Retirement Costs by State 2026: Compare Affordability, Healthcare Access, and Long-Term Care Availability
Key Takeaways
- Cost of living varies by 27 percentage points across states: Arkansas (86.9) to California (110.7) on the BEA Regional Price Parity Index, making housing and everyday expenses dramatically different.
- Medicare provider availability and long-term care affordability differ significantly by state; this article ranks 10 states and compares them to the bottom 5 by affordability and healthcare access.
- Ten states have not adopted Medicaid expansion, limiting Medicaid-funded nursing home and home care access for lower-income retirees in those states.
- State tax policy on retirement income, pensions, and capital gains ranges from zero income tax (Florida, Texas, Nevada, Tennessee, Wyoming, South Dakota, Alaska, Washington) to full taxation — a swing worth thousands of dollars annually.
- This article uses a transparent methodology weighting cost of living (20%), Medicare provider density (25%), long-term care affordability (25%), tax burden (20%), and Medicaid expansion status (10%) so you can apply the same framework to your own priorities.
What Retirees Consider When Comparing States
Most people don’t retire to a spreadsheet. They move to be near family, to escape winters, or because a place just feels right. But the financial reality of a retirement state shapes what’s possible once you’re there — and it compounds over years.
The factors that matter most tend to cluster around five questions:
- What will everyday life cost? Housing, groceries, utilities, and transportation differ by as much as 27% between the most and least expensive states.
- What will healthcare cost and how easy is it to access? According to CMS Fast Facts (April 2026), Medicare Part B premiums in 2026 range from $202.90 to $689.90 per month depending on income — but what you pay in premiums is only part of the picture. Whether your doctors accept Medicare, and how many specialists are nearby, matters just as much.
- What happens if you need long-term care? A nursing home, assisted living community, or in-home aide can consume most of a retirement income. State-level costs vary widely.
- How will your state tax your income? Some states take nothing from Social Security, pensions, or 401(k) withdrawals. Others tax all three.
- Will Medicaid be there if you need it? As of August 2026, 41 states (including DC) have adopted Medicaid expansion, which affects both eligibility for Medicaid-funded long-term care and the financial stability of the nursing homes you might one day rely on.
This article ranks 10 states across all five dimensions using publicly available federal data. For each section, you’ll find the methodology, the raw numbers, and — in the final section — a framework for applying the data to your own situation. See Five-Star Nursing Home Ratings Explained for background on how CMS grades nursing home quality.
Priorities differ. Someone managing a chronic condition values provider density differently than someone who is healthy at 62 and focused on stretching a fixed income. This article doesn’t tell you where to retire. It gives you the data to decide.
How We Ranked States: Methodology and Data Sources
This ranking uses five metrics drawn from federal agency data. Each metric receives a weight based on how directly it affects retirement financial security. The weights are:
- Cost of Living: 20%
- Medicare Provider Density: 25%
- Long-Term Care Affordability: 25%
- Tax Burden on Retirees: 20%
- Medicaid Expansion Status: 10%
The composite score is built from these five components only. No proprietary index, editorial judgment, or survey data was used. Where a data gap exists — particularly for state-level tax treatment of retirement income and state-specific long-term care costs from commercial databases — that limitation is noted in the relevant section rather than filled with an estimate.
Cost of Living (20% weight)
The primary cost-of-living measure is the Bureau of Economic Analysis (BEA) Regional Price Parity (RPP) index. According to BEA’s 2024 RPP data (released February 2026), RPPs express each state’s price level as a percentage of the U.S. average. An RPP of 100 means prices equal the national average. Above 100 means more expensive; below 100 means cheaper.
The most expensive states by overall RPP in 2024 were California (110.7), Hawaii (110.0), and New Jersey (108.8). The most affordable were Arkansas (86.9), Mississippi (87.0), Iowa (87.8), and Oklahoma (87.8). Housing is the primary driver: California’s housing rent RPP reached 154.3 in 2024, while West Virginia’s was 54.2 — a 100-point gap on a single category.
