The