Retirement Social Security

8 Cities Retirees on Social Security Can Actually Afford (And Have No State Income Tax)

These no-tax cities could help Social Security income go further.

By Kristin Hitchcock , Edited by Laura Hohenstein

Updated May 5, 2026

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For many retirees, Social Security makes up a large share of monthly income (sometimes the majority). That can make housing and taxes feel like a huge drain on your budget. Plus, housing directly impacts how comfortable retirement feels, making it one of the more important budget items to keep in mind.

One of the more surprising retirement mistakes is underestimating how much location impacts your finances. Living in a state with no income tax while keeping housing costs manageable could help avoid wasting money in retirement. Below are cities where rent may better align with typical Social Security checks, along with tradeoffs to consider.

Editor's note: All rent data comes from the newest U.S. census data, unless otherwise stated.

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Memphis, Tennessee

Memphis offers one of the more affordable options among larger cities in a no-income-tax state. Median rent is about $1,206 per month, while the average Social Security benefit in Tennessee is roughly $1,955. That gap provides some sizable room for other essentials.

The city also provides access to major hospitals and cultural attractions. However, the higher crime rates and hot, humid summers are factors to consider, too. Utilities and everyday expenses also tend to come in below the national average, which could further help retirees keep monthly costs predictable.

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Tallahassee, Florida

Tallahassee stands out as a more affordable Florida option, especially compared to coastal cities. Median rent is around $1,369, while the average Social Security benefit in Florida is about $1,952.

The slower pace, access to health care, and lower housing costs may appeal to many retirees. Still, insurance costs are high across the state, despite recent reforms. Because it's a college town, Tallahassee also offers more dining and cultural options than many similarly priced cities.

Sioux Falls, South Dakota

Sioux Falls offers one of the widest gaps between housing costs and Social Security income on this list. Median rent is about $1,105, compared to an average Social Security benefit of roughly $1,914 in South Dakota.

That larger difference gives retirees more flexibility in their monthly budget. However, the big trade-off is the climate. Long winters might not suit everyone. The city's steady population growth may also support local services and health care availability over time.

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Knoxville, Tennessee

Knoxville combines moderate housing costs with access to outdoor recreation. Median rent comes in around $1,289, compared to an average Social Security check of about $1,955 in Tennessee.

Retirees may appreciate the proximity of the Great Smoky Mountains and the huge variety of hiking trails around the city. Home prices have been rising, though, and job opportunities may be more limited for those planning to work part-time. The area also has a strong health care network for its size, which may be reassuring for retirees planning for long-term needs.

Cheyenne, Wyoming

Cheyenne combines relatively low housing costs with no state income tax. Median rent is approximately $1,178, while the average Social Security benefit in Wyoming is about $2,023.

The state provides a quieter lifestyle and access to outdoor recreational activities. But there are fewer amenities overall and limited health care options. Travel to nearby areas may be required. Lower population density may appeal to retirees who prefer less congestion and a quieter day-to-day environment.

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Baytown, Texas

Baytown is near Houston but has somewhat lower housing costs. Access to Houston's health care system could be a major advantage for retirees who want nearby specialized care. Median rent is about $1,354, compared to an average Social Security benefit of roughly $1,906 in Texas.

This setup makes it easier to balance monthly expenses, since all of your check won't be going to housing. That said, Texas does have pretty high property taxes, and the Gulf Coast weather is worth considering, too.

Chattanooga, Tennessee

Chattanooga has become a popular choice for retirees looking for a balance between affordability and lifestyle. Median rent is approximately $1,396, still below the state's average Social Security income of about $1,955.

The city offers a walkable downtown, riverfront views, and tons of outdoor activities. However, as more people move in, housing costs have been rising, though prices have recently shown signs of leveling off. Chattanooga's relatively low utility costs compared to larger metros could also help offset rising housing prices.

Laredo, Texas

Laredo stands out as one of the most affordable cities on this list. Median rent is around $1,062, while the average Social Security benefit in Texas is about $1,906.

That gap provides plenty of income for other budget needs, like health care and groceries. However, extremely hot summers and more limited health care access may be drawbacks for many retirees. Lower everyday costs, including groceries and services, may help stretch a fixed income further beyond just housing savings.

Bottom line

For retirees living on Social Security, location can play a major role in how far that income goes. Housing costs and state taxes are two of the biggest variables, and they can vary widely depending on where you choose to live.

Taking advantage of overlooked senior benefits, like relocating to a state with no income tax and more manageable housing costs, could help reduce financial strain over time. For many retirees, even a few hundred dollars in monthly savings might make everyday expenses feel more manageable.

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