

8. Missouri

Missouri's cost-of-living index is near 89, with a median home price around $230,000. As of recent reform, Missouri no longer taxes Social Security benefits regardless of income, and it offers deductions on public pension income.

Property taxes average roughly 0.95%, slightly above the cheapest states, but a new senior property-tax freeze lets counties lock assessed values for residents 62 and older. Springfield, Branson, and the Lake of the Ozarks draw retirees with low costs and recreation, while Kansas City and St. Louis provide major hospitals.

Missouri works for retirees who want recreation hubs plus tax-free Social Security. Branson's live-entertainment scene and the Lake of the Ozarks draw retirees specifically for affordable leisure, while two major metros bracket the state for healthcare. Grocery and utility costs sit below the national average, reinforcing Missouri's value.

9. Tennessee

Tennessee has no state income tax of any kind, so all retirement income, Social Security, pensions, and 401(k) withdrawals are untaxed at the state level. Its cost-of-living index sits near 90, with a median home price around $320,000 (higher because of Nashville's growth).

Property taxes are low at about 0.55%, and there is a property-tax relief and freeze program for low-income seniors. Outside Nashville, cities like Chattanooga, Knoxville, and the Tri-Cities region remain affordable with strong healthcare.

Tennessee fits retirees with significant taxable withdrawals who want zero state income tax, as long as they avoid Nashville's pricier housing. The state's sales tax is high, around 9.5% combined in many areas, so heavy spenders feel that offset, but retirees living modestly still come out well ahead.

The Smoky Mountains, multiple lakes, and a mild climate add to the appeal.

10. Georgia

Georgia rounds out the list with a cost-of-living index near 91 and a median home price around $320,000. The state's standout feature is its retirement-income exclusion: up to $65,000 per person (or $130,000 per couple) for those 65 and older, plus Social Security is fully exempt.

Property taxes average about 0.80%, and many counties add senior homestead exemptions that reduce or eliminate school taxes. Outside metro Atlanta, areas like Augusta, Savannah, and the north Georgia mountains stay reasonable with good hospitals.

Georgia is best for higher-income retirees, since that large per-person exclusion shelters most retirement-account and pension draws. The combined $130,000 couple exclusion is one of the most generous in the nation, effectively making Georgia a near-zero-tax state for many retirees.

Mild winters, mountains to the north, and the coast to the southeast give a range of settings at reasonable cost outside metro Atlanta.

How to Choose

• Match the tax break to your income type. If most of your money is Social Security and pension, Alabama or Mississippi keeps it tax-free. If you draw heavily from a 401(k)/IRA, Tennessee's zero income tax or Georgia's $65,000 exclusion does more.
• Weight housing first. Housing is the largest retirement expense, so West Virginia and Mississippi's sub-$180,000 medians move the needle more than a small tax tweak.
• Check property-tax relief for seniors, not just the base rate. Alabama and Georgia effectively zero out big chunks of property tax for residents 65+, which can beat a state with a lower headline rate.
• Factor healthcare access. Rural affordability means longer drives to major hospitals; pick a town within reach of a regional medical center if you have ongoing needs.
• Run your actual numbers. Plug your real Social Security, pension, and withdrawal figures into each state's rules; the "cheapest" state depends on your specific income mix, not a single index.

FAQ

Which state is truly the cheapest to retire in for 2027? Mississippi has the lowest overall cost of living and taxes no retirement income, making it the strongest all-around pick. West Virginia is close behind and beats it on housing prices, so the true winner depends on whether you weigh housing or healthcare access more heavily.

Do any of these states tax Social Security benefits? None of the ten tax Social Security as of 2027. West Virginia finished phasing out its Social Security tax by 2026, and states like Mississippi, Tennessee, and Alabama never taxed it.

How much does a couple need to retire comfortably in these states? In most states on this list, a couple can live comfortably on roughly $45,000 to $60,000 a year, with the lower end realistic in Mississippi, West Virginia, and Arkansas where housing and property taxes are lowest.

Is low cost of living worth giving up better weather or amenities? That depends on your priorities. These states trade coastal weather and big-city amenities for dollars saved, so they fit retirees focused on making savings last; if climate or culture ranks higher, you may pay more elsewhere.

Bottom Line

For 2027, Mississippi is the Best Overall affordable retirement state thanks to the nation's lowest cost of living combined with zero tax on all retirement income. West Virginia is the Best Value, offering the cheapest housing in the country (median near $165,000) and fully tax-free Social Security.

Match the state's specific tax rules to your own income mix before deciding.

Sources

• U.S. Census Bureau — American Community Survey, median home values and population data
• Missouri Economic Research and Information Center (MERIC) — state cost-of-living index rankings
• Tax Foundation — state property-tax rates and retirement-income tax treatment
• Kiplinger — annual state-by-state guide to taxes on retirees
• AARP — state taxation of Social Security and retirement income
• Zillow / Redfin — current median home-price data by state
• National Conference of State Legislatures (NCSL) — state retirement-income tax legislation