States Where Your Retirement Will Cost Less Than $45,000 a Year

If you're thinking about relocating to somewhere cheaper in retirement, you're not alone — many Americans lack sufficient retirement savings to afford the cost of living in their home states after their working years are over. The pandemic also affected some people's savings and retirement plans. Moving to a more cost-effective area can help stretch your funds further in retirement, alleviating some uncertainty about your financial future.

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To help you choose the perfect place to retire, GOBankingRates used data from the Bureau of Labor Statistics to find the top 10 states where you can live out your golden years for less than $45,000 annually The study analyzed factors like groceries, housing, utilities, transportation, healthcare and the overall cost-of-living index in each state, all of which contribute heavily to your yearly expenses in retirement. These indices were then multiplied by the average annual expenditures of Americans aged 65 and older, which provided the final ranking of the top 10 states.

The figures quoted in this article are per household. The most recent Census lists the average number of people per household as 2.5.

To prepare for retirement, take a look at places to live that will cost you less than $45,000 annually.

William Reagan / Getty Images/iStockphoto
William Reagan / Getty Images/iStockphoto

10. Indiana
Annual expenditures: $43,107
Early retirement might be possible in Indiana, a state where retirees can retire without paying exorbitant costs. Housing, in particular, is a steal at $7,763 annually. Utilities only run $3,745 per year, as well, and the cost of living index is 90.6.

DavidByronKeener / Getty Images/iStockphoto
DavidByronKeener / Getty Images/iStockphoto

9. West Virginia
Annual expenditures: $43,059
Early retirement is also a good possibility in West Virginia, where overall costs are pretty low. The annual housing cost is $7,793, and annual grocery bill only $4,057.

Amdizdarevic / Shutterstock.com
Amdizdarevic / Shutterstock.com

8. Iowa
Annual expenditures: $42,774
In addition to low housing costs, retirees in Iowa will be happy to find that other costs such as utilities are reasonable, at just $3,609 per year, and healthcare costs are only $6,661.

Shutterstock.com
Shutterstock.com

7. Missouri
Annual expenditures: $42,726
Early retirement is definitely possible in Mississippi, the state where retirees spend only $7,962 annually in housing. Retirees will also find a reasonable food bill, at only $3,994.

Kruck20 / Getty Images/iStockphoto
Kruck20 / Getty Images/iStockphoto

6. Tennessee
Annual expenditures: $42,345
This southern state treats retirees well across many categories. With healthcare at just over $6,000 per year, utilities at just under $3,500 and transportation costs at $3,326, it's easy living.