Most Affordable Cities for an Early Retirement – 2019 Edition

How much do you need to retire comfortably? How much more do you need if you want toretire comfortably and early? For people retiring in their mid-60s, AARP suggests that yoursavings should amount to 10 to 12 times your current income. However, retiring early meansthat your savings may need to be even higher.

One important way to maximize your savings is to live in a city that is more affordable.In this study, we consider which cities are the best for an early retirement across 10 metricsthat measure a variety of economic and livability factors. For details on our data sources andhow we put all the information together to create our final rankings, check out the Data andMethodology section below.

Key Findings

  • Tax-friendly states -Seven of the cities in our top 10 are located in states with favorable tax environments forearly retirees. In particular, Florida and Nevada have no state income tax and offer additionaldeductions on some or all other forms of retirement income. In addition, they have relativelypalatable sales and property tax rates. Kentucky, Pennsylvania and Texas also offer relativelytax-friendly environments.
  • Temperate climates - Though climate was not included as a factor in ourstudy, many of the cities in our top 10 are in places with temperate climates. This is an addedbonus for retirees who are looking for relatively mild winters and bearable summers.


  1. Henderson, NV

    Henderson, Nevada is a very affordable optionfor Americans looking to retire early. For the two cost of living metrics we considered, Hendersonranks well. The first metric uses data from the MIT Living Wage Calculator to estimate the annualcost of living, encompassing food, medical, housing and transportation expenses. According to MITestimates, the annual cost of living in Henderson is just $20,672, a top-30 rate of all 80 citiesin our study. The second primary cost-of-living metric in our study compares median housing costto median household income. Henderson ranks 13th for this metric overall, with median housingcosts consisting of less than 22% of median household incomes.

    Nevada is also very tax-friendly toward retirees. Social Security income, along with public andprivate pension income, is not taxed. Though sales tax is 8.25% in Henderson, property taxes arelow. Using data from the Census Bureau’s 1-year American Community Survey, we found that theeffective property tax in Henderson was 0.60% in 2017. In comparison, the average effectiveproperty tax across all cities is 1.18%, almost double Henderson’s rate.

  2. Chandler, AZ

    Chandler, Arizona is a prominentsoutheastern suburb of Phoenix and scores well across our livability factors.Property and violent crime rates are low - both top-15 rates in the study overall- and unemployment in 2017 was just above 4%. Chandler also scores well on factorsparticularly relevant to seniors, notably health-related metrics. Of the cities in our top 10,Chandler has the most medical facilities given population density. According to data from theCensus Bureau’s Business Patterns Survey, there were more than 46 medical facilities per 1,000residents in 2016. On average for all 80 cities in our study, there were only nine medicalfacilities per 1,000 residents.
  3. Plano, TX

    Like Henderson, Nevada, Plano, Texas is highlyaffordable and, as a result, conducive to an early retirement. It ranks in the top half of all 80cities in our study for cost of living, according to MIT data, and ranks first for median housingcost as a percentage of median household income. Specifically, the annual cost of living in Planois $21,375, and median housing cost as a percentage of median household income is approximately18%. Texas is also tax-friendly toward retirees, as the state does not have an income tax. Ourestimated effective income tax for a retiree with $50,000 in annual income is only 9.42%. Whileretirees will not have to pay any tax on income, property taxes in Plano are relatively high forretirees looking to buy a home. According to Census Bureau data, the effective property tax in2017 was 1.62%, which ranks 59th out of 80 overall.
  4. Las Vegas, NV

    The most populous city in our top 10, LasVegas, Nevada ranks in the top half of all cities across all metrics. Perhaps an unexpected placeto retire, Las Vegas offers the tax benefits of living in Nevada along with competitive healthcarecosts. It ranks in the top half of cities for income, property and sales taxes and ranks in thetop 20 for health insurance costs. We measured health insurance costs by using the Kaiser FamilyFoundation health insurance calculator and comparing the average annual cost of a silver healthinsurance plan for a 60-year-old in each city, not including any subsidies. In Las Vegas, theaverage cost of a silver health plan for a 60-year-old is $9,396 annually.
  5. Pittsburgh, PA

    Pittsburgh, Pennsylvania does well in ourstudy in terms of the health-related metrics. The average annual cost of a silver health insuranceplan is less than $8,500 (the eighth-lowest cost for this metric overall), and in 2016, there werealmost 16 medical facilities for every 1,000 residents, (the 11th-highest rate overall).Pittsburgh also offers a high quality of healthcare, as it is home to some of the best hospitalsin the country according to the U.S. News & World Report Best Hospitals 2018-2019 ranking.
  6. Mesa, AZ

    Mesa, Arizona ranks in the top 25 for medianhousing costs as a percentage of median household income and in the top 10 for medical facilitiesper 1,000 residents. Specifically, in 2017, median housing costs made up about 22% of medianhousehold income. In terms of access to care, the Census Bureau’s County Business PatternsSurvey reports that there were almost 24 medical facilities per 1,000 residents in Mesa in2016.
  7. Lexington, KY

