25 Affordable and Quiet Midwest Towns for Retirement

Key Takeaways

• Retiring in the Midwest can help keep housing and everyday expenses lower, giving you more room in your budget for comfort and flexibility.

• Taxes and access to health care differ significantly from one state or town to another, so location is a major part of retirement planning.

• Many Midwest towns offer a slower pace, steady prices, and a quieter way of life for retirees looking to reduce daily stress.

If you are nearing retirement, you may already be thinking about how you will spend your post-work years. One of the biggest factors shaping that experience is where you choose to live.

Investopedia ranked the top 100 places in the United States for the next stage of life, weighing factors that matter to retirees such as climate, local activities, access to nature, health care quality, community, and cost of living. The Midwest entries on that list are highlighted here, and the region stands out for offering a lower cost of living than many other parts of the country.

The Midwest, which includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and South Dakota, generally has lower everyday costs than many coastal or fast-growing areas. Even so, the list is concentrated in only a few states.

Several Midwestern states have price levels below the national average, which typically means lower costs for housing, services, and other necessities. For retirees relying on Social Security, fixed pensions, or retirement account withdrawals, that can translate into greater financial flexibility and less money-related stress.

25 Midwest Towns to Consider for Retirement

Here are 25 Midwest towns that may be worth considering for retirement.

1. Chicago, Illinois

2. Elgin, Illinois

3. Algona, Iowa

4. Ankeny, Iowa

5. Cedar Rapids, Iowa

6. Corning, Iowa

7. Council Bluffs, Iowa

8. Des Moines, Iowa

9. Dubuque, Iowa

10. Iowa City, Iowa

11. Knoxville, Iowa

12. Mason City, Iowa

13. Pella, Iowa

14. Sioux City, Iowa

15. West Des Moines, Iowa

16. Niles, Michigan

17. Gregory, South Dakota

18. Pierre, South Dakota

19. Rapid City, South Dakota

20. Sioux Falls, South Dakota

21. Appleton, Wisconsin

22. Eau Claire, Wisconsin

23. La Crosse, Wisconsin

24. Waukesha, Wisconsin

25. Wausau, Wisconsin

Financial Upsides and Trade-Offs of Retiring in the Midwest

A major advantage of living in the Midwest is housing affordability. Data from the Federal Reserve Bank of St. Louis shows that the median home sale price in the Midwest is lower than the figure for the United States overall. In addition, annual living costs are below those in most coastal regions.

Lower housing costs and cheaper day-to-day purchases can help retirement savings and other benefits last longer, creating a more secure and hopefully more enjoyable retirement. The extra money may go toward paying down debt, funding hobbies and travel, supporting children or grandchildren, or simply offering added financial peace of mind.

Taxes are another important consideration, and they vary considerably from state to state. South Dakota, for instance, has no state income tax, so Social Security benefits, pension income, and withdrawals from retirement accounts such as 401(k)s are not subject to state taxation.

Other Midwest states do levy income tax, though the rates differ. Kansas has a 5.58% income tax rate, while Indiana has a 2.95% rate that has been declining each year and is set to continue falling through 2027.

Access to health care also depends on the town or city. Larger places such as Chicago, Iowa City, and Des Moines have major hospitals and medical networks, while smaller communities may require longer trips for medical treatment, especially for specialized care.

Important

Many Midwest towns and cities have older housing stock. That can mean lower purchase prices, but it may also bring higher ongoing maintenance and heating costs that retirees should factor into their budgets.

Why a Few States Appear So Often

Iowa, Wisconsin, and South Dakota make up much of the list because they generally have lower housing and daily living costs than more densely populated or industrial states such as Illinois and Ohio. Chicago and Cleveland may offer broader services and better health care access, but they usually come with higher expenses and local taxes, which can be difficult for retirees on fixed incomes.

By contrast, many communities in Iowa, Wisconsin, and South Dakota combine smaller populations, slower home-price growth, and fewer dramatic boom-and-bust cycles. That tends to keep prices lower and household budgets easier to manage.

The Bottom Line

For retirees choosing a place to settle into life after work, the Midwest offers affordable housing, lower everyday expenses, and a range of options from small towns to larger cities. While each community suits a different lifestyle, the region often provides more financial breathing room and a calmer day-to-day pace.