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Retirement on a Budget: Where Your Savings Can Stretch the Farthest
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Published in Business and Finance on Thursday, November 13th 2025 at 16:22 GMT by Investopedia- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Retirement on a Budget: Where Your Savings Can Stretch the Farthest
When a life‑long career finally ends, the next chapter is all about making those hard‑earned dollars work for you. An Investopedia feature titled “The Best States to Retire in If You Want Your Money to Last” dives into how a simple choice of location can dramatically alter the longevity of a retirement nest egg. The article, which draws on public data, consumer surveys, and tax analyses, gives readers a clear, data‑driven ranking of states that offer the best combination of low cost of living, favorable tax treatment, and high‑quality services for seniors.
Why the State Matters
Retirement income isn’t just about the number on your check—how far that money travels is equally critical. The article starts by underscoring that cost of living (COL), tax burden, healthcare access, and climate are the four pillars that shape a retiree’s financial outlook. While many people focus on Social Security benefits, the piece points out that state tax policies can either amplify or erode those benefits. For instance, states that exempt Social Security from state income tax or levy minimal property taxes can leave retirees with a larger share of their pension.
The article also links to Investopedia’s own primer on “State Taxes on Social Security,” offering readers a quick refresher on how different states treat retirement income for tax purposes. That side note helps readers see why a state with a high overall COL may still be attractive if its tax advantages are strong enough to offset that cost.
The Five Standout States
According to Investopedia’s analysis, the top five states for retirees who want to keep their money in the bank are:
| Rank | State | Key Advantages | Potential Drawbacks |
|---|---|---|---|
| 1 | Wyoming | No state income tax; low overall cost of living; beautiful natural scenery; strong public health system. | Higher property taxes than some neighboring states; limited public transportation options. |
| 2 | South Dakota | No state income tax; minimal sales tax; low cost of healthcare; strong senior services. | Limited job opportunities for retirees wanting to volunteer or stay active in local economies. |
| 3 | Alaska | No state income tax; high availability of outdoor activities; unique cultural experiences; relatively low property taxes. | High travel costs to and from the state; extreme weather for some; higher overall cost of living in certain metro areas. |
| 4 | Arkansas | Low cost of living; low property taxes; no state tax on Social Security; affordable healthcare. | Rural areas may lack certain cultural amenities; weather can be hot and humid in summer. |
| 5 | New Mexico | Low cost of living; no state tax on Social Security; scenic landscapes; moderate climate. | Limited high‑speed internet in rural areas; some regions experience higher crime rates. |
The article highlights that each of these states scores particularly well in a composite “Retirement Scorecard” created by the author. The scorecard weighs cost of living, taxes, healthcare quality, and climate, with each factor normalized on a 0‑100 scale. Wyoming leads the pack thanks to its exceptionally low property taxes and robust healthcare system, while South Dakota’s absence of a sales tax gives retirees a small, but meaningful, advantage when buying groceries and household items.
How the Rankings Were Calculated
Investopedia’s article describes the methodology in detail. The author began by pulling data from the U.S. Census Bureau’s American Community Survey and the Bureau of Labor Statistics for cost‑of‑living indices. Tax data came from the Tax Foundation’s yearly “State Tax Profiles” report, while healthcare rankings relied on the Centers for Medicare & Medicaid Services’ Hospital Compare tool. Climate data was sourced from NOAA, focusing on average annual temperatures and precipitation.
The weighting system applied to each factor was not arbitrary; the author explained that the weightings were derived from a survey of 1,200 retirees conducted by a nonprofit retirement planning group. The survey revealed that cost of living (35%), tax burden (25%), healthcare quality (20%), and climate (20%) were the most significant determinants of perceived financial security.
Real‑World Implications
Beyond the numbers, the article includes anecdotal evidence from retirees who have relocated to these states. One highlighted case involves a former teacher who moved from a high‑tax city in New York to Arkansas. By moving, she saved $2,300 annually on taxes and cut her monthly living expenses by 18%, allowing her to extend her Social Security withdrawals by almost a decade.
Another interview spotlights a retired engineer who moved to South Dakota for its low sales tax. He explains that the “small price” of groceries and home supplies added up to significant savings over five years, which he used to pay for long‑term care insurance.
The article stresses that the “right state” depends on individual preferences—for instance, a retiree who loves skiing may prioritize Colorado even if it doesn’t rank as high on the cost‑of‑living scale. Still, the article’s primary takeaway is that for those who want to stretch every dollar, moving to a state with a low tax profile and affordable living costs can be a game‑changer.
Additional Resources
The Investopedia piece includes several hyperlinks to related content:
- “Best States for Social Security” – a deeper dive into how each state taxes retirement income.
- “How to Estimate Your Retirement Budget” – a calculator that lets readers input their income sources, expenses, and desired longevity.
- “Top 10 Places for Medicare Coverage” – an analysis of Medicare Advantage plans available in each state.
These resources help readers apply the article’s findings to their own financial situations. The author also recommends consulting with a certified financial planner who specializes in retirement planning to tailor the state choice to a particular set of needs—especially for retirees with complex healthcare or investment portfolios.
Bottom Line
Retiring in the right state can mean the difference between “my money runs out” and “I can enjoy my golden years without a financial crunch.” Investopedia’s article is a solid starting point for anyone weighing relocation as part of a retirement strategy. With its clear, data‑driven rankings, transparent methodology, and practical anecdotes, it equips readers with the knowledge to make a financially sound decision.
If your goal is to let your savings work as hard as you’ve worked all your life, consider looking beyond the usual retirement hotspots. States like Wyoming, South Dakota, Alaska, Arkansas, and New Mexico may just offer the perfect blend of low taxes, low cost of living, and quality senior services to keep your money on a long, comfortable ride.
Read the Full Investopedia Article at:
[ https://www.investopedia.com/the-best-states-to-retire-in-if-you-want-your-money-to-last-11832209 ]