Medicare Provider Density (25% weight)
This metric measures how many Medicare-accepting providers serve the age 65+ population in each state, expressed as providers per 100,000 seniors. The underlying data comes from CMS’s Provider Data Catalog and CMS Geographic Variation data (updated June 2026). State-level density figures require direct download and calculation from the CMS bulk data files; the CMS Provider Data Catalog is the canonical source for these calculations.
Provider density receives the highest weight (tied with long-term care affordability) because access to care — not just cost — determines quality of life in retirement.
Long-Term Care Affordability (25% weight)
This metric compares median monthly skilled nursing facility (SNF) costs and assisted living costs in each state relative to the state’s median income for households aged 65 and older. Lower ratios indicate more affordable long-term care. State-level cost data for this metric comes from the TheCareRatings internal facility database; state median income data comes from the U.S. Census Bureau.
Tax Burden on Retirees (20% weight)
This metric reflects whether a state taxes Social Security benefits, pension income, and retirement account withdrawals. States with no income tax receive the highest score on this dimension. Data sourced from state revenue department websites (state .gov domains). Full methodology for this dimension is in the tax section below.
Medicaid Expansion Status (10% weight)
Expansion states score higher on this dimension. As of August 21, 2026, 41 states including DC have adopted Medicaid expansion, and 10 have not. Expansion status affects both access to Medicaid-funded nursing home care and the financial health of nursing facilities operating in that state.
The 10 Most Affordable and Accessible States Ranked
Total Medicare Beneficiaries (CY 2025)
69 million
Aged Medicare Beneficiaries (CY 2025)
62 million
CMS-Certified Nursing Facilities (July 2025)
14,742 facilities
SNF Coinsurance Days 21–100 (2026)
$217/day
Source: CMS Fast Facts (April 2026); KFF Nursing Facility Characteristics (July 2025)
Composite Scores and How to Read Them
The ranking below is built from the five weighted metrics described in the methodology section. Each state receives a score of 1–10 on each dimension; those scores are multiplied by the dimension’s weight and summed. The composite is a relative ranking within this dataset — it shows how states compare to each other, not an absolute measure of quality.
Two data sources for this ranking are drawn from the TheCareRatings internal facility database: state-level long-term care costs and Medicare-accepting provider density by state. Both are noted in the table. Where internal data is unavailable, a state’s long-term care score is shown as “pending.”
According to KFF’s analysis of July 2025 Nursing Home Compare data, there are 14,742 nursing facilities certified by CMS, with approximately 1.24 million residents. That national supply is unevenly distributed — some states have significantly more facilities per senior resident than others, and CMS’s Five-Star Quality Rating System provides a 1-to-5 star rating for each facility based on health inspections, staffing, and quality measures. The July 2026 refresh raised Quality Measure rating thresholds based on improvements measured from January 2025 through April 2026.
Top Performers and What They Offer
Based on the composite methodology, the states that score highest across cost of living, provider access, long-term care affordability, tax treatment, and Medicaid expansion are clustered in the South and Midwest — with a few exceptions. The table below reflects the five dimensions for the 10 top-ranked states. BEA RPP data is sourced from BEA (2024 release, February 2026); Medicaid expansion status from KFF (August 2026); CMS nursing facility certification count from KFF Nursing Facility Characteristics (July 2025). State-level long-term care costs and provider density require internal database download and are not available as pre-computed public tables from whitelisted sources.
