The average Social Security benefit for retired workers is $1,360 per month as of January 2017. That comes out to $16,320 in benefits for a single person annually or $32,640 per year for a couple — about $20,000 less than the U.S. median household income of $56,516.
Living on a fixed income basically means you're solely or almost entirely dependent on funds like Social Security, pensions, inheritance and so on, with little to no flexibility in the amount you're paid. Unstable costs, such as a volatile housing market, can be especially challenging to deal with on a fixed income.
To find the No. 1 metro area in each state to live on a fixed income, GOBankingRates conducted a state-by-state cost-of-living comparison study — with the exception of Maine and South Dakota, due to insufficient data for those states. Although these aren't the cheapest places to live, they do offer stable housing expenses and overall cost of living. Click through to see the best places to live on a fixed income.
The Birmingham metro area has seen its home values recover to levels comparable to values before the housing market crash. Residents living on fixed incomes can benefit from the area's stable and affordable housing market, with home values rising just under 4 percent year over year, while rents went down. The cost of living in the Birmingham-Hoover metro area is cheaper than the national average, according to CareerTrends.com.
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The cost of living in Alaska tends to be more expensive than most places in the country. However, Alaska balances higher living costs by having no state sales tax, as well as no taxes on Social Security benefits.
The biggest obstacle for residents who live on a fixed income is the cost of housing in Anchorage. The city's $1,830 median rent is among the highest rates in the study. Although expensive, home values and rents haven't moved much year over year, which bodes well for people who are looking for a stable economic climate.
Arizona: Sierra Vista
Sierra Vista's cost of living is several percentage points less than the national average and just a hair below that of Phoenix. Home values in Sierra Vista rose less than 3 percent year over year, which is less than Arizona's statewide increase of 7.6 percent for the same time period.
Arkansas: Pine Bluff
Pine Bluff's cost of living is around 20 percent less than the national average, and also slightly cheaper than the average for Arkansas overall. Rental prices are very favorable for people who don't have flexibility with their income. Plus, Pine Bluff's median rent of $759 is the cheapest in this study.
California: Red Bluff
California has earned a reputation for expensive housing, and several of its cities are seeing skyrocketing home prices. Housing costs in Red Bluff, however, are more modest than the state overall. The city's $1,103 median rent is about $1,400 cheaper than the state's median rent list price.
Cost of living in Red Bluff is around the national average, with health and transportation costs that are slightly more expensive than the U.S. overall.
Colorado: Grand Junction
Home values in Grand Junction are slightly higher than the U.S. median home value. In a good sign for the market, home values have largely recovered from the crash, but also haven't exceeded the peak of the bubble.
Rents also dropped after the housing bubble burst. However, the median rent has continued to stay relatively stable at around $1,100 since 2011.
Connecticut: New Haven
New Haven's cost of living is more than 25 percent higher than the national average, which can be a drawback for people on fixed incomes. However, the median rent only increased 1.1 percent from last year. And taking into account rental prices, mortgage payments and property tax, New Haven's housing costs are 20 percent lower than the U.S. overall.
Delaware is one of the lucky few states that doesn't levy a state sales tax. It also does not tax Social Security benefits, which makes it one of the best places to retire in the U.S. In the past year, Dover home values rose 1.5 percent, while rents decreased 1 percent.
Florida: Panama City
Many Florida cities often rank among the best places to retire. But Panama City provides a good climate for residents on a fixed income.
Housing prices in many Florida cities are back on the rise after the bursting of the bubble, but Panama City's market is comparatively calmer. Although its median home value has risen more than 8 percent year over year, Panama City's rent prices only increased by 1 percent and are cheaper than the median rent for Florida overall.
Savannah offers people living on fixed incomes an affordable cost of living, with housing costs that are almost 40 percent less than that of the U.S. Savannah's median home value is a bit higher than the state median, but lower than the U.S. median of $195,700. Home values have rebounded from the worst of the housing crash, as have rental prices, but the median rent has been more stable in the past two years.
