Retirement can feel very different depending on where you live.
The same Social Security check or retirement savings that feels stretched thin in one state could potentially cover much more in another — simply because housing, groceries, utilities, transportation and healthcare cost less.
So where does your retirement money currently have the most buying power?
According to second-quarter 2026 cost-of-living data from the Missouri Economic Research and Information Center (MERIC), these 10 states have the lowest overall costs of living in the country.
10. Tennessee
Tennessee rounds out the top 10, with an overall cost-of-living index of 89.7, compared with a national benchmark of 100.
Housing is particularly affordable, with an index of just 80.0.
Transportation and healthcare costs also come in below the national benchmark.
For retirees trying to make a fixed monthly income stretch further, those everyday savings can add up.
9. Indiana
Indiana ties Tennessee with an overall cost-of-living index of 89.7.
Housing stands out here, too. Indiana’s housing index is just 77.5, meaning housing costs in the areas measured are substantially below the national benchmark.
Healthcare also comes in below average.
That combination could make Indiana worth considering for retirees who don’t mind trading palm trees for four distinct seasons.
8. Arkansas
Arkansas comes in eighth with an overall index of 89.0.
Housing is one of its biggest advantages, with an index of 76.9.
Healthcare costs also score particularly well at 85.5 compared with the national benchmark of 100.
For retirees, that’s important. Housing and medical expenses can consume a substantial portion of a retirement budget.
7. Missouri
Missouri’s overall cost-of-living index sits at 88.2.
Its housing index is just 77.7, while transportation comes in at 85.3.
The state also offers a wide variety of places to live, from larger metropolitan areas to smaller towns and rural communities.
In other words, retirees looking for lower costs don’t necessarily have to give up access to city amenities.
6. Mississippi
Mississippi has an overall cost-of-living index of 87.4.
Housing is particularly inexpensive compared with much of the country, with an index of just 70.8.
Healthcare costs also come in considerably below the national benchmark.
A separate 2026 analysis of expenses for retirees found Mississippi had the lowest estimated monthly cost of necessities among the states it examined.
That could make a meaningful difference for someone living primarily on Social Security, a pension or withdrawals from retirement savings.
5. Kansas
Kansas may not immediately spring to mind when you picture retirement, but your wallet may appreciate it.
Its overall cost-of-living index is 87.1.
Housing, transportation and healthcare all come in below the national benchmark, helping keep everyday expenses relatively manageable.
For someone who prioritizes affordability over beaches and year-round warm weather, Kansas could be worth a closer look.
4. West Virginia
West Virginia takes fourth place with an overall cost-of-living index of 87.0.
Housing is especially inexpensive, with an index of just 69.9.
Healthcare costs also come in well below the national benchmark.
And there’s another interesting data point: a separate Bankrate retirement study ranked West Virginia first in the country specifically for affordability.
Of course, affordability isn’t everything. Access to healthcare, proximity to family, weather and lifestyle can matter just as much in retirement.
But purely from a budget perspective, West Virginia stands out.
3. Iowa
Iowa comes in third with an overall cost-of-living index of 86.1.
Housing has an index of just 70.6, while utilities come in at an especially low 81.7.
Groceries and healthcare are also below the national benchmark.
That combination means many of the expenses retirees encounter month after month may cost less than they would elsewhere.
2. Alabama
Alabama takes the second spot with an overall cost-of-living index of 86.0.
Its housing index is only 68.6, and healthcare comes in at 85.2.
Groceries, utilities and transportation are also below the national benchmark.
For retirees who want a warmer climate without some of the costs associated with more famous retirement destinations, Alabama could be an interesting alternative.
1. Oklahoma
And the state with the lowest overall cost of living in the latest data is…
Oklahoma.
Its overall cost-of-living index is just 83.0 — the lowest in the country in MERIC’s second-quarter 2026 data.
Housing is the standout.
Oklahoma’s housing index is only 65.1, far below the national benchmark of 100.
Transportation is also particularly inexpensive, while groceries and healthcare remain below the national benchmark.
That combination gives Oklahoma a substantial cost advantage for someone trying to stretch a fixed retirement income.
But Don’t Move Based on Cost Alone
There’s an important catch to rankings like these.
The cheapest state isn’t necessarily the best state for you to retire in.
Healthcare quality and availability, taxes, property insurance, crime, weather, proximity to family and even access to entertainment can dramatically change the retirement equation.
In fact, a broader Bankrate study that considered affordability alongside healthcare, safety, taxes, weather and quality-of-life factors produced a very different list of desirable retirement states.
That’s why it’s useful to think of affordability as one piece of the puzzle rather than the entire puzzle.
There’s also enormous variation within states. A desirable neighborhood in a major city can be much more expensive than a smaller town just an hour away.
How Expensive Is Your State?
For comparison, the national cost-of-living benchmark is 100.
At the opposite end of the spectrum, several states currently sit considerably above it.
California has an index of 140.3, Massachusetts 148.1, and Hawaii a whopping 185.8.
Housing is one of the biggest reasons for the difference.
Hawaii’s housing index is more than 300, while Massachusetts is above 200.
That’s a dramatic contrast with Oklahoma’s housing index of just 65.1.
For someone living on a fixed retirement income, geography can therefore make an enormous difference in how far each dollar goes.
You don’t necessarily need a bigger retirement account to increase your purchasing power.
Sometimes, where you live can change how far the money you already have will go.
If you’re approaching retirement — or wondering why your retirement budget suddenly feels tighter — comparing the cost of housing, healthcare, groceries, utilities and transportation in different parts of the country may be worth doing.
Because a $2,000 or $3,000 monthly retirement income can feel very different depending on your ZIP code.
