Jul 19, 2026
If you’re dreaming of retirement you may be thinking about warm weather, beaches and a slower pace of life. But the reality of retirement often comes down to one thing: how far can your money actually stretch?
For many Americans, that question is becoming harder to answer. The average retired household spends more than $61,000 a year, according to the U.S. Bureau of Labor Statistics, with housing, healthcare and transportation coming in as their biggest expenses.
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That’s why the state you choose to retire in can make a major difference, and a new study from home care agency Polaris Home Care has ranked all 50 states, with some surprising winners.
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The best states to retire in 2026 may not be where you expect
Forget the usual retirement hotspots. The places where retirees may be able to stretch their savings the furthest aren’t always the states with the warmest winters or the biggest retirement communities.
The research from Polaris Home Care analyzed all 50 states to determine which offer the most retirement-friendly environments, using factors including healthcare costs, housing expenses, property taxes, utilities, food costs, crime rates and average earnings.
The results show that even popular retirement destinations can fall short when everyday costs are factored in.
Idaho claimed the top spot with a perfect Retirement Index Score of 100, thanks to its combination of affordability, safety and relatively low healthcare costs. The state reported annual medical expenses of $8,148 per person, above-average earnings of $63,894 and a crime rate about 41% lower than the national average.
Arizona ranked second with a score of 90.67, helped by its warm climate, lower property taxes and above-average earnings of $63,692. The state’s property tax rate of just 0.41% was among the lowest in the country, while average monthly utility costs came in at about $524.
North Dakota rounded out the top three with a score of 90.48. The state benefited from strong average earnings of $65,127 and lower food and beverage costs, which come in around $3,810 per person annually — more than $500 below the national average.
The remaining states that make up the study’s top 10 are Virginia, Alabama, Wyoming, Florida, Mississippi, Minnesota and Michigan.
One of America’s most famous retirement destinations, Florida, didn’t even crack the top five, coming in seventh with a score of 83.77. The warm weather and lack of state income tax keep it attractive for retirees but the study suggests taxes alone don’t determine retirement affordability.
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So who rounded out the bottom of the list?
Alaska was named the least retirement-friendly state, scoring just 41.44. Although Alaska residents earn some of the highest average wages in the country at about $70,196 annually, those earnings are offset by high living costs.
The state recorded some of the highest expenses for utilities, healthcare and food, including average monthly utility costs of $658 and annual medical spending of more than $13,600 per person. Alaska also had the highest violent crime rate among states analyzed.
Missouri, Texas, Nebraska and Louisiana also landed in the bottom five.
Texas, which has no state income tax, ranked third-worst in the study. The reason? Higher property taxes, above-average crime rates and high utility costs dragged down its overall score.
The rankings show that the best place to retire may not be the most famous destination, but it may be the place where income, expenses and quality of life are most balanced.
6 things to consider before relocating for retirement
For many retirees, choosing where to live after you retire is based on whether their income can keep pace with everyday expenses.
The average retired worker receives about $2,000 per month in Social Security benefits, or roughly $24,000 annually, according to the Social Security Administration. Many retirees rely on additional income from pensions, investments and personal savings to maintain their lifestyle.
Healthcare is one of the biggest expenses to consider. Fidelity estimates that a 65-year-old retiring in 2025 may need approximately $172,000 to cover healthcare costs throughout retirement, excluding long-term care expenses.
Housing is another major expense to keep in mind. A state with lower taxes may still be expensive if home prices, insurance costs, property taxes or utilities are costly.
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Before making a move, here are six things to consider:
1. Total cost of living
A state with no income tax may still have higher housing, insurance or healthcare costs that can drain your retirement savings faster.
2. Healthcare access and affordability
Affordable medical care is only useful if quality providers and hospitals are accessible when you need them.
3. Housing costs and insurance
Property taxes, homeowners insurance and climate-related costs such as flood or hurricane coverage can make a difference to your retirement budget.
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4. Safety and community amenities
Crime rates, access to recreation, transportation and having a sense of community and social activities can all play a role in your quality of life during retirement.
5. Being close to family and support networks
A lower-cost state may not be the best choice if relocating means you lose access to your network of family, friends or caregiving support.
6. Long-term affordability
Remember to consider whether a location will remain affordable as expenses rise over time.
Retirement planning isn’t necessarily about just finding the cheapest place to live. It’s about careful planning so that you can find a place where your money, health needs and lifestyle goals can work together.
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Freelance writer with an economic development and consulting background.
