1. Birmingham, Ala.
- Annual expenditures: $33,219
- Annual amount spent on housing: $5,242
- Annual amount spent on health: $4,915
Alabama’s largest city is the cheapest place to retire. The cost of living in Birmingham is 27.4 percent lower than the national average. The annual amount spent on health here is the lowest of any city on our list. And Birmingham has the third lowest transportation costs and fourth lowest annual amount spent on housing.
Plus, the city has plenty to keep retirees busy. Its local parks give Birmingham more green space per capita than any other U.S. city. It has 15 golf courses, several nearby lakes that offer some of the best fishing in the South, a variety of festivals and events throughout the year, and schools such as University of Alabama at Birmingham and Samford University that provide an abundance of concerts and arts programming.
Keep reading to see the most tax-friendly states for retirees.
Methodology: GOBankingRates examined six cost of living factors for 150 U.S. cities from Sperling's Best Places on Aug. 28, 2017: 1) overall cost of living index; 2) housing index, which includes mortgage payments and rent costs; 3) grocery index; 4) transportation index; 5) health index; and 6) utilities index.
Then, GOBankingRates compared each city's index to the average annual expenditures from Americans aged 65 and over from the U.S. Bureau of Labor Statistics Consumer Expenditure Survey 2015 to come up with a formula to predict annual expenses in each city. All data and analyses mentioned in this article is accurate as of September 2017.