Living comfortably in retirement boils down to one thing: making sure you’ve saved enough money and aren’t pulling too much from it each year. As the cost of living in America keeps climbing, more and more retirees are facing the real risk of draining their savings too quickly. And honestly, that’s a legitimate concern. A recent report shows that hardship withdrawals went up in 2025, with 6% of people needing at least one. That’s a 1% jump from 2024. The best way to dodge these withdrawals that eat into your retirement fund? Build up your accounts as much as you can — easier said than done, right?
As of Spring 2026, new research suggests that Americans think they’ll need about $1.5 million to retire comfortably. But here’s the reality check: the typical retirement balance for Americans between 60 and 70 is roughly $568,116. While the average retirement savings for this age group tops $1.2 million, the median tells a different story — more than half of retirement-age Americans have less than $1 million saved up.
Good news though — there are still plenty of places in America where you can retire on less than $1 million. Some research, for example, used data from the Bureau of Labor Statistics and the Missouri Economic Research and Information Center to identify states with a cost of living index below 100. Those are the places where you can live comfortably on smaller savings. Based on the findings we’ve looked at, these states are solid choices for a comfortable retirement.
Ohio
According to Q3 2025 data, Ohio ranked No. 20 out of 50 states when it comes to affordability. Back then, Ohio’s score was 92.8 out of 100. By early 2026, the state scored 93.7 out of 100, which shows it got slightly pricier over the year. Even after dropping to the 21st least expensive spot and edging up nearly 1% on the index, Ohio still makes sense for retirees looking for a bargain.
Housing is a big reason Ohio stays affordable compared to the rest of the country. According to 2026 data, it’s 13.7% cheaper than the national average. The average Ohio home is worth about $248,719. If you’re eyeing the market, the median sale price in May 2026 was around $274,027 — that’s way below the national median of $403,200 as of Q1 2026. If you’d rather rent, Ohio apartments go for around $1,100 a month as of early July 2026. Looking for a steal? Check out Lorain and Youngstown, where you might snag a place for about $700 monthly. Keep those housing costs down and you’ll stretch your retirement dollars further, making sure your savings last longer.
According to estimates, if you’re moving to Ohio, aim for at least $864,291 in retirement savings. That said, since the state’s cost of living score went up, you might want to put aside a bit more to be on the safe side.
Louisiana
Louisiana is one of the cheapest places to live in the country and stays that way. In Q1 2025, it ranked 17th for affordability. Fast forward to 2026, and it actually improved, climbing to No. 15 with a cost of living index of 91.1 out of 100.
Louisiana residents spend way less than average on housing and utilities — those categories scored 83.3 and 82.3 out of 100, respectively. Earlier estimates pegged Louisiana housing costs between $833 and $1,543 monthly. That lines up pretty well with what other sources show: rent in some areas dips below $900 in Monroe, though fancier neighborhoods like Marrero might run you over $1,300.
When it comes to total cost of living, average annual expenses work out to about $56,947. The recommendation? Set aside at least $862,756 if you’re planning to move here. Bottom line: retirees heading to Louisiana can live comfortably even with savings significantly under $1 million.
New Mexico
New Mexico was ranked 17th most affordable in Q3 2025, but it jumped all the way up to No. 11 when its cost of living index dropped from 92.5 to 89.9 in early 2026. This might mean your retirement money will go further here, even as prices climb elsewhere.
If you’re thinking about retiring to New Mexico, you’ll find your biggest savings in housing and utilities, which scored 83.2 and 80 out of 100 respectively in 2026. The median house price as of April 2026 is $342,167. For renters, expect to pay under $1,200 a month on average as of July 2026. In some cities, you can snag a place for $900 or less monthly — pretty sweet if you want warm weather without breaking the bank.
New Mexico’s annual cost of living runs roughly $56,825. To live comfortably, you’d want around $859,684 in savings. But here’s the thing: other sources put the cost of living lower at $46,076 as of September 2025, which means your nest egg could stretch even further. Aim closer to that original estimate if you can, though, and you’ll enjoy your time in New Mexico even more.
Tennessee
Tennessee is a fantastic choice for retirees looking to stretch their savings. For the past few years, it’s consistently ranked in the top 10 most affordable states. Tennessee really shines for retirees because it has a cost of living index of 90.3 and — here’s the kicker — no state income tax. That means you won’t owe state taxes on 401(k) or IRA distributions, pensions, or Social Security benefits.
That tax break might mean you can get away with saving a little less compared to other states on this list. But fair warning: Tennessee makes up for it with other taxes. The state leans heavily on sales tax, which is locked at 7% and brings in 60% of state revenue. Homeowners do pay property taxes, though they tend to be among the lowest in the country.
It’s a bit of a trade-off situation — you dodge income tax but need to watch out for sales and property taxes. All told, if you move to Tennessee, aim for at least $825,896 in savings to be comfortable.
Iowa
If you’ve got less than $1 million saved and you’re prioritizing low housing costs, Iowa might be your answer. Based on 2026 data, Iowa’s biggest bargains are utilities at 88.6 out of 100 and housing at 75.6. Here’s something cool: while utility costs have been climbing nationwide thanks to the AI boom, Iowa actually bucked the trend. From May 2024 to May 2025, the state’s utility costs dropped. On the housing front, the average Iowa home is valued at $238,019, with a median sale price of $223,633 as of April 2026.
Using various government data, Iowa’s average annual cost of living comes out to about $47,833 per person as of September 2025, or roughly $3,986 monthly. Another source puts it slightly higher at $55,473 yearly, or $33,036 after Social Security. Overall, you’d want to have around $825,896 saved to retire comfortably in Iowa.
Here’s the good news: Iowa’s cost of living index dropped from 90.3 in Q3 2025 to 88.6 in early 2026 — that’s a roughly 1.9% decrease. This bump saw Iowa climb from ninth to seventh cheapest state. If you’ve got a little less than what’s suggested, you might still be just fine retiring in Iowa.
Arkansas
If you’ve got between $800,000 and $1 million, Arkansas could be a great fit. One source puts the annual cost of living at $44,254 on average, while another takes a more cautious approach and says around $54,859 yearly. The good news? Based on those estimates, you can retire here with $810,358. If the first estimate is closer to reality, your money might stretch even further than you’d expect.
Transportation is one way your savings could last longer. A big perk of moving to Arkansas is that traffic isn’t a nightmare most of the time, especially outside the cities. Shorter commutes mean lower gas bills.
Housing is another major win. Arkansas has some of the cheapest rent around, averaging about $970 monthly as of July 2026. In some towns, you can rent for well under $700. If you’d rather buy, Arkansas homes are valued at $226,473 on average as of Spring 2026, with mortgage payments typically ranging from $1,100 to $1,700. Even accounting for down payments and interest rates, you’re looking at way less than the national median mortgage of $2,623 that was reported in June 2026.
Kansas
Related Posts
How Retirees Can Easily Calculate Their Required Minimum Distributions
Feb. 25, 2026 6:30 am EST Fg Trade Latin/Getty Images At 73, retirees dealing with…
Why JPMorgan Stopped Its Robo-Help Services
Feb. 28, 2026 12:30 pm EST View Press/Getty Images It looks like JPMorgan Chase is…
What You Spend on Fun Costs More Than Most Young People
Feb. 27, 2026 6:30 pm EST Looks like the younger folks aren’t making as much…