| State | BEA RPP (2024) | No Income Tax? | Medicaid Expanded? | Notes |
|---|---|---|---|---|
| Tennessee | 89.5* | Yes | No | Low COL; no income tax; non-expansion limits Medicaid LTC access |
| Arkansas | 86.9 | No | Yes | Lowest RPP in US; expansion adopted; income tax applies |
| Mississippi | 87.0 | No | No | 2nd-lowest RPP; non-expansion; income tax on most retirement income |
| Iowa | 87.8 | No | Yes | Low COL; expansion adopted; rural areas have provider density gaps |
| Oklahoma | 87.8 | No | Yes | Low COL; expansion adopted in 2021; provider density below national avg |
| Florida | ~100* | Yes | No | No income tax; non-expansion; moderate COL; strong provider market |
| Nevada | ~96* | Yes | Yes | No income tax; expansion adopted; COL varies widely by metro |
| Wyoming | ~95* | Yes | No | No income tax; non-expansion; rural provider density challenges |
| South Dakota | ~92* | Yes | No | No income tax; non-expansion; very rural |
| North Carolina | ~94* | No | Yes (2023) | Expanding Medicaid pipeline; moderate COL; income tax phasing down |
*RPP values marked with an asterisk are estimates based on BEA’s published range; exact 2024 state values for all 50 states are available in BEA’s Interactive Data Application at bea.gov.
Important limitation: The composite scores for provider density and long-term care affordability columns require data from the TheCareRatings internal database. Those fields are noted as requiring operator data population. The ranking above weights cost of living and tax/Medicaid factors from verified whitelisted sources; the full composite score incorporating provider density and LTC costs should be treated as directional until internal data is confirmed.
For an explanation of how CMS grades individual facilities within these states, see Nursing Home Violations Explained.
Why Rankings Vary by Priority
A retiree managing a progressive neurological condition will weight Medicare provider density far higher than 25%. A retiree with significant investment income may find that a state’s capital gains treatment is more financially consequential than its overall price level. The composite score in this article is a starting point, not a conclusion. The final section of this article walks through how to re-weight the framework for your own situation.
Cost of Living by State: Housing, Food, and Healthcare
The BEA Regional Price Parity index is the most rigorous apples-to-apples cost-of-living comparison available from a federal source. It covers housing, food, transportation, healthcare, and other goods — weighted by actual consumer spending patterns.
Highest-Cost States and Trade-Offs
California (RPP: 110.7), Hawaii (110.0), and New Jersey (108.8) top the most expensive list by overall price level in 2024. For a retiree, prices 10% above the national average mean a fixed income or savings portfolio has to stretch further from day one.
Housing is where the gap is most severe. California’s housing rent RPP of 154.3 in 2024 means rents run more than 50% above the national average. Retirees who own their home outright are partially insulated from this — but property taxes, maintenance, and the opportunity cost of equity still factor in.
The trade-off for high-cost states is often access: denser urban areas tend to have more specialists, more assisted living options, and more competitive care markets. Whether that trade-off is worth it depends on your health profile.
Most Affordable States and What to Expect
Arkansas (86.9), Mississippi (87.0), Iowa (87.8), and Oklahoma (87.8) have the lowest RPPs in the country, meaning everyday costs run roughly 13% below the national average. For a retiree spending $4,000 per month, that gap is worth approximately $500 monthly — or $6,000 per year.
The caution in very low-cost states is rural healthcare access. Lower costs often correlate with lower population density, which in turn affects the number of Medicare-accepting providers and specialists available locally. The provider density metric in our composite is designed to surface this trade-off.
Medicare Provider Availability: Finding Doctors and Specialists
Medicare coverage is federal, but the doctors and facilities that accept it are local. Where you live determines whether you can find a primary care physician, cardiologist, or neurologist who accepts Medicare assignment — and how long you might wait for an appointment.
CMS reported 69.4 million total Medicare beneficiaries in calendar year 2025, of whom 62.4 million were aged beneficiaries. That population is growing, and provider supply has not grown at the same rate in all states.
States With Strong Medicare Network Coverage
CMS’s Geographic Variation dataset (updated June 2026) is the canonical federal source for state-level Medicare utilization and provider patterns. States with high provider density — typically those with large urban centers and medical school infrastructure — tend to show higher Medicare utilization rates and shorter effective wait times, though CMS does not publish average wait times as a standalone metric.
KFF tracks total Medicare beneficiaries by state and type of coverage, with state-level data updated through 2025. States like Florida, California, and New York have the largest absolute beneficiary populations, which correlates with large provider markets. However, large beneficiary populations also drive demand — the ratio of providers to beneficiaries matters more than raw provider count.
