These five states offer a good combination of low living costs and low housing costs.
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According to The Motley Fool’s Best Places to Retire in 2026 report, West Virginia has the lowest housing costs. Unfortunately, it is also one of the most expensive states to live in. This highlights the need to consider multiple variables when considering where to live in retirement. If you want to save money in 2026, start by looking at these five states.
1. Everything in Arkansas is cheap.
The Motley Fool’s Best Places to Retire in 2026 According to the report, Arkansas ranks at the top in terms of cost of living. It ranks fifth in terms of housing costs. This is a well-balanced amount for people who want to retire cheaply.
This state is a great destination for those who appreciate outdoor recreational opportunities. But there are also growing metropolitan areas, such as Little Rock, that offer Southern charm and fascinating cultural opportunities. Besides the mild winter climate, there’s a lot to like about Arkansas. However, access to health care can be limited and summers can be hot.
2. Indiana has extreme seasons.
Indiana ranks 2nd in cost of living and 11th in cost of housing. This is a fair mix that should appeal to cost-conscious retirees. That being said, one of the more interesting things to consider is the weather, which varies from hot summers to frigid winters. If you love the seasons, Indiana offers them in a way you’ll never experience in states like Florida or Texas.
That said, Indiana is a bit rural, so if you like cities you’ll probably want to look elsewhere. And it’s important to note that state taxes are income from many retirement plans. 401(k)s and IRA. That fact alone could get you off the list of retirees who keep large sums of money in tax-advantaged savings accounts.
3. Ohio State ranks in the top 10 in three ways.
Ohio ranks 3rd in cost of living and 10th in cost of housing. He also achieved 6th place in the overall ranking. Large cities like Cincinnati and Cleveland have many cultural amenities and excellent medical opportunities, both of which may not be available outside of the metro area. Public transportation options can also be a bit limited. Cold and snowy winters are also a negative factor to consider.
Be sure to visit in winter so you can stay comfortable even in cold weather. However, you should also visit in the summer, as some areas of the state can be tough for people with allergies or asthma.
4. Kentucky has favorable tax treatment for retirees.
Kentucky ranks 4th in cost of living and 6th in cost of housing. But perhaps one of the biggest perks for retirees is the fact that the state doesn’t impose taxes. social security. Some other forms of retirement income are also exempt from state taxes. This is not as attractive as states with no state income tax, but given Kentucky’s overall lower costs, it could still be a winner.
That being said, this state is a bit rural. Additionally, medical options outside of Louisville may be limited. However, if you love outdoor recreation and small towns supported by strong communities, you’ll want to visit Kentucky before finalizing your retirement.
5. Texas rounds out the top five.
It’s hot in Texas and housing costs are rising. However, as of 2026, it is still quite attractive, ranking 5th in terms of cost of living and 18th in terms of housing costs. It ranks No. 3 overall, making it one of the top states in the Sunbelt to consider for retirees. Dallas in particular ranks high. Among other cities in the south. Notably, there is no state income tax.
If you can justify paying a little more for housing, Texas may be a good retirement destination. However, given the state’s climate, it is best to visit during the summer months. While you’re here, check out fascinating cultural opportunities in cities like Dallas and Austin. If you look into the Lone Star State, you may find that the positives outweigh the negatives.
there is no easy answer
Arkansas, Indiana, Ohio, Kentucky, and Texas each have a lot to offer, but each also has its own drawbacks. Take the time to visit and think about more than housing and living costs. After all, you may find that the least expensive state is not the best state for you when you consider other lifestyle factors such as weather, access to health care, and cultural amenities.
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