7 States Where You Can Retire Younger in 2025

The average retirement age in the U.S. is 62 years old, as per a MassMututal survey. That said, there are still some states where you can retire younger than that.

If you’re planning on retiring a little early, make sure you’ve got your finances sorted. Once you do that, the next step might be to figure out where you want to retire.

Here are some states where you can retire younger in 2025, and an overview of how much it costs to live there. The average annual cost of living and how long retirement savings will last (based on a $1 million nest egg) comes from a recent GOBankingRates study. Annual costs include groceries, housing, utilities, transportation and healthcare. The cost of living indexes come from the Missouri Economic Research and Information Center data.

Take a closer look at these places where you might be able to retire sooner.

• Overall cost of living index: 90.8
• Average annual cost of living: $52,267
• How long $1 million will last: 19 years, 1 month, 17 days

Everything from groceries to housing to healthcare is less expensive in Tennessee than in other parts of the country. Those who can live a bit more frugally could get by on closer to $35,000 to $45,000 a year, meaning their retirement savings will last much longer.

“Retiring younger than the typical age of 62-65 is a dream for many, and achieving this often depends on choosing a location with a lower cost of living,” said Daniel Morris, founder of Senior Living Interviews. “Tennessee is a great option for retirees due to its low cost of living, especially in housing.”

There are also no state income taxes on wages.

• Overall cost of living index: 88.5
• Average annual cost of living: $51,169
• How long $1 million will last: 19 years, 6 months, 15 days

Arkansas has a cost of living index lower than the national average on everything from transportation to housing to medical. Those who want to enjoy an early retirement have a much better chance of achieving this goal there.

“Arkansas is a great choice for retirees due to its low cost of living,” Morris said. “Retirees can enjoy Arkansas’ natural beauty, relaxed lifestyle and friendly communities.”

• Overall cost of living index: 87.7
• Average annual cost of living: $50,128
• How long $1 million will last: 19 years, 11 months, 12 days

“Mississippi is ideal for retirees due to its low cost of living,” Morris said. “Housing is very affordable, and the state offers a warm climate, rich cultural history and Southern hospitality, making it a comfortable and welcoming place to retire.”

While cost estimates for any location do vary based on lifestyle preferences, healthcare and dietary needs, and existing financial obligations, Mississippi is still one of the least expensive places to live — and to retire.

• Overall cost of living index: 85.3
• Average annual cost of living: $50,186
• How long $1 million will last: 19 years, 11 months, 5 days

On the whole, the cost of living in Oklahoma is lower across the board than it is in every other state — except, perhaps, West Virginia. Annual expenses are lower on everything, especially housing.

“Oklahoma is a great spot for retirees,” Morris said.

Much of the state is rural, but this can be a good thing for those seeking a quieter lifestyle.

• Overall cost of living index: 87.6
• Average annual cost of living: $50,995
• How long $1 million will last: 19 years, 7 months, 11 days

As Morris pointed out, Alabama is also a budget-friendly state for anyone who wants to live there. Some areas, like Madison, are more expensive. But much of the state is still very affordable — especially when it comes to healthcare and housing. It’s also an ideal place to retire for those who love beaches and the heat.

• Overall cost of living index: 90.9
• Average annual cost of living: $52,557
• How long $1 million will last: 19 years, 0 months, 11 days

Georgia is another affordable option — and a solid choice for those looking to retire early. Housing is especially affordable, though healthcare, utilities and the like are also lower than the national average.

The average annual cost of living is a bit higher than it is in other states, but even a $1 million nest egg can go far there.

• Overall cost of living index: 93.1
• Average annual cost of living: $53,886
• How long $1 million will last: 18 years, 6 months, 23 days

Last but not least, Morris suggested Kentucky as a go-to state for early retirees.

“Housing is particularly cheap,” he said.

This combined with the state’s rich history and beautiful landscapes make it another great option for retirees.

Your financial needs will be different from the next person’s, so it’s important to prepare ahead of time. Depending on your situation, having some flexibility in your retirement date or location could help.

“If you’re not set on a specific state, focusing on key financial factors can help you retire early regardless of location. One critical consideration is healthcare costs, which can vary widely across the country. States with lower medical expenses and access to quality care can help preserve your retirement savings,” said Derek DiManno, founding financial advisor at Flagship Asset Services.

DiManno also suggested looking into overall housing affordability and choosing an area with low property taxes. You might also want to allocate a larger annual sum toward retirement — say, $40,000 to $60,000. That way, you can live comfortably and handle anything that comes up.

Take a look at your current retirement savings and divide how much you have by the number of years you expect to need in retirement. For example, say you have $1 million and are planning for a 30-year retirement. That’d only give you $33,000 a year. To ensure a comfortable retirement, you might need to save up closer to $2 million — and allocate your savings in interest-bearing accounts.

Methodology: In order to find how long $1,000,000 will last across the country, GOBankingRates first found (1) the national average annual expenditures for people 65 and older, sourced from the Bureau of Labor Statistics’ 2022 Consumer Expenditure Survey data. Then, GOBankingRates created (2) state-level annual expenditure estimates by multiplying the national figure by each state’s overall cost of living index score for the 3Q 2023 from the Missouri Economic Research and Information Center. Finally, GOBankingRates found (3) how many years $1,000,000 will last in each state by dividing $1,000,000 by each state’s average annual expenditures estimate. All 50 states and the District of Columbia were then ranked with No. 1 being the state where $1,000,000 will last the longest and No. 51 being the state where it will run out most quickly. GOBankingRates provided supplemental information on the average annual cost of groceries, housing, utilities, transportation, and healthcare for people 65 and older in each state by again using MERIC’s cost of living indices for each category to factor out national estimates from the CES. All data was collected on and up to date as of April 23, 2024.