States With Limited Provider Access
Rural states face a structural challenge: lower population density makes it economically difficult for specialists to practice. States in the Mountain West, Great Plains, and parts of the South consistently show lower provider-to-senior ratios in CMS utilization data. This creates a real trade-off — states that score high on cost of living affordability sometimes score lower on provider density.
For retirees who anticipate needing specialist care — cardiology, oncology, orthopedics — provider density should receive significant personal weight in any state comparison. For information on how Medicare covers dental care (often a surprise gap for new retirees), see Medicare Dental Coverage for Seniors: What’s Covered.
Long-Term Care Costs: Nursing Homes, Assisted Living, and Home Care
Long-term care is the largest single financial risk most retirees face. Medicare covers short-term skilled nursing care after a qualifying hospital stay — but coinsurance for days 21 through 100 runs $217.00 per day in 2026. After 100 days, Medicare coverage ends entirely. What comes next — private pay, Medicaid, or long-term care insurance — depends heavily on which state you’re in.
States That Have Adopted Medicaid Expansion (incl. DC)
41 states
States That Have NOT Adopted Expansion
10 states
Adults in Coverage Gap (non-expansion states)
1 million
Average Nursing Home Costs by State
State-level median monthly skilled nursing facility costs from the TheCareRatings internal facility database are required to populate this comparison fully. That data is drawn from the CMS Provider Data Catalog, which publishes quality and operational data on all 14,742 CMS-certified nursing facilities as of July 2025. Costs vary meaningfully by state and region.
What the federal data does confirm: as of July 2025, approximately 1.24 million residents live in CMS-certified nursing facilities, and Medicaid finances roughly $1 of every $5 spent on healthcare in the United States — and is the primary payer for long-term nursing care. For most nursing home residents, Medicaid is not a last resort. It is the expected financing mechanism once personal assets are spent down.
All but six states impose a tax on nursing facilities, which states use to help finance their Medicaid nursing home payments. This affects the financial stability of nursing homes in your state and their ability to maintain staffing levels.
Assisted Living and In-Home Care Pricing
Assisted living and home care costs also vary significantly by state. State-level pricing data for these care types is not available from whitelisted federal sources as a pre-computed table; the TheCareRatings internal database is the source for these figures. For a breakdown of when assisted living makes sense versus independent living, see Assisted Living vs. Independent Living. For a comparison of staying at home with in-home aides versus moving to a nursing home, see In-Home vs. Nursing Home Care: Differences.
How Medicaid Covers Long-Term Care
Medicaid eligibility for long-term care services differs from general Medicaid eligibility. Financial and functional criteria apply, and they vary by state. In expansion states, Medicaid covers adults with incomes up to 138% of the Federal Poverty Level ($21,597 for an individual in 2025). But long-term care Medicaid has separate asset tests that apply in all 50 states.
In non-expansion states, uninsured rates run nearly twice as high as in expansion states — 14.5% versus 8.0%. Approximately 1.2 million adults in non-expansion states fall into the coverage gap — earning too much for traditional Medicaid but too little for ACA Marketplace subsidies. This primarily affects retirees under 65 who are not yet Medicare-eligible.
One additional development affects Medicaid planning: the 2025 reconciliation law requires expansion states to implement Medicaid work requirements for ACA expansion adults starting January 1, 2027. Most retirees 65 and older qualify for Medicare or aged Medicaid and are not subject to work requirements — but retirees between 60 and 65 who rely on Medicaid expansion coverage should factor this into their planning.
State Taxes on Retirement Income, Pensions, and Social Security
State tax treatment of retirement income is one of the most frequently asked questions in retirement planning — and one of the most consequential. The answer directly addresses the question many searchers are asking: which states do not tax retirement income?
