10 Best States to Retire in 2027 (Taxes, Cost & Climate Ranked)

Direct Answer

The best overall state to retire in 2027 is Florida, which levies no state income tax, no estate tax, and a homestead exemption that shields up to $50,000 of assessed home value, paired with a year-round warm climate that draws roughly 1,000 net new retirees per day. The best value pick is Tennessee, where there is no income tax on wages or retirement income and an average home price near $315,000 — well below the national figure.

This list is for people 55 and older weighing taxes, housing cost, climate, and healthcare access when choosing a state to spend their retirement years. Picks range from low-tax Sun Belt states to high-amenity mountain and coastal options. Every state below is real, and they are ranked on a blend of tax burden, cost of living, climate, and healthcare quality from sources including the Tax Foundation, MIT Living Wage data, Kaiser Family Foundation, and Census American Community Survey figures.

1. Florida 🏆 BEST OVERALL

Florida is the default retirement destination for a reason: it has no state income tax, no tax on Social Security or pension income, and no estate or inheritance tax. The constitutional homestead exemption removes up to $50,000 from a primary home's assessed value for property tax purposes, and the Save Our Homes cap limits annual assessment increases to 3%.

The trade-off is property insurance. After several major hurricanes, average homeowners insurance in Florida runs roughly $6,000 per year, more than triple the national average. Median home prices sit near $390,000 statewide, though inland metros like Ocala and Lakeland run well below coastal Naples or Sarasota.

It ranks #1 because no other state combines this tax structure with this climate, healthcare infrastructure (including world-class facilities like the Mayo Clinic in Jacksonville and Cleveland Clinic in Weston), and a retiree population so large that services, communities, and social networks are built around people over 55.

It is for retirees who prioritize taxes and warm weather above all and can budget for insurance.

2. Tennessee 💎 BEST VALUE

Tennessee fully phased out its Hall income tax on interest and dividends in 2021, so the state now has zero income tax of any kind — wages, Social Security, pensions, and 401(k) withdrawals are all untaxed at the state level.

Median home prices hover near $315,000, and metros like Knoxville and Chattanooga offer mountain scenery and four mild seasons at costs well below the national average. The combined state and local sales tax averages about 9.55%, among the highest in the country, which is the main offset to the income-tax savings.

It earns Best Value because the total tax-plus-housing math is hard to beat: a retiree drawing $60,000 a year from retirement accounts pays no state income tax and buys a comfortable home for under the U.S. Median. It is for budget-conscious retirees who want low taxes without leaving the temperate Southeast.

3. Texas

Texas has no state income tax, and the warm climate of its southern and Hill Country regions appeals to snowbirds. Median home prices near $340,000 are reasonable, and metros like San Antonio and Austin have strong medical systems.

The catch is property tax: Texas has one of the highest effective property tax rates in the nation at roughly 1.6%, so a $340,000 home can carry a $5,400 annual tax bill. Over-65 homeowners qualify for additional exemptions and a school-tax freeze, which softens the blow considerably.

It ranks here for retirees who want no income tax and don't mind paying more at the property level, especially those buying modestly priced homes where the percentage stings less.

4. Wyoming

Wyoming is quietly one of the most tax-friendly states in the country. It has no state income tax, no estate tax, and a low average effective property tax rate of about 0.55%, plus a sales tax averaging just 5.36%.

Median home prices near $345,000 reflect demand in scenic areas like Jackson, though most of the state is far cheaper. The climate is cold and dry, with real winters, which won't suit sun-seekers.

It earns a high spot for retirees with significant assets, since Wyoming shelters income and estates while keeping property and sales taxes low. It is best for those who value open space and low taxes over warm weather.

5. Arizona

Arizona combines a dry, warm climate with a flat 2.5% state income tax — one of the lowest flat rates in the country — and no tax on Social Security benefits. Median home prices near $430,000 are higher in Phoenix and Scottsdale but drop in Tucson and smaller towns.

The state has built enormous retiree-focused communities such as Sun City and Green Valley, with golf, recreation centers, and healthcare oriented around older residents. Summer heat regularly exceeds 110°F, which is the principal drawback.

It ranks fifth for retirees who want desert warmth, low income tax, and purpose-built 55+ communities, and who can tolerate intense summers (or leave for them).

6. South Carolina

South Carolina offers a retirement income deduction of up to $10,000 per person (and a $15,000 deduction for those 65+), plus no tax on Social Security. Property taxes are low, with an effective rate near 0.5%, among the lowest in the nation.

Median home prices near $360,000 and a mild coastal climate make areas like Myrtle Beach, Hilton Head, and the Greenville foothills popular. Summers are humid, and hurricane risk exists on the coast.

It ranks here for retirees who want a warm, lower-cost Southeastern base with meaningful retirement-income exemptions and very low property taxes.

7. Georgia

Georgia is generous to retirees: residents 65 and older can exclude up to $65,000 of retirement income per person ($130,000 per couple), and Social Security is fully exempt. The state income tax is a flat 5.39%, but the large exclusion means many retirees pay little.

Median home prices near $350,000 and a warm climate make metro Atlanta's suburbs and smaller cities like Savannah and Athens attractive. Atlanta also offers major medical centers including Emory Healthcare.

It earns its spot for retirees with substantial pension or 401(k) income who benefit most from the high retirement-income exclusion.

8. North Carolina

North Carolina has a flat income tax of 4.25% (scheduled to keep declining) and fully exempts Social Security. Median home prices near $345,000 and a varied geography — mountains in Asheville, beaches on the Outer Banks, mild Piedmont cities — give retirees options.

Property taxes are moderate at roughly 0.7%, and the Research Triangle area offers Duke and UNC hospital systems. Winters are mild but real in the mountains.

It ranks here for retirees who want four-season variety, a declining flat tax, and strong healthcare without coastal Florida insurance costs.

9. Nevada

Nevada has no state income tax and no tax on retirement income, with a warm, dry climate outside the higher-elevation north. Median home prices near $450,000 are pushed up by Las Vegas and Reno, the main drawback.

Property taxes are low at about 0.5%, and there is no estate tax. Las Vegas offers extensive entertainment, dining, and a growing medical sector, while Henderson is a frequent pick for quieter 55+ living.

It earns its place for retirees who want no income tax and desert warmth, and who can afford somewhat higher housing.

10. Mississippi

Mississippi is the most affordable state on this list, with median home prices near $190,000 — the lowest in the country — and a low overall cost of living. It does not tax retirement income (Social Security, pensions, IRA, and 401(k) withdrawals are exempt).

The income tax is a flat 4.4% on other income, dropping in coming years, and property taxes are low. The trade-offs are healthcare access, which ranks poorly in rural areas, and hurricane exposure on the Gulf Coast.

It ranks tenth for the most budget-driven retirees: nowhere on this list stretches a fixed income further on housing, provided you weigh the healthcare limitations.

How to Choose

• Map your income sources to each state's tax rules. A retiree living mostly on Social Security cares less about income tax (federally taxable but exempt in most states here) than someone drawing six figures from a 401(k).
• Add property tax and insurance to the housing math. Florida's no-income-tax advantage shrinks once you add $6,000 insurance; Texas's low home prices are partly eaten by 1.6% property tax.
• Weight healthcare quality heavily. Proximity to a top-ranked hospital system matters more every year you age; check U.S. News hospital rankings for your target metro.
• Visit in the worst season. Tour Arizona in July and the mountains in January before committing, so the climate is a known quantity.
• Check 55+ community density. States like Florida and Arizona have purpose-built communities with built-in social and medical infrastructure that ease the transition.

FAQ

Which state has the lowest overall tax burden for retirees? Wyoming and Tennessee are consistently near the bottom for total tax burden on retirees. Wyoming combines no income tax with a ~0.55% property tax and ~5.36% sales tax, while Tennessee has no income tax at all, offset by a high ~9.55% combined sales tax.

The best choice depends on whether you spend more (favoring low sales tax) or hold more assets (favoring no income tax).

Do these states tax Social Security benefits? None of the ten states on this list tax Social Security benefits at the state level. As of 2027, the large majority of U.S. States exempt Social Security, and the states ranked here all fully exempt it. Federal taxation of Social Security can still apply depending on your combined income.

Is Florida still worth it given the insurance costs? For many retirees, yes, but the math has tightened. Average Florida homeowners insurance near $6,000 a year can erase part of the no-income-tax savings, especially for lower-income retirees. Inland metros like Ocala, Lakeland, and Gainesville carry lower insurance and home costs than the coast, which is how many retirees keep Florida affordable.

What is the cheapest state to retire in purely on cost of living? Mississippi has the lowest median home price in the country at roughly $190,000 and a low overall cost of living, making it the cheapest on pure dollars. The main caution is rural healthcare access, which ranks below average, so retirees with significant medical needs should locate near a larger metro like Jackson or the Gulf Coast hospitals.

Bottom Line

For most retirees, Florida is the Best Overall state to retire in 2027 thanks to no income tax, no estate tax, a homestead exemption, and unmatched warm-weather retiree infrastructure — as long as you budget for insurance. The Best Value pick is Tennessee, with zero income tax and median home prices near $315,000 that stretch a fixed income further than nearly anywhere temperate.

Sources

• Tax Foundation — State Individual Income Tax and Property Tax data (taxfoundation.org)
• U.S. Census Bureau — American Community Survey median home value and income data
• Kaiser Family Foundation — state healthcare access and Medicare data (kff.org)
• Zillow Home Value Index — state median home prices
• Insurance Information Institute — average homeowners insurance premiums by state (iii.org)
• AARP — state retirement tax guides (aarp.org)
• U.S. News & World Report — Best Hospitals rankings and Best States to Retire
• MIT Living Wage Calculator — cost-of-living data by state