The 10 Best States To Retire at 40 That Don’t Require You To Be a Millionaire

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Many Americans dream of living the retirement lifestyle. They may envision lives full of travel and enjoying drinks with tiny umbrellas on secluded beaches. Early retirement flips the mentality of working for decades in an office, with fewer years to enjoy life. The financial independence, retire early (FIRE) movement epitomizes that desire through aggressive investing to enable aspirants to retire as early as 40 years old.

FIRE devotees often use the 4% rule to determine if they can retire early. The rule is simple: You add all your investments together and withdraw 4% of the total in your first year of retirement. That amount is adjusted for inflation in the following years and assumes the likelihood of not outliving your resources for the following three decades.

Additionally, early retirement requires increasingly purposeful spending and saving in early years to achieve the goal. Retiring at 40 is seemingly impossible, but it’s achievable with purposeful actions, notably finding a low-cost-of-living place to live.

A recent study from Falcon Funded reveals the best states to retire at 40, and none of them require millionaire status. The study looks at monthly cost of living for one person without rent, average monthly rent for a one-bedroom apartment, annual healthcare costs and annual cost of living with rent. The annual amount was multiplied by 25 to determine the required retirement savings.

Also find out how much you need to save monthly to retire comfortably in every state.

Mississippi

• Monthly cost of living per person (without rent): $807
• Average monthly rent (one bedroom): $973
• Annual healthcare cost: $9,394
• Annual cost of living with rent: $30,754
• 4% rule for withdrawals: $768,850

Iowa

• Monthly cost of living per person (without rent): $863
• Average monthly rent (one bedroom): $955
• Annual healthcare cost: $9,789
• Annual cost of living with rent: $31,605
• 4% rule for withdrawals: $790,125

Kansas

• Monthly cost of living per person (without rent): $1,138
• Average monthly rent (one bedroom): $943
• Annual healthcare cost: $9,408
• Annual cost of living with rent: $34,369
• 4% rule for withdrawals: $859,230

New Mexico

• Monthly cost of living per person (without rent): $1,047
• Average monthly rent (one bedroom): $1,139
• Annual healthcare cost: $8,902
• Annual cost of living with rent: $35,132
• 4% rule for withdrawals: $878,305

Oklahoma

• Monthly cost of living per person (without rent): $1,146
• Average monthly rent (one bedroom): $1,010
• Annual healthcare cost: $9,444
• Annual cost of living with rent: $35,318
• 4% rule for withdrawals: $882,960

North Dakota

• Monthly cost of living per person (without rent): $1,087
• Average monthly rent (one bedroom): $935
• Annual healthcare cost: $11,301
• Annual cost of living with rent: $35,566
• 4% rule for withdrawals: $889,158

West Virginia

• Monthly cost of living per person (without rent): $990
• Average monthly rent (one bedroom): $914
• Annual healthcare cost: $12,769
• Annual cost of living with rent: $35,612
• 4% rule for withdrawals: $890,308

South Dakota

• Monthly cost of living per person (without rent): $1,095
• Average monthly rent (one bedroom): $974
• Annual healthcare cost: $12,495
• Annual cost of living with rent: $37,328
• 4% rule for withdrawals: $933,201

Alabama

• Monthly cost of living per person (without rent): $1,162
• Average monthly rent (one bedroom): $1,200
• Annual healthcare cost: $9,280
• Annual cost of living with rent: $37,628
• 4% rule for withdrawals: $940,690

Arkansas

• Monthly cost of living per person (without rent): $1,083
• Average monthly rent (one bedroom): $1,276
• Annual healthcare cost: $9,338
• Annual cost of living with rent: $37,639
• 4% rule for withdrawals: $940,970

The Bottom Line

Risks aside, retiring at 40 is possible with committed action.

“A person aiming to retire at 40 needs to think far beyond lifestyle goals — they need to think geographically. Housing remains the biggest driver, but healthcare and quality of life metrics also shift the savings target dramatically from state to state,” said Nathan Nolan, a spokesperson from Falcon Funded. “Even small differences in monthly expenses can add up to hundreds of thousands in retirement savings over time.”

Before beginning a journey towards early retirement, analyze the risks to create a plan to guide your decisions.

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