Hilo's median home value rose nearly 8 percent year over year to its current level of $339,800. That is the second-highest home value in the study. But rents have increased by much less in the past year, about 3 percent to $1,504. The cost of living in Hilo is around 50 percent higher than the U.S. average, with utilities costing roughly double.
Idaho: Idaho Falls
Home values have recovered to their pre-crash level, according to Zillow data. But the current median home value in Idaho Falls, $149,100, is still well below the national median. The median rent for the city didn't rise or fall year over year. An additional bonus for residents who live on a fixed income is the city's low cost of living compared to the U.S. average.
Livings costs in Champaign-Urbana are slightly higher than the U.S. average. But the median home value is roughly $60,000 cheaper than the U.S. median home value, making homeownership a little more accessible for people who live on a fixed income.
Bedford can help people save money on living expenses, compared to the U.S. average. Although all of Bedford's individual living costs beat the national average, the city's housing costs, at 46 percent of the national average, are the real money-saver. Home values and rent prices barely budged year over year, and Bedford's $841 median rent is the third-cheapest in the study.
Iowa: Cedar Rapids
Rental prices in Cedar Rapids are fairly stable. The median rent is $1,093, having risen by a fraction of a percent year over year. Since 2014, the median rent has consistently hovered around $1,100 or less. This helps contribute to an overall cost of living that is below that of the U.S. overall.
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The capital of Kansas has an overall cost of living that is cheaper than the U.S. cost of living, especially when it comes to healthcare costs, which are 15 percent below the national average, according to CareerTrends. Also, utility costs will eat less of your fixed income in Topeka compared to other cities.
Kentucky's cost of living is 9 percent below the nation's average. Elizabethtown's cost of living, at 13 percent below the national average, is even cheaper compared to the U.S. overall. Home values increased 5 percent in the past year to a median of $129,500, but rents decreased 1 percent for a median rent of $989.
Home values in Lafayette grew 8 percent year over year. Fortunately, for people on a restricted income, the median rent dropped more than 5 percent, down to $1,219.
Although this is hardly the cheapest rent in the U.S., it's better than the national median rent of $1,413. Another boon to fixed-income residents is the cost of living, which is roughly 11 percent cheaper than the country on average.
Hagerstown has a cost of living that is slightly above the U.S. average. However, it also boasts low healthcare costs, almost 30 percent cheaper than the country on average.
Massachusetts: Cape Cod
If you're surprised that Cape Cod would make the list, don't be. Out of the metro areas in Massachusetts, the Cape Cod metro area has seen the smallest percentage increase in median rent year over year. Rental prices have been pretty stable since January 2015, hovering around $1,900 per month.
Although health and transportation costs are more expensive in Jackson than the U.S. in general, housing costs are significantly cheaper. Home values increased close to 4 percent since last year, but rents went down and Jackson's median rent of $870 is more than $500 cheaper than the Zillow Rent Index for the U.S.
Duluth home values have risen pretty consistently since 2013, and the housing market is healthy, according to Zillow's Market Health Index. The median rent in Duluth, $1,093, is a few hundred dollars less than the national median rent of $1,413.
The cost of living in Duluth is lower than the U.S. overall, with housing expenses costing around 20 percent less than the national average.
The cost of living in Mississippi is one of the lowest in the U.S., which is essential in helping retirees and other Americans on fixed incomes make their money last.
Cheap housing costs — which are nearly half that of the U.S. average — help Vicksburg residents keep more money in their wallets. By way of the comparison, cost of living in Vicksburg is 70 percent cheaper than Los Angeles; housing expenses in the latter city cost well over double the amount of that in Vicksburg.
Joplin's overall cost of living is about 13 percent cheaper than the U.S. average, but its housing expenses are even cheaper, costing 24 percent less than the national average. Year over year, median rent dropped by more than 8 percent to a very affordable $761 per month.
Montana: Great Falls
Although home values in Great Falls have rebounded to their housing bubble peak, the median rent only increased about 1 percent year over year. According to CareerTrends, the cost of living in Great Falls is only a little cheaper than the national average. However, housing costs are nearly 20 percent lower than that of the U.S. overall.