Zero-Income-Tax States
Eight states impose no state income tax at all, which means no state tax on Social Security, pension income, 401(k) or IRA withdrawals, or wages:
- Alaska
- Florida
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
For a retiree drawing $50,000 per year in taxable retirement income, relocating from a state with a 5% income tax to a no-income-tax state represents $2,500 in annual tax savings — before accounting for any differences in property tax, sales tax, or estate tax.
Two important notes: New Hampshire taxes interest and dividend income (though it is phasing this out). Washington state has no income tax but does impose a capital gains tax on gains above $250,000 per year.
Tax treatment of retirement income is governed entirely by state law. The data above reflects state revenue department publications as of mid-2026; state tax law changes frequently, and individual circumstances vary. Consult a licensed elder law attorney or tax professional before making a state-of-residence decision based on tax treatment alone.
States That Tax Retirement Income
The majority of states with income taxes offer at least partial exemptions for Social Security benefits or pension income. The scope of those exemptions varies — some states exempt Social Security entirely but tax IRA withdrawals; others offer age-based deductions. State revenue department websites are the authoritative source for current exemption rules in each state.
For the purposes of this article’s composite score, states with no income tax receive the maximum score on the tax dimension; states that fully exempt Social Security and pension income receive a partial score; states that tax retirement income as ordinary income receive the lowest score on this dimension.
Capital Gains and Estate Tax Considerations
Capital gains tax treatment matters most for retirees with significant investment portfolios or those planning to sell a home. Most states tax capital gains as ordinary income. Washington’s capital gains tax (7% on gains above $250,000) is an outlier for an otherwise no-income-tax state.
Estate taxes apply in 12 states and the District of Columbia as of 2026. For retirees with estates above the state exemption threshold, this can represent a significant wealth transfer cost. State estate tax thresholds and rates are available from each state’s revenue department website.
Bottom 5 States by Affordability and Healthcare Access
Understanding which states score lowest on specific dimensions is as useful as knowing the top performers. The bottom of the range establishes what retirees are trading away.
Most Expensive Cost of Living
By BEA Regional Price Parity, the five most expensive states in 2024 were California (110.7), Hawaii (110.0), and New Jersey (108.8) — followed by Massachusetts and Connecticut, which also consistently rank above 108 in BEA data. Living in these states costs roughly 10% more than the national average across all spending categories. The premium on housing is steeper still: California’s housing rent RPP of 154.3 compares to a national average of 100, meaning a retiree renting in California pays more than 50% above what the same housing would cost at the national average.
High-cost states are not necessarily bad retirement destinations — they often offer strong provider networks, cultural amenities, and established senior care markets. But a fixed retirement income goes measurably further elsewhere.
Lowest Healthcare Provider Density
The states with the lowest Medicare provider density relative to their senior population are concentrated in rural regions: Wyoming, Montana, Alaska, and the Dakotas consistently rank at the bottom of CMS Geographic Variation data by provider-to-beneficiary ratios. State-level computed ratios require direct download from CMS Geographic Variation data (June 2026). For retirees who anticipate complex or ongoing healthcare needs, low provider density is a significant practical constraint.
Highest Long-Term Care Costs
Alaska, Connecticut, Massachusetts, Minnesota, and New York consistently appear at the top of commercial nursing home cost surveys. Because state-level median SNF costs from TheCareRatings internal data are pending, specific monthly cost figures for these states are not published in this article. The BEA RPP housing cost premium in these states provides a directional indicator — states where housing costs are 20–50% above average tend to show similar premiums in institutional care costs.
How to Use This Data to Choose Your Retirement State
Step 1: Rank Your Own Priorities
The composite score in this article weights five dimensions equally by design — giving each dimension a standardized weight to enable comparison. Your situation almost certainly calls for different weights.
Start by ranking these five factors in order of personal importance:
- Cost of living
- Medicare provider availability
- Long-term care affordability
- Tax burden
- Medicaid expansion status
If you or a spouse have a chronic condition that requires regular specialist visits, move Medicare provider density to the top. If you are primarily focused on making savings last, weight cost of living and tax burden more heavily. If you are 62 and not yet Medicare-eligible, Medicaid expansion status moves from a 10% factor to a critical one.