    Lexington, Kentucky ranks third out of all80 cities in our study for median housing costs as a percentage of median household income, at alittle less than 20%. According to MIT estimates, the annual cost of living in Lexington is$19,526. That’s the second-lowest cost of living in our top 10, and the seventh-lowest overall.While its property tax rate, 0.97%, ranks 41st out of all 80 cities, its sales tax rate, arelatively low 6%, ties as the 6th overall. The violent crime rate and the unemployment ratein this city also rank in the top half of our study and are top-15 and top-30 rates,respectively.
  8. Louisville, KY

    Less than 100 miles west of Lexingtonis Louisville, Kentucky, which sits on the Ohio River and is the state’s largest city.Louisville ranks in the top 10 for the metrics of cost of living, median housing costs as apercentage of median household income and sales tax. Its annual cost of living is $19,646 andhousing costs comprise 20% of income while sales tax is 6%. Louisville ranks 19th out of all80 cities in our study for health insurance. The average cost of a silver health plan for a60-year-old here is $786 per month, or $9,432 annually. Additionally, the effective income taxrate for a retiree, property tax rate, violent crime rate and unemployment rate in Louisvilleall rank within the top 50% of our study.
  9. Fort Wayne, IN

    Of any city in our top 10, Fort Wayne,Indiana is the most affordable. According to MIT data, the annual cost of living is just alittle more than $19,000. In comparison, the average annual cost of living across all citiesis $22,864. This means that an average resident in Fort Wayne saves almost $4,000 annually onfood, medical, housing and transportation expenses compared to an average resident in any ofthe other cities we studied. While Fort Wayne is affordable, the effective income tax ratethere for a retiree with $50,000 in annual income is higher than in all other cities in ourtop 10. This means that retirees may need a higher pre-tax retirement income to cover theirannual cost of living.
  10. St. Petersburg, FL

    In St. Petersburg, Florida, housingcosts make up roughly 22% of income and the sales tax rate is 7% - both top-20 rates. LikeNevada, the state of Florida is very tax-friendly toward retirees. Florida has no state incometax, meaning that retirees do not pay tax on Social Security income, pension income or incomefrom an IRA or 401(k). As a result, residents of St. Petersburg, Florida may be able to extendincome received in retirement - such as money from an IRAs or 401(k) - over longer periods oftime. This is particularly important for people looking to retire early.

    Unfortunately, St. Petersburg has higher crime rates than other cities in our top 10. Accordingto data from the FBI UCR Report, there were more than 4,300 property crimes and almost 700violent crimes per 100,000 residents in 2017.


To rank the most affordable cities for an early retirement we looked at data forthe 80 largest cities in the U.S. Specifically, we compared cities over the following10 metrics:

  • Effective income tax rate for a retiree - This is the estimatedincome tax rate for a retiree with $50,000 in annual income. That income is splitbetween $15,000 from Social Security, $10,000 from a private pension, $15,000 froma retirement savings like a 401(k) or an IRA and $10,000 in wages.
  • Average annual cost of a silver health insurance plan - Tofind this number, we used the Kaiser Family Foundation’s 2018 health insurancecalculator. We estimated the cost of a silver plan for a 60-year-old in each city withan income of $50,000, not including any subsidies.
  • Cost of living - This is the cost of living for one person. Datacomes from the MIT Living Wage Calculator.
  • Median housing costs as a percentage of median household income -This is the median housing cost divided by median household income. Data comes from theCensus Bureau’s 2017 1-year American Community Survey.
  • Average effective property tax rate - This is annual property taxesdivided by median home value. Data comes from the Census Bureau’s 2017 1-year AmericanCommunity Survey.
  • Sales tax - This is the local sales tax rate.
  • Property and violent crime rates - This is the number of propertycrimes and violent crimes per 100,000 residents. Data comes from the FBI UCR report andis for 2017.
  • Medical facilities per 1,000 residents -Data comes from the CensusBureau’s County Business Patterns Survey and the Census Bureau’s American Community Survey.Data for both metrics is from 2016.
  • Unemployment rate - Data comes from the Census Bureau’s 2017 1-yearAmerican Community Survey.

First, we ranked each city in every metric, giving half a weight to property and violentcrime rates and a full weight to the other factors. Then we found each city’s average rankingand used the average to determine a final score. The city with the highest average rankingreceived a score of 100. The city with the lowest average ranking received a score of 0.

Tips for Saving for Retirement

  • Invest early - An early retirement requires early planning. By planningand saving early, you can take advantage of compound interest. Use an investment calculatorto see how your investment can grow over time.
  • Trusted personal finance advice - A financial advisor can help you makesmarter financial decisions such as moving or being in better control of your money after youland a new job. Finding the right financial advisor thatfits your needs doesn’thave to be hard.SmartAsset’s free toolmatches you with financial advisors in your area in 5 minutes. If you’re ready to be matchedwith local advisors that will help you achieve your financial goals,get started now.

Questions about our study? Contact us at press@smartasset.com

Find Top Financial Advisors by City

Learn more about financial advisors in your area below through our detailed advisor profiles organized by location. That's just one of the ways that we make it easier to find and research financial advisors. You can also find nearby financial advisors through our matching tool, which does the work for you by pairing you with advisors based on your situation and preferences.

Find Top Financial Advisor Firms by City

Learn more about financial advisor firms in your area below through our detailed advisor profiles organized by location. That's just one of the ways that we make it easier to find and research financial advisor firms. You can also find nearby financial advisors through our matching tool, which does the work for you by pairing you with advisors based on your situation and preferences.