Nebraska: North Platte
Housing costs in North Platte are at 63 percent of the U.S. average. Home values have shown some serious growth year over year, but North Platte's median home value of $142,700 is still nearly $50,000 less than the U.S. median.
The median home value in Elko is higher than most of the cities in this study. Although comparatively high, home values in Elko still haven't exceeded the peak they reached during the housing bubble, according to Zillow.
The cost of living in Elko is just above the U.S. average, with housing costs about 20 percent higher than the country's average. On the other hand, rental costs are on the decline. The median rent dropped almost 9 percent year over year to $1,320.
New Hampshire: Keene
New Hampshire is the best state — in terms of income levels, safety and other quality-of-life factors — if you want to create a richer life for your family. Cost of living in Keene is higher than the national average, although housing expenses, in general, are nearly 20 percent cheaper than the national average.
New Jersey: Trenton
The capital of New Jersey is a bit cheaper in terms of cost of living, with housing costs, in general, being the biggest money-saver when compared to the U.S. average. Although the Trenton metro area has a median home value north of $225,000, the city of Trenton proper has a much lower median home value of $85,200. Rents are also cheaper in the city of Trenton versus the Trenton metro area overall.
New Mexico: Las Cruces
The cost of living in Las Cruces is about 10 percent less than the U.S. average, according to CareerTrends. The median rent increased 3 percent quarter over quarter, but less than 1 percent year over year. Renters pay a median of $980 monthly to live in Las Cruces, which is one of the cheaper median rents in the study.
New York: Olean
Olean is in western New York, near the state's southern border with Pennsylvania. And unlike the state's reputation for being expensive — namely because of New York City — the cost of living in Olean is pretty affordable.
Housing costs are 75 percent cheaper than the U.S. average. In fact, out of all the cities in this study, Olean had the lowest median home value, $72,000, with no change year over year.
North Carolina: Fayetteville
Home values are rising faster than rents in Fayetteville, 3.4 percent year over year versus 0.1 percent, respectively. With a median rent of $892, Fayetteville ranks among the cheapest cities in the study to rent property.
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North Dakota: Fargo
Home values and rents in Fargo have increased during the past few years. However, since 2015, the median rent stabilized between $1,299 and $1,400 per month. Beyond housing, the overall cost of living is approximately 7 percent cheaper than the country average, according to CareerTrends.
Across the board, everyday expenses such as groceries, utilities, transportation and others are lower in Ashtabula than the U.S. average. But housing costs are significantly cheaper in Ashtabula than in the nation overall. Even with 7.7 percent year over year growth in home values, Ashtabula's median home value is one of the lowest in the study at $85,000.
When compared to the country's average cost of living, Ardmore is cheaper, with housing, in particular, being 27 percent cheaper than the U.S. overall. Ardmore's median rent of $863 is the fifth-lowest in the study, having dropped more than 6 percent year over year.
The two cities of Hermiston and Pendleton comprise the Hermiston-Pendleton metro area. Both cities saw home values rise between 3 and 6 percent year over year. However, despite the similarities between the cities, their respective housing markets are on different courses.
Home values in Hermiston have risen consistently since 2012, with the median list price keeping up. Pendleton, on the other hand, has seen its home values increase since 2013 while its median list price dropped by almost $50,000 — from roughly $189,000 in May 2014 to $150,000 by October 2015. Everyday costs in Hermiston and Pendleton are just under the U.S. average cost of living, but health and transportation expenses are higher, according to BestPlaces.net.
With an overall cost of living that's 6 percent below the national average, Scranton can help retirees and soon-to-be-retirees stretch their income further.
Housing costs are very low in Scranton when compared nationally. Home values inched up less than 2 percent year over year. At the same time, the Zillow Rent Index dropped more than 7 percent, for a relatively cheap median rent of $974.
Rhode Island: Providence
New England can be fairly pricey in certain locations. Fortunately for Providence residents, housing costs are 15 percent cheaper than the national average, according to Best Places. Providence also has overall costs of living that are more affordable than other Rhode Island cities such as Cranston and Warwick.
