Relocating for Retirement? These States Have Lower Costs of Living.

If you're planning to retire within the next decade or so, you're likely examining your retirement plan and thinking about how well you've saved and invested. (It's possible to save $1 million even if you don't earn a six-figure salary.)

If you find that you're way behind and haven't saved nearly enough for your future, there are ways to try to catch up to where you should be. One strategy is to need less money by moving to a less costly location. Here's a look at various states where your retirement dollars could go much further.

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Where you might retire on less than $65,000 per year

A little online digging will turn up lots of lists of promising places to relocate to if you're considering it x. One such list comes from GOBankingRates, which found that the annual cost of retirement in the U.S. was recently $66,870 -- and that you could retire in these states on $65,000 or less per year:

• Alabama: $61,176
• Arkansas: $61,454
• Georgia: $63,398
• Illinois: $64,787
• Indiana: $62,704
• Iowa: $62,565
• Kansas: $60,620
• Kentucky: $64,301
• Louisiana: $63,954
• Michigan: $63,745
• Mississippi: $61,315
• Missouri: $61,454
• Nebraska: $64,856
• New Mexico: $64,995
• Oklahoma: $59,995
• South Dakota: $64,856
• Tennessee: $62,704
• Texas: $64,162

Here's a closer look at three of these states:

Iowa

Iowa has a lot to offer retirees, starting with a cost-of-living index for 2024 of 90, according to the World Population Review. That means it costs roughly 90% of the national average to live there.

Housing is particularly low, with a typical Iowa home recently valued at $219,392, Zillow says, well below the recent typical home value in the U.S. of $361,293. Another plus is that it is one of four states that don't tax retirement income, including Social Security benefits.

Iowa also has plenty of outdoor recreational activities, such as camping, fishing, hiking, and more, according to the website Unbiased (which recommends financial advisors) -- and its cities offer plenty of cultural events as well. Note, though, that winters can be cold, and strong thunderstorms are not uncommon.

Michigan

Michigan also has a cost-of-living index of 90 for 2024 (though remember that, as in every case, costs will vary depending on precisely where you live in any state). The typical home price in Michigan was recently $247,917, and the median household income was 27% of the typical home value. (In much more costly Massachusetts, that number was 15%.) Michigan also doesn't tax Social Security benefits.

Like Iowa, it also offers lots of outdoor recreation opportunities and cultural events -- particularly around the college town of Ann Arbor. Also like Iowa, it has cold winters and plenty of snow.

Texas

You can escape much of the cold weather and snow by retiring to Texas, where the cost of living was recently 93 (again, depending exactly where in Texas you are). The typical home value there was recently $303,861. Texas doesn't tax income, which can be a plus if you expect a lot of income in retirement. Social Security benefits are also not taxed by Texas.

There's less winter weather in Texas, but the state experiences plenty of natural disasters, too, such as flooding, hurricanes, and tornadoes. Healthcare costs less than in many states, but its quality is less than in many states, too.

Where you might retire for 20 years with less than $1 million

Another report from GOBankingRates listed 27 states where you could retire comfortably for 20 years with less than $1 million. In Kentucky, for example, the annual cost of a comfortable retirement (defined as having necessities such as housing and healthcare covered, with 20% extra) was found to be $72,899.

The cost of 20 years of a comfortable retirement with Social Security was $557,577, and without Social Security, $1,007,774. It's good that GOBankingRates included some numbers without Social Security, because unless the program is strengthened, retirees are set to receive smaller benefits in the future, and some of President Donald Trump's proposals may hasten smaller benefits.)

Beware of lists like this, though, because they're targeting only 20 years of retirement. What if you retire at, say, 62 and live to 85? That's 23 years. What if you reach 90 to 95, as plenty of people do these days? That would give you 28 to 33 years of retirement. It's best to hope and plan for a very long retirement -- just in case.

Thinking through the relocation decision

As you plan for how you'll retire successfully and comfortably, keep in mind:

• Inflation: Inflation has the power to shrink the purchasing power of your dollars by half -- or more! -- over 25 years. So seek income streams that increase over time, or plan to sock away a lot in your nest egg. Social Security features cost-of-living adjustments, but not automatically each year.
• Healthcare: Healthcare costs in retirement are notoriously steep, so save for that, and plan to make some savvy decisions when the time comes, such as the best Medicare Advantage plan for yourself.

Remember that relocating isn't your only option. You might downsize to a smaller home in your same area so you can stay close to friends and family. Or you might get creative and take in a boarder for a while.

However you do it, be sure to have a good retirement plan in place.

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