What are the best places to retire in the U.S.?

"Best" place to retire depends on climate, family, and healthcare access — things only you can weigh. What's objectively measurable is cost of living, and the U.S. Bureau of Economic Analysis publishes exactly that every year as **regional price parities (RPPs)**: an index where 100 equals the national average price level, built from actual goods, services, and housing-rent data by state. The most recent release covers 2024 and was published [February 19, 2026](https://www.bea.gov/news/2026/real-personal-consumption-expenditures-state-and-real-personal-income-state-2024).

The 4 most affordable states to retire to, by federal cost data

1. **Arkansas — RPP 86.9.** A dollar goes about 13% further than the national average. Social Security benefits are fully exempt from Arkansas income tax, and each taxpayer can exclude up to $6,000 of employer pension or qualified-plan (including traditional IRA) distributions — per the [Arkansas Department of Finance and Administration, Subject 206](https://www.dfa.arkansas.gov/wp-content/uploads/206-PensionsAnnuities.pdf), revised February 24, 2023.
2. **Mississippi — RPP 87.0.** Per the [Mississippi Department of Revenue](https://www.dor.ms.gov/individual/individual-income-tax-frequently-asked-questions), retirement income — qualified pensions, 401(k) and IRA distributions, and Social Security — is exempt from state income tax once the retirement plan's own requirements are met; only early distributions taken before that are taxable.
3. **Iowa — RPP 87.8 (tied).** Under House File 2317, retirement income — 401(k), IRA, pension, and annuity distributions — has been excluded from Iowa income tax for taxpayers 55 or older (and surviving spouses) for every tax year beginning on or after January 1, 2023, per [Iowa Department of Revenue guidance](https://revenue.iowa.gov/taxes/tax-guidance/individual-income-tax/retirement-income-tax-guidance).
4. **Oklahoma — RPP 87.8 (tied).** Social Security benefits included in federal adjusted gross income are fully subtracted back out on the Oklahoma return, and each individual may separately exclude up to $10,000 of other qualifying retirement income — per the [Oklahoma Tax Commission](https://oklahoma.gov/tax/helpcenter/income-tax.html).

The most expensive states

At the other end of the same 2024 BEA release: California carried the highest state RPP at 110.7, followed by Hawaii at 110.0 and New Jersey at 108.8 — all more than 8% above the national average. The District of Columbia (not a state) was higher still, at 109.9. California also had the highest regional price parity for housing rents specifically, at 154.3.

Cost of living isn't the only factor

• **State tax treatment varies by income type**, not just by state. A state can tax wages but exempt Social Security, or exempt pensions but not IRA withdrawals — check the specific rule for each income source with the state's own department of revenue before assuming a state is or isn't "tax-friendly."
• **Healthcare access and cost** — provider density, out-of-pocket cost, and whether your Medicare Advantage plan's network follows you — vary by county, not just by state, and are worth checking against your specific ZIP code, not a statewide average.
• **Housing cost inside a "cheap" state still varies widely.** A state's overall RPP is a population-weighted average — a low-cost state can still have a high-cost metro area inside it.

What ClearValue covers — and where to go for the rest

ClearValue Lending publishes this cost-of-living and state-tax research; it doesn't manage money or sell relocation services. Where you retire is one decision — how your retirement savings are invested, withdrawn, and taxed along the way is a separate one. For side-by-side comparisons of brokerages, robo-advisors, and retirement account types, see [ClearValue Invest's retirement hub](https://clearvalueinvest.com/retirement/). To check your own numbers, ClearValue's own [Retire-at-X calculator](/tools/retire-at-x-calculator) and [retirement readiness check](/readiness/retirement) are free to use.