Step 2: Find Your Weighted Scores
For each state you’re considering, look up the raw values on each dimension:
- Cost of living: BEA RPP by state at bea.gov
- Medicare provider density: CMS Geographic Variation dataset at data.cms.gov
- Long-term care costs: TheCareRatings state comparison pages
- Tax burden: Your state’s revenue department website
- Medicaid expansion: KFF tracker (updated August 2026)
Apply your personal weights. A state that ranks 4th in our composite might rank 1st for your specific priorities.
Step 3: Consider Life Factors Beyond Data
The data covers what can be measured. It does not cover proximity to family, climate, community fit, or the practical reality of leaving a network of friends and doctors you’ve spent decades building. When you visit a prospective state, ask the questions that data can’t answer.
If you’re visiting facilities or planning a care transition, see 6 Nursing Home Tour Questions for a framework that applies to any state. If you’re navigating this conversation with an aging parent, Talk to Aging Parents About Retirement & Care covers how to structure that discussion.
The data in this article gives you a foundation. What you build on it is yours to decide.
Important: This article provides general information about retirement state comparisons and long-term care costs and is not financial, legal, or tax advice. Eligibility rules, benefit amounts, and program details vary by state and change frequently. Before making decisions about Medicaid planning, long-term care insurance, or estate matters, consult a licensed elder law attorney or a financial advisor who specializes in senior care.
Sources cited in this article:
- Kaiser Family Foundation — Nursing Facility Characteristics (July 2025): https://www.kff.org/medicaid/a-look-at-nursing-facility-characteristics/
- CMS Provider Data Catalog — Nursing Homes: https://data.cms.gov/provider-data/datasets?theme%5B0%5D=Nursing+homes+including+rehab+services
- CMS Five-Star Quality Rating System: https://www.cms.gov/medicare/health-safety-standards/certification-compliance/five-star-quality-rating-system
- CMS Five-Star Technical Users’ Guide (July 2026): https://www.cms.gov/medicare/provider-enrollment-and-certification/certificationandcomplianc/downloads/usersguide.pdf
- BEA Regional Price Parities by State and Metro Area (2024, released Feb. 2026): https://www.bea.gov/data/prices-inflation/regional-price-parities-state-and-metro-area
- BEA News Release — Real Personal Consumption Expenditures and Income by State (2024): https://www.bea.gov/news/2026/real-personal-consumption-expenditures-state-and-real-personal-income-state-2024
- KFF — Status of State Medicaid Expansion Decisions (August 21, 2026): https://www.kff.org/medicaid/status-of-state-medicaid-expansion-decisions/
- KFF — Coverage Gap in Non-Expansion States (July 2026): https://www.kff.org/medicaid/how-many-uninsured-are-in-the-coverage-gap-and-how-many-could-be-eligible-if-all-states-adopted-the-medicaid-expansion/
- CMS Fast Facts (April 2026): https://data.cms.gov/sites/default/files/2026-04/CMSFastFacts2026_508.pdf
- CMS Geographic Variation by National, State, and County (June 2026): https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-geographic-comparisons/medicare-geographic-variation-by-national-state-county
- KFF — Total Medicare Beneficiaries by State (2025): https://www.kff.org/medicare/state-indicator/total-medicare-beneficiaries/
- KFF — Medicaid HCBS Waiver Waiting List Enrollment (2024): https://www.kff.org/medicaid/state-indicator/medicaid-hcbs-waiver-waiting-list-enrollment-by-target-population-and-whether-states-screen-for-eligibility/
- KFF — Medicaid Work Requirements Tracker (May 2026): https://www.kff.org/medicaid/medicaid-work-requirements-tracker-1115-waivers/
- KFF — Medicaid Topic Overview (2026): https://www.kff.org/topic/medicaid/
- Last updated: August 31, 2026
- Article reviewed by: TheCareRatings editorial team