8 Budget-Friendly Places to Retire Without Much Saved

Recent retirement data points to a troubling picture: many Americans are behind on savings, and about half of people over 50 worry they will not have enough money to get by in retirement.

In much of the United States, Social Security alone is unlikely to cover retirement costs, especially for seniors dealing with high-interest debt or frequent medical bills. Still, some parts of the country remain relatively affordable. For people hoping to retire soon and unsure whether they can make it work, low-cost areas may offer a practical path. Here is a closer look at common retirement expenses and some of the best towns to consider.

One in five Americans 50 and older has no retirement savings

According to AARP research, 20% of Americans age 50 and older have no retirement savings. With living costs climbing, inflation pushing up gas and grocery prices, and health care becoming more expensive, many people cannot afford to retire in the places where they currently live.

What to weigh when choosing a retirement home base

Cost of living should be one of the first things you evaluate. Housing is often the biggest factor, since home prices and property taxes can differ sharply from one area to another. After that, consider routine expenses such as groceries, utilities, and transportation. It is also important to review state tax rules, because some states tax Social Security benefits while others do not, and many offer property tax relief for older residents.

Fidelity estimates that people age 65 and older retiring in the near future will spend more than $185,000 on health care and medical costs during retirement. That means many retirees may need more money than they expect.

Other issues that can shape your ideal retirement spot

Climate is another major consideration. Some retirees may want room for a garden or land, while others may prefer to avoid yard work and settle into a condo or townhome.

If being near family matters, it helps to look for places within driving distance of loved ones. And if you have a medical condition that requires specialist care or rehab services, make sure the areas you are considering can provide them.

The Social Security income many retirees count on

Even though many older adults do not have savings, a lot of them rely on Social Security to help cover basic needs. The average Social Security benefit in 2026 is $2,095, and with a 3.6% COLA in 2027, the standard benefit rises to $2,170.

That amount will not cover most monthly expenses, which can include housing, food, maintenance, utilities, health care, and other everyday costs. Even so, there are parts of the country where Social Security may come close to paying the bills.

Affordable retirement cities in the Midwest

The Midwest tends to offer relatively low housing costs. U.S. News, for example, ranks Decatur, Illinois, and Bay City, Michigan, as the No. 2 and No. 3 cheapest places to retire.

Many Midwestern communities have longer winters, but retirees who enjoy all four seasons and do not mind colder weather may benefit from the lower cost of living these towns provide.

Affordable retirement cities in the South

For those who prefer warmer weather, the South also has plenty of low-cost options. U.S. News ranks Eagle Pass, Texas, as the No. 1 cheapest place to retire. Fort Smith and Springdale, Arkansas, also appear on the list.

Florida offers several relatively affordable choices as well, including Gainesville, Jacksonville, and Palm Coast, all of which have a cost of living below the national average according to Empower data.

How to compare affordable retirement destinations

If you want to research other places, you can check Zillow home values, Bureau of Labor Statistics consumer spending data for retirees, and Tax Foundation property tax figures. Those resources can help you narrow down the best retirement city for your needs.

As a general rule, retirees on limited incomes should avoid expensive metro areas such as New York City and San Francisco, where housing and utility costs are high. It also makes sense to eliminate places with steep property taxes that do not offer meaningful tax breaks for seniors.

The bottom line

You can still have a low-stress retirement even if you have little or nothing in a traditional retirement account. Social Security may not provide much income, but there are still places in the United States where those checks can go a long way toward covering basic expenses.

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