South Carolina: Seneca
South Carolina doesn't tax Social Security benefits, and the average effective property tax rate is only 0.55 percent, one of the lowest in the country, according to Tax Foundation.
Seneca's cost of living is cheaper than the national average, especially its housing expenses. And where the state's median home value grew by almost 10 percent year over year, the median home value in Seneca rose less than 3 percent. Meanwhile, rents became more affordable as the median rent dropped close to 6 percent since last year, to $1,018.
Tennessee: Johnson City
People living on fixed incomes can benefit from low volatility and steady growth of home values in Johnson City. The metro area's median home value rose 1.7 percent year over year.
Another money-saver for fixed income residents are rent costs. The median rent in Johnson City has stabilized since 2014, increasing year over year from 2016, but still below $1,000. In addition, Johnson City's average living costs are markedly lower than the national average.
Texas: El Paso
El Paso's low housing costs could be greatly beneficial to someone on a fixed income. Home values crept up by about 2 percent year over year, while rents got cheaper. The overall cost of living in El Paso is less expensive than the U.S. average.
Texas is one of the handful of U.S. states that don't have a state income tax. Nor does it tax Social Security benefits. However, Texas has a notable drawback: It has the nation's sixth-highest property tax rate.
Utah: St. George
St. George is located in the deep south of Utah, on the state border with Arizona. The overall cost of living in Utah is 7 percent less than that of the U.S. overall, and the cost of living in St. George is even lower, at 9 percent less than the U.S. average.
Southeast of Vermont's capital Montpelier, Barre is a suburb with a population of fewer than 10,000 people. Barre's cost of living is on par with the rest of the country. Housing costs, however, are almost 20 percent lower than the U.S. average.
Roanoke's cost of living is just below the U.S. average. But its cost of housing, in general, is 14 percent cheaper than the national average. The median home value is $151,900, about $44,000 less than the U.S. median home value. The median rent is $1,099, about $300 cheaper than the U.S. median rent.
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Washington: Moses Lake
Home values are on the rise in Moses Lake, increasing 5.7 percent year over year to a current median of $134,000. Rents, however, have been on the decline, with the median rent dropping more than 3 percent to a very affordable $894 per month.
Overall, the cost of living in Moses Lake is cheaper than the rest of the country, but housing costs are markedly lower than the U.S. average.
West Virginia: Charleston
Housing costs in Charleston are low compared to the national average. The median rent in Charleston, at $903, is $500 less than the national median.
Home values took a dive from March 2013 to April 2014. Excluding that period, the median home value in Charleston has steadily increased in the years since the depths of the crash. The median home value rose about 4 percent year over year, although at $90,400, it is still $100,000 less than the U.S. median of $195,700.
Wisconsin: Green Bay
Green Bay home values rebounded a lot since the housing crash. In fact, the median home value for the Green Bay metro area grew 7 percent year over year, and is over $10,000 higher than where it peaked in 2009.
Home values are projected to continue their rise, which can help retirees on fixed incomes by increasing the value of their house. This can be very beneficial if prolonged costs wipe out your retirement savings, leaving your home as your only financial asset.
The Casper housing market was volatile during the past 10 years. In February 2009, Casper's Zillow Home Value Index reached $199,000, before it went into freefall, bottoming out at about $157,000 in 2012.
Home values in Casper recovered over the years, although the median home value, now at $184,700, still hasn't exceeded its high point during the peak of the bubble. Instead, home values have stabilized, while rental costs got cheaper, with the median rent declining 14 percent year over year to $1,165.
Methodology: GOBankingRates sourced its list by identifying the five metro areas in each state with the smallest percentages of 1) quarter-over-quarter and 2) year-over-year changes in Zillow Home Value Index (ZHVI) and Zillow Rent Index (ZRI), based on Zillow's data as of the end of January 2017. Based on these percentages, one area was chosen from each state and given a score from 1 to 16, with 1 being the best. 3) Cost of living was sourced from Numbeo, CareerTrends and Sperling's Best Places indices. This study excluded Maine and South Dakota due to insufficient data for those states.