How you retire is all about the choices you’ve made with your savings, investment strategies and funding your future nest egg. Of course, where you live — or more accurately, where you can afford to live — depends on more than the weather and lifestyle. Some other criteria can also affect your financial well-being, such as taxes and cost-of-living factors.
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First, when it comes to Social Security and taxes, not all states are created equal, and how far your benefits and fixed income will go depends on where you live. In 2025, the list of states that do not tax Social Security benefits increased. There are also several popular retirement destination states that don’t have income tax.
Another factor to consider is cost of living. Not all the states that are tax-friendly are equally friendly when it comes to this. The good news is, GOBankingRates has compiled a list where you don’t have to choose between the two.
Here are a dozen states that offer the best of both worlds for retirees who are looking to relocate — ranked by low-to-no taxes and cost of living.
1. Nevada
- Total population: 3,141,000
- Percentage of population that is retirement age (65 or older): 16.6%
- Median household income: $75,561
- Average home value: $472,804
- Total monthly cost of living: $2,756
- Property tax rate: 0.49%
- Income tax rate: 0%
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2. Tennessee
- Total population: 6,986,082
- Percentage of population that is retirement age (65 or older): 16.8%
- Median household income: $67,097
- Average home value: $336,770
- Total monthly cost of living: $2,102
- Property tax rate: 0.49%
- Income tax rate: 0%
3. Wyoming
- Total population: 579,761
- Percentage of population that is retirement age (65 or older): 18%
- Median household income: $74,815
- Average home value: $362,841
- Total monthly cost of living: $2,262
- Property tax rate: 0.55%
- Income tax rate: 0%
4. Florida
- Total population: 21,928,881
- Percentage of population that is retirement age (65 or older): 21.1%
- Median household income: $71,711
- Average home value: $407,037
- Total monthly cost of living: $2,518
- Property tax rate: 0.74%
- Income tax rate: 0%
5. Washington
- Total population: 7,740,984
- Percentage of population that is retirement age (65 or older): 16.3%
- Median household income: $94,952
- Average home value: $626,277
- Total monthly cost of living: $3,226
- Property tax rate: 0.75%
- Income tax rate: 0%
6. Alaska
- Total population: 733,971
- Percentage of population that is retirement age (65 or older): 13.3%
- Median household income: $89,336
- Average home value: $390,416
- Total monthly cost of living: $2,798
- Property tax rate: 0.91%
- Income tax rate: 0%
7. South Dakota
- Total population: 899,194
- Percentage of population that is retirement age (65 or older): 17.6%
- Median household income: $72,421
- Average home value: $318,047
- Total monthly cost of living: $2,211
- Property tax rate: 0.99%
- Income tax rate: 0%
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8. South Carolina
- Total population: 5,212,774
- Percentage of population that is retirement age (65 or older): 18.5%
- Median household income: $66,818
- Average home value: $306,515
- Total monthly cost of living: $2,083
- Property tax rate: 0.47%
- Income tax rate: 0% to 6.2%
9. Texas
- Total population: 29,640,343
- Percentage of population that is retirement age (65 or older): 13.2%
- Median household income: $76,292
- Average home value: $308,148
- Total monthly cost of living: $2,027
- Property tax rate: 1.36%
- Income tax rate: 0%
10. Oklahoma
- Total population: 3,995,260
- Percentage of population that is retirement age (65 or older): 16.1%
- Median household income: $63,603
- Average home value: $218,259
- Total monthly cost of living: $1,720
- Property tax rate: 0.77%
- Income tax rate: 0.25% to 4.75%
11. Arizona
- Total population: 7,268,175
- Percentage of population that is retirement age (65 or older): 18.6%
- Median household income: $76,872
- Average home value: $440,801
- Total monthly cost of living: $2,794
- Property tax rate: 0.44%
- Income tax rate: 2.5%
12. New Hampshire
- Total population: 1,387,834
- Percentage of population that is retirement age (65 or older): 19.5%
- Median household income: $95,628
- Average home value: $525,367
- Total monthly cost of living: $2,861
- Property tax rate: 1.41%
- Income tax rate: 0%
Methodology: For this study, GOBankingRates analyzed U.S. states to find the states with low taxes and low cost of living that retirees should target. For each state, a number of factors were found, including total population, population ages 65 and over, total households and household median income, all sourced from the U.S. Census American Community Survey. The average single-family home value was sourced from Zillow Home Value Index for July 17th, 2025. Using the average single-family home value, assuming a 10% down payment and using the most recent national average 30-year fixed mortgage rate, as sourced from the Federal Reserve Economic Data, the average mortgage can be calculated. The cost-of-living indexes were sourced from Sperlings BestPlaces and include grocery, healthcare and utilities. Using the cost-of-living indexes and the national average expenditure costs for retired households, as sourced from the Bureau of Labor Statistics Consumer Expenditure Survey for retired consumer units, the average expenditure cost for each location can be calculated. Using the average mortgage and average expenditure costs, the average total monthly and annual cost of living can be calculated. States that tax Social Security Income was sourced from Fidelity’s Social Security Tax by State. The state income tax range and property taxes by state were sourced from the Tax Foundation. The low end of the state income tax rate, the high end of the state income tax rate, and the property tax rate were all scored and weighted at 1.00. The states that tax Social Security income were scored 0 and the states that do not tax Social Security income were scored at 0.250. The scores were summed and sorted to show the states with low taxes and low cost of living that retirees should consider. All data was collected on and is up to date as of July 17th, 2025.
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This article originally appeared on GOBankingRates.com: Great for Retirees: 12 States With Low Taxes and Low Cost of Living
