Retirees Living in These 12 States Might Struggle With Money (Is Yours on the List?)

Retirement budgets tend to be manageable on paper, until real-world costs enter the picture. But depending on where you live, the situation may be different.

While every retirement plan is unique, certain data reveals that some states create bigger financial challenges for those living on fixed incomes. Retirees in these 12 states may find it harder to stretch their savings.

Ohio

The Buckeye State looks retirement-friendly. The Missouri Economic Research and Information Center (MERIC) ranks Ohio the nation's 20th most affordable state. But many of the state's most common jobs pay low wages, with 9.2% of state residents living below the poverty level.

In just the Cleveland area, many of the top 10 most common occupations, including fast food workers, cashiers, and healthcare aides, pay wages well below the poverty rate.

Housing is more affordable in Ohio, but the state can become expensive once you factor in property taxes, utilities, and medical care.

Michigan

Michigan is a mixed bag. A large share of households earn more than the federal poverty-line wages, but still can't pay for necessities — even when MERC gives Michigan above-average marks for living costs, ranking it 22nd out of 50 for affordability.

Statewide, 8.8% of Michigan residents live below the poverty line, a rate exceeding the national average of 8.7%. With uneven housing markets and rising costs for transportation and health care, retirees may find themselves pinched.

Iowa

While not an obvious destination, Iowa is known for being an affordable state with decent wages and reasonable costs. MERC ranks it as the ninth most affordable state in the country.

Still, many Iowans struggle with everyday expenses, rising property taxes, and inflation on housing and food is outpacing income growth.

According to the latest available Federal Reserve Bank of St. Louis (FRED) data (with figures current through January 2024), average wages in Iowa increased just 3.6% from 2021 to 2024. During that same period, average rent rose by over 21%, and general inflation rose by nearly 20%.

This creates an uncomfortable cauldron in a state with fewer amenities and support programs than you'd find in metro areas of larger states.

Wyoming

Wyoming is popular for its low taxes, minimal regulation, and wide-open spaces. But when it comes to aging, those same draws become major drawbacks.

Health care access is sparse, often with long distances to hospitals and limited specialty care. U.S. News & World Report ranks Wyoming 39th out of 50 for overall quality of health care and 48th out of 50 for health care access.

Similarly, the AARP ranks Wyoming 41st out of 50 states for long-term support care for seniors.

Georgia

Georgia offers sunshine, Southern charm, and a touch of ocean coastline.

While MERC grades Georgia as the nation's 15th-most affordable state, many expenses are significantly higher than retirees expect. Additionally, Georgia has the 11th-highest rate of poverty, with 1 in 10 Georgian households living below the federal poverty line.

Florida

Florida has long marketed itself as a retirement haven, with sandy beaches and no state income tax. But affordability is a growing concern. Statewide, 8.9% of households are below the poverty line.

Rapid home-price growth, soaring insurance premiums, and higher everyday expenses have changed the math for many residents.

Alabama

Alabama's low-cost living can be appealing, with MERC ranking it the nation's third-most affordable state. However, the state's income levels are among the very lowest, and it holds the nation's sixth-highest poverty rates with 11.3% of families living below the poverty line.

Additionally, retirees may struggle to get medical care. U.S. News & World Report ranks Alabama 40th in the nation for health care.

Nevada

Nevada has gorgeous scenery and a lively casino scene, yet retirees here face a double challenge: high housing costs and higher-than-average consumer debt levels statewide. Statewide, 9% of Nevadans live below the poverty line.

For retirees in metro areas, housing costs can make it difficult to maintain financial breathing room — even with above-average retirement income.

New Hampshire

Idyllic New Hampshire boasts no state income tax and no state sales tax, which makes the state appear retirement-friendly. But the reality is it's expensive and logistically complex to grow old in The Granite State.

Housing costs are high relative to income, and access to health care is uneven once you leave population centers.

Many rural areas have limited specialists, long wait times, and fewer in-home care options, which can make aging in place difficult. Tack on harsh winters and car-dependent living, and retirees often face isolation as well.

Oregon

Oregon's got gorgeous views, vineyards, and quirky urban vibes. Yet it also holds one of the nation's largest affordability gaps. MERC ranks Oregon as the nation's 11th-most expensive state, with living costs indexing 11.2% higher than average.

Oregon's housing affordability gap is one of the nation's widest, fueled by decades of building fewer homes than needed to keep up with growing demand.

High home values, rising energy prices, and increasing taxes can make it hard for retirees to stay put.

Pennsylvania

While Pennsylvania has below-average living costs and poverty rates (8.1% compared to the national average of 8.7%), wages have dropped in recent years.

FRED data shows average household income has dropped by 5.7% in recent years, while everyday consumer costs rose by 19.8% in the same period.

Maine

Maine boasts loads of scenic coastlines; however, its high cost of living may dim the state's charms – namely, the state's high housing prices.

Maine's cost-of-living index is 11.4% higher than the national average, with housing (including rent) 39.6% higher. Those in Maine with even moderate home values may find that everyday expenses strain budgets.

Bottom line

Retirement affordability is about how much you've saved and where you live. States with rising costs and fewer public resources can make retirement more financially demanding.

If you live in (or hope to live in) one of these states, it may be worth a closer look at your budget and housing plans. A location rethink now can ease financial stress and help avoid running out of money in retirement.

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