These Are the 5 Cheapest States to Retire In for 2026

According to The Motley Fool's 2026 Best Places to Retire report, West Virginia has the cheapest housing costs. Unfortunately, it is also one of the most expensive states for living costs. This highlights the need to examine more than just one variable when you are considering where to live in retirement. If you are looking to keep your costs down in 2026, these are the five states you'll want to look at first.

1. Arkansas is cheap all around

The Motley Fool's 2026 Best Places to Retire report places Arkansas at the head of the pack for living costs. And it sits at number five in terms of housing costs. That's a good balance for those who are looking to retire on the cheap.

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The state is a great location for those who appreciate outdoor recreational opportunities. But it also has growing metro areas, including Little Rock, which offers Southern Charm and desirable cultural opportunities. Add in a mild winter climate, and there's a lot to like about Arkansas. That said, healthcare access can be limited, and the summers can be hot.

2. Indiana has extreme seasons

Indiana ranks second for living costs and 11 for housing costs. That's a fair mix that should be attractive to cost-conscious retirees. That said, one of the more interesting things to consider is the weather, which ranges from hot summers to frigid winters. If you like seasons, Indiana has you covered in a way a state like Florida or Texas never will.

That said, Indiana is a bit rural, so city lovers will probably want to look elsewhere. And it is important to note that the state taxes income from many retirement plans, including 401(k)s and IRAs. That fact alone might push it off the list for retirees with significant sums in tax-advantaged savings accounts.

3. Ohio is in the top 10 in three ways

Ohio ranks third for living costs and tenth for housing costs. And it also garners the sixth spot in the overall rank, too. With major cities like Cincinnati and Cleveland, there are plenty of cultural amenities and solid healthcare opportunities, though both may be less available outside metropolitan areas. And public transportation options can be a bit limited, as well. Cold, snowy winters are another negative to consider.

You'll want to visit during the winter for sure, to make certain the cold weather is livable. But you should also visit in the summer, too, because some areas of the state can be tough for those with allergies or asthma.

4. Kentucky is tax-friendly for retirees

Kentucky ranks fourth for living costs and sixth for housing costs. However, one of the biggest perks for retirees will be the fact that the state doesn't tax Social Security. Some other forms of retirement income are also exempt from state taxation. While that's not as attractive as a state with no state income tax, it could still be a winner given Kentucky's overall low costs.

That said, the state is kind of rural. And healthcare options outside of Louisville can be limited. If you like outdoor recreation and small towns backed by strong communities, however, you'll want to make a visit to Kentucky before making your final retirement decision.

5. Texas rounds out the top five

Texas is hot, and housing costs are rising. But in 2026, it ranks fifth in living costs and is still a fairly attractive 18th in housing costs. In the overall ranking, it sits at number three, making it one of the best states in the Sunbelt for retirees to consider. Dallas, in particular, ranks highly among other cities in the South. Notably, there's no state income tax.

If you can justify paying a little more for your housing, Texas could be a good destination for you in retirement. But visit during the summer, given the state's climate. While you are there, check out the attractive cultural opportunities in cities like Dallas and Austin. You might find that the positives outweigh the negatives when you examine the Lone Star State.

There are no easy answers

Arkansas, Indiana, Ohio, Kentucky, and Texas all have a lot to offer, but each also has its own unique drawbacks. Take the time to visit and think about more than just housing and living costs. In the end, you might find that the cheapest state isn't the best state for you when you consider other lifestyle factors like weather, healthcare access, and cultural amenities.

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