If you're thinking about relocating to somewhere cheaper in retirement, you're not alone -- many Americans lack sufficient retirement savings to afford the cost of living in their home states after their working years are over. The pandemic also affected some people's savings and retirement plans. Moving to a more cost-effective area can help stretch your funds further in retirement, alleviating some uncertainty about your financial future.
To help you choose the perfect place to retire, GOBankingRates used data from the Bureau of Labor Statistics to find the top 10 states where you can live out your golden years for less than $45,000 annually The study analyzed factors like groceries, housing, utilities, transportation, healthcare and the overall cost-of-living index in each state, all of which contribute heavily to your yearly expenses in retirement. These indices were then multiplied by the average annual expenditures of Americans aged 65 and older, which provided the final ranking of the top 10 states.
The figures quoted in this article are per household. The most recent Census lists the average number of people per household as 2.5.
To prepare for retirement, take a look at places to live that will cost you less than $45,000 annually.
Annual expenditures: $43,107
Early retirement might be possible in Indiana, a state where retirees can retire without paying exorbitant costs. Housing, in particular, is a steal at $7,763 annually. Utilities only run $3,745 per year, as well, and the cost of living index is 90.6.
9. West Virginia
Annual expenditures: $43,059
Early retirement is also a good possibility in West Virginia, where overall costs are pretty low. The annual housing cost is $7,793, and annual grocery bill only $4,057.
Annual expenditures: $42,774
In addition to low housing costs, retirees in Iowa will be happy to find that other costs such as utilities are reasonable, at just $3,609 per year, and healthcare costs are only $6,661.
Annual expenditures: $42,726
Early retirement is definitely possible in Mississippi, the state where retirees spend only $7,962 annually in housing. Retirees will also find a reasonable food bill, at only $3,994.
Annual expenditures: $42,345
This southern state treats retirees well across many categories. With healthcare at just over $6,000 per year, utilities at just under $3,500 and transportation costs at $3,326, it's easy living.
Annual expenditures: $42,250
Georgia makes it easy for retirees to call this lovely state home, with an annual housing cost of just $7,377. Other expenses won't break the bank either: Utilities come to $3,424 annually and transportation to $3,326.
Annual expenditures: $41,822
Oklahoma should be on many retirees' radar as a place to enjoy your golden years without worrying about money. The annual housing cost is just $7,470, with utilities at $3,598 each year and healthcare at $6,301.
Annual expenditures: $41,822
The South really has cornered the market on affordable places to retire. Alabama is another winner in low housing costs, the third most affordable on the list, with just $6,950 in annual housing cost.
Annual expenditures: $41,156
You won't find many hills in Kansas, but retirees will find affordable housing, at just $7,198 annually, and lower overall expenses. Utilities come to just $3,791 per year, and groceries to just $3,855 annually.
Annual expenditures: $39,633
The number one most affordable place to retire on the list is Mississippi. Even if you can't spell it, you can retire here, paying only a comfortable $6,574 annually in housing costs. Groceries will only run $3,876 per year. Utilities another $3,420 and health costs are just $6,315.
States Where Your Retirement Will Cost Less Than $45,000 a Year
The best places to retire on less than $45,000 per year are concentrated in the South and the Midwest. Mississippi, Kansas and Alabama captured the No. 1, No. 2 and No. 3 spots, respectively. Oklahoma, Georgia, Tennessee and Missouri filled out the middle ranking states where your retirement will cost the least each year.
Rounding out the bottom of the rankings are Iowa, West Virginia and Indiana.
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Daria Uhlig contributed to the reporting for this article.
Methodology: To find every state where retirement costs less than $45,000 per year, GOBankingRates first referenced data from the Bureau of Labor Statistics' 2020 Consumer Expenditure Survey to find (1) the national average total annual expenditures for consumers 65 years and older. Then, GOBankingRates used cost of living index data for 2021 from the Missouri Economic Research and Information Center to find (2) the cost of living index score of every state. Multiplying factor (1) by factor (2) for every state, GOBankingRates was able to estimate (3) the total annual expenditures for a consumer 65 years or older living in each state. Supplemental data was included on each state's cost of living index score and estimated annual spending in the following five necessities categories: grocery, housing, utilities, transportation, and health. All data was collected on and up to date as of February 24, 2022.
This article originally appeared on GOBankingRates.com: States Where Your Retirement Will Cost Less Than $45,000 a Year