Retirement Living: These 3 States Are Too Expensive — Try These 3 Instead

America is such a large and diverse country that sometimes “averages” for certain things really don’t paint a good portrait of local conditions. For example, according to Zillow, the average value of a home in the U.S. is $342,941 as of Feb. 26, 2024, but if you live in Hawaii, the average price of a home is well over twice the national average, at $828,058.

Although generally not quite as pronounced, variances like these can be found for retirees in nearly every consumer spending category, from utilities and healthcare to groceries and transportation. For seniors looking for a little more room in their budget, simply moving from one state to another could result in significant savings.

Whether it’s to an adjacent state or simply from one with a similar climate to another, there are plenty of examples where picking up and moving could result in significant savings. Here are some key examples.

States that are expensive often have a lot going for them. They may include beautiful coastlines, majestic mountains or high-energy cities. But not every state is for everyone.

If you live in one of the following three states but feel like you can never keep up with your expenses, it might be time to consider a similar or nearby state so that you can boost your quality of life.

California has something of a “love-it-or-hate-it” reputation across America. Many of those who live there see it as the best state in the country, with beaches, mountains, redwood forests, a fertile Central Valley and the glitz and glamor of Hollywood and San Francisco, among many other highlights.

Others, however, see it as an overpriced, high-tax state with a major homeless problem and an atmosphere that is unfriendly to businesses. If you fall into the latter camp, there’s certainly no reason to live in California, given that it’s the third-most expensive state in the country, with a cost of living nearly 38% higher than average and housing prices 94% above national norms.

Hawaii is clearly an outlier in the U.S., given that it’s a tropical island 2,400 miles from the mainland. It boasts world-famous destinations like Waikiki Beach and Hawaii Volcanoes National Park that draw roughly 10 million visitors per year.

Just like in California, many of its residents consider it to be a paradise. However, it certainly costs a pretty penny to take up residence. Costs in Hawaii run an incredible 84% above the national average, making it the most expensive state of all. You can expect to spend more than $10,000 per month just on living expenses in the Aloha State.

The nation’s capital might seem like a great place to live, and it certainly is if you’re the least bit interested in American politics, history or its cultural treasures. But what surprises a lot of people is that Washington, D.C. is actually a quite expensive place to live.

While not technically a state, on an annual basis, living in D.C. would cost you roughly 50% more than the national average, at close to $110,000 per year. As the District itself is relatively small, you could easily live in the same area of the country and perhaps even commute in without paying nearly as much. 

These three states may not be the flashiest in America, but they have a much lower cost of living that other states in the country — yet still have much to offer. The mere fact that you could boost your monthly cash flow by spending less money in these states might be enough in and of itself to consider moving there.

If you live in California, hopping over to next-door Nevada might be all it takes to push your budget from the red into the black.

Although costs in Nevada are still 3.2% above the national average, at $61,507 per year, total annual expenditures are nowhere close to the $92,093 you’d spend in California. Throw in the fact that Nevada has no state tax and you may literally find tens of thousands of extra dollars in your budget every year.

The Sunshine State has a lot in common with Hawaii, even though the two states are roughly 5,000 miles apart. Both states sport tropical climates, for example, and beaches and waterways play an important part in the lifestyles they offer.

But if you’re looking to keep more money in your pocket, Florida should be the runaway choice for you. While Florida’s cost of living is 2.8% above the national average, with total annual expenditures of $68,802, it’s nothing compared with Hawaii, which is by far the most expensive state in the union.

While Delaware isn’t right next door to Washington, D.C., by moving just 90 miles away you can save a pretty good chunk of change when it comes to your annual budget.

Total annual expenditures in Delaware average about $70,000, roughly $40,000 below the cost of living in the nation’s capital. In addition to its natural beauty, Delaware has some additional advantages over D.C., including a lower crime rate, no sales tax and significantly more affordable housing.