When you are deciding where to spend your retirement years, two things matter most: how far your money goes, and how good your day-to-day life actually is. A new study by Neil Jesani Tax Advisors looked at all 50 states and found the places where those two things line up best.
The winner? Mississippi.
The Magnolia State came out on top thanks to the lowest annual cost of living in the country — just $30,754 a year. Healthcare runs about $9,300 per year. And here is a number that really matters: a retiree needs roughly $768,800 to live comfortably there. That is a meaningful difference from what you would need in most other states.
Mississippi also does not tax Social Security income or withdrawals from retirement accounts. If you are living on a fixed income, that is a significant savings right there.
Looking for an affordable spot within the state? The town of Grenada, in north-central Mississippi, is the most affordable lake town in the country, with an average single-family home value of just $123,711.
Iowa comes in second place overall — and actually ranked highest for quality of life among the top five states. Annual costs there average $31,600, and a comfortable retirement requires about $790,100. Healthcare costs run $9,700 per year, which is close to Mississippi’s numbers.
Rounding out the top five are Kansas at number three, New Mexico at four, and Oklahoma at five. Southern and Midwestern states dominated the entire top ten. No state from the East or West Coast made the list.
Neil Jesani, CEO of Neil Jesani Tax Advisors, put it plainly.
“Southern and Midwest states often provide the sweet spot of low living costs combined with decent healthcare infrastructure, while expensive coastal areas can quickly drain even substantial nest eggs. Many successful retirees are adopting a ‘geo-arbitrage’ strategy, moving from high-cost areas where they built wealth to more affordable regions where they can actually enjoy it without financial stress.”
If beach access matters to you, the study notes that Alabama came in at number nine. Mississippi’s Gulf Coast — sometimes called the Secret Coast — is another option worth a look.
The study weighed cost of living, rent prices, annual healthcare costs, quality of life, and the four percent withdrawal rule, which is a guideline designed to help retirees avoid outliving their savings.