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NEW: 5 Cheapest States for Retirees This Year

March 30, 2023 · Personal Finance
tax-friendly states, cheap
Photo by Sean Pavone from Shutterstock

Arkansas

Despite being a bit complicated to pronounce if you’re not a native to the state, Arkansas is one of the cheapest states in which retirees can relocate once they have stopped working. This is because, while they do not have the cheapest cost of property in the region (with some of the other entries on our list being even cheaper), it is still a steal to buy a home in the area, with the average price being around $149,000.

Another reason why retirees that live here cite as a great reason to relocate is the fact that the state is very tax-friendly with their senior residents. If you are a resident here, they do not perceive a tax on Social Security benefits, and if you have another type of retirement income, be it that it comes from IRAs or pension plans, the state offers deductions up to $6,000 for all people aged 59 and 1/2 and older! What’s more, property taxes are cheaper than in other states (under a grand a month), but this is balanced out by the high sales tax.

If you are the homeowner of your primary residence in Arkansas, you will also qualify for a homestead tax credit of up to $375, which is available to you even if you are residing in a retirement or nursing home!

Otherwise, retirees love the low cost of Medicare (with the average being around $44 per month, which is pretty cheap), and they cite the outdoor activities of the Natural State as a plus for those retirees that would love to continue to be active. If you find yourself more drawn to the mountains than to the beach, then this state is definitely one to consider!

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