7 Best States for Retirees To Stretch Their Savings in 2026, According to Retirement Planners
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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Picking a retirement location that’s affordable and still meets a retiree’s many other needs can be tricky. The cheapest states may lack key amenities or be too far from family and friends.
Retirement planners suggest a balanced approach that evaluates “savings alongside access to family, healthcare quality, transportation and community engagement,” according to Christopher Stroup, a CFP and owner of Silicon Beach Financial.
While the following states can help retirees stretch their savings, Lynn Toomey, founder of Her Retirement, cautioned, “The best retirement state depends on how income, health, housing and lifestyle actually work together in real life.“
Florida and Tennessee: Tax-Friendly States That Still Require Planning
Florida and Tennessee consistently rank among the most attractive retirement states because they do not tax personal income or Social Security. They also offer “competitive property taxes, expanding healthcare networks, diverse housing options and climates that support year-round livability without excessive cost burdens,” Stroup said.
Florida also provides good access to healthcare, a key concern for retirees, said Chad Silver, a tax attorney, CEO and founder of Silver Tax Group. However, climate risk is real in both states, and Florida in particular “only works when retirees plan housing and insurance carefully,” Toomey said.
Additionally, while both states may have more affordable housing compared to much of the country, costs can still vary widely, “so retirees who choose inland or secondary markets can [better] control expenses,” Toomey said.
North Carolina and Pennsylvania: Moderate Taxes With Strong Healthcare Access
For retirees willing to accept some state income tax in exchange for stable housing costs and robust medical systems, North Carolina and Pennsylvania offer a balanced alternative to zero-tax states, Toomey said.
North Carolina is a strong option for retirees “who like the balance of four seasons,” along with access to strong healthcare systems, diverse housing markets and reasonable property taxes, she said.
Pennsylvania also has some surprising benefits, including no tax on Social Security, pensions or most retirement income, Toomey said. That favorable tax treatment can help offset higher utility costs tied to winter weather.
Still, Stroup warned retirees not to over-prioritize tax savings at the expense of other long-term considerations. “Retirees also underestimate future care costs and mobility needs, which can quickly offset initial savings from relocating to a lower-cost state,” he said.
Arizona and the Southwest: Lifestyle Appeal With Rising Costs
Arizona remains popular with retirees seeking dry climates and outdoor living, but Toomey stressed the importance of budgeting for rising housing prices, utilities and heat-related expenses.
States like Arizona and others with a slightly higher cost of living “can be justified when it improves medical outcomes and daily life satisfaction,” Stroup said. “These tradeoffs often reduce long-term financial stress rather than increase it.”
Wyoming and South Dakota: Maximum Tax Savings, Higher Lifestyle Tradeoffs
Wyoming and South Dakota also offer favorable tax treatment for retirees, but they come with greater lifestyle tradeoffs, Toomey noted. “It works best for those who value space and outdoor living and are comfortable planning ahead for limited healthcare access and long winters,” she said.
As long as retirees plan for winter weather and choose locations near medical centers, they may be able to stretch savings without giving up livability.
How Retirees Can Choose the Right State in 2026
Before making a move, retirees should visit and “test” potential locations, Toomey urged. That process can include running full cash-flow projections and pricing out healthcare access, transportation and support systems alongside tax savings. “Pure cost savings rarely win long term,” she said, noting that travel costs, caregiving needs and isolation can quietly drain retirement budgets.
“I believe a slightly higher cost area often produces better financial outcomes if it reduces stress, improves health and keeps support systems close,” Stroup said.
In retirement, stretching savings works best when financial decisions support both long-term security and day-to-day quality of life.
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