Retiring in the U.S. ends up costing more than any financial calculator tells you. That’s not exactly breaking news, but the 2026 numbers make it impossible to ignore. The median price for an existing home hit $435,300 in June 2025—an all-time high.
Medicare Part B monthly premium jumped to $202.90, almost 10% more than last year, the biggest increase in four years. Meanwhile, the average Social Security benefit sits around $2,071 a month, while a retired household’s typical yearly expenses top $62,000. The math doesn’t work on its own.
That’s the reality for anyone past a certain age trying to figure out where to spend their retirement right now. Picking a state to settle in can mean a difference of tens of thousands of dollars a year—not just from taxes, but from insurance, healthcare, rent, and overall quality of life.
This Is America’s Top Retirement State
According to a CareScout analysis published in January 2026, Wyoming ranks first nationwide for retirement, followed by New Hampshire, Vermont, Montana, and South Dakota.
The case for Wyoming is very interesting, actually: no state income tax, the lowest share of Medicare beneficiaries with multiple chronic conditions in the country (just 44%), and its residents’ average Social Security benefit comes out to $28,082 a year.
But No State the Perfect Retirement Haven
Florida—the classic American retirement destination—scores a 98 out of 100 for climate in quality-of-life rankings and has top-tier hospitals like Mayo Clinic Jacksonville and Cleveland Clinic Florida.
But homeowners’ insurance premiums there exceeded $5,600 a year in 2025, the highest in the nation, thanks to hurricane risks and other climate-related headaches. Texas doesn’t take a cut of your income or your Social Security benefits, but property taxes run between 1.3% and 1.8%, and those brutal summers—plus floods and tornadoes—drive up energy and insurance costs.
California Prices Out Retirees: Ohio and Minnesota Step In
On the other end of the spectrum, California has world-class hospitals, national parks, and cultural attractions you won’t find anywhere else. But its income tax rate goes up to 13.3%, the highest in the country, and its housing score in national indexes is barely a 10 out of 100.
For most middle-income retirees, California is simply out of reach. Ohio, on the other hand, gets the top overall affordability score in The Motley Fool’s ranking—96 points—and the best housing score at 90, plus access to the Cleveland Clinic.
Considering Minnesota for Retirement
Minnesota has the strongest healthcare system of the bunch, with 92 points, anchored by the Mayo Clinic and a network of top-tier cultural institutions.
Healthcare spending is, by far, the most underestimated factor. According to Fidelity Investments’ annual report, the average health expense for a 65-year-old retiree over the course of retirement comes to $172,500—and that doesn’t include long-term care. For a couple, that number doubles to $345,000.
A healthy 65-year-old woman could face as much as $313,000 in medical costs during retirement, according to the 2025 Milliman Retiree Health Cost Index. That’s not a single lump sum, but it adds up over the years: premiums, deductibles, copays, and prescriptions.
Medicare Part A’s hospital deductible is $1,736 per benefit period in 2026, and the Part D out-of-pocket cap for prescription drugs is $2,100. After that, Medicare picks up the rest.
Thinking About Assisted Living? Here Are the Numbers
For people who can’t—or don’t want to—live completely independently anymore, the median cost of assisted living in the U.S. is $6,313 a month in 2026, according to SeniorLiving.org. Independent living, a more autonomous option, averages $3,065 a month. Either way, Medicare doesn’t cover these costs—it only pays for skilled nursing facility care under very specific conditions.
In 2025, a third of retirees cut back on food and medical care just to get by on their fixed incomes. And 19.5% of older adults were still working in 2024. Retirement decisions aren’t just about money anymore—they’re strategic, geographical, and medical all at once.
Just a Disclaimer: Always Consult an Expert
This article is for informational purposes only and was put together using publicly available data as of its publication date. Figures may vary depending on individual circumstances. Anyone considering retirement decisions should consult a certified financial advisor, a Medicare specialist, and—if needed—an estate planning attorney before making any moves.
