10 Places Retirees Are Picking Over California (#4 Is a Clever Option)

California is hard to beat for scenery and climate, but retiring there can put serious pressure on a fixed income. Its cost-of-living index reached 140.3 in the second quarter of 2026, compared with 100 nationally, according to MERIC. The state's median home listing price was $730,000 in August 2026, based on Realtor.com data published by the Federal Reserve.

For someone living on just Social Security, those costs may be especially difficult to absorb. These 10 states offer retirees compelling alternatives, though each comes with its own tax and lifestyle tradeoffs.

Editor's note: Cost of living index reports come from MERIC, and average home price is provided by Realtor.com.

Nevada

Nevada keeps Californians within driving distance of family while offering desert sunshine, entertainment, and plenty of retirement communities. The state has no individual income tax, so Social Security, pensions, and retirement account withdrawals are exempt from state tax. Its 105.4 cost-of-living index is dramatically below California's 140.3. The median listing price was $489,000, about $241,000 less than California's.

Arizona

Arizona offers warm winters, established 55-plus communities, and outdoor recreation without California's coastal price tag. Social Security is exempt from state tax, but most pension and retirement-account income is subject to Arizona's 2.5% flat income tax. Its cost-of-living index was 108.6, while its $459,990 median listing price came in nearly $270,000 below California's.

Oregon

Oregon appeals to retirees who enjoy the West Coast but would gladly trade Southern California heat for forests, mountains, and a milder climate. The state does not tax Social Security, although it generally taxes pensions and other retirement income. Oregon's 110.4 cost-of-living index remains high nationally but well below California's. Its median listing price was $565,000.

Washington

Washington offers striking scenery, cooler summers, and access to major medical centers, particularly around Seattle. As of 2026, the state has no individual income tax, so traditional retirement income is not taxed. Retirement accounts are also excluded from its capital gains tax. Washington's cost-of-living index was 115.1, and its $649,000 median listing price was about $81,000 below California's.

Texas

Texas gives retirees a wide choice of big cities, college towns, coastal communities, and smaller rural areas. It has no state individual income tax, leaving Social Security, pensions, and retirement withdrawals untaxed by the state. Its 90.8 cost-of-living index was almost 50 points below California's. The $359,990 median listing price was less than half California's, although property taxes can be relatively high.

Tennessee

Tennessee combines mountain scenery, four seasons, and respected health care centers in cities such as Nashville and Knoxville. The state's Hall income tax was fully repealed in 2021, so it no longer taxes personal retirement income. Tennessee's cost-of-living index was just 89.7. Its median listing price of $434,700 was roughly $295,000 below the California figure.

Georgia

Georgia provides mild winters, a small coastline, mountain towns, and access to Atlanta's medical amenities. Social Security is exempt from state tax. Residents age 62 and older may also exclude up to $65,000 of retirement income per person. Georgia's cost-of-living index was 90.1, and its $394,000 median listing price was well below California's.

South Carolina

South Carolina attracts retirees thanks to its historic towns, beaches, golf communities, and relatively mild weather. It does not tax Social Security. Residents age 65 and older can deduct up to $10,000 of qualifying retirement income, with an additional age-based deduction potentially available. Its 92.7 cost-of-living index was far below California's

New Mexico

New Mexico delivers dry weather, dramatic landscapes, and a slower pace than many parts of California. Most residents below the state's income thresholds owe no state tax on Social Security, but pensions and retirement withdrawals are generally taxed as regular income. Its cost-of-living index was 90.2. At $404,970, the median listing price was almost $325,000 below California's.

North Carolina

North Carolina gives retirees both mountain and beach options, along with relatively moderate winters and strong medical networks around its larger cities. The state does not tax Social Security, although most other retirement income is subject to its 3.99% flat tax. Its cost-of-living index was 96.7, and the August 2026 median listing price was $409,220, nearly $321,000 below California's.

Bottom line

Leaving California can help you save money in retirement, especially if you choose a state with cheaper housing and a lower overall cost of living. Still, the best option depends more than on which state looks cheapest on paper. The cost of moving, access to health care facilities, and social relationships should all be considered too, even if they are harder to quantify than tax cuts and grocery bills.

Before moving, consider all the costs associated with living in the new state, like homeowners insurance, property taxes, and medical costs. These costs can vary widely from community to community and can eat up any savings you get by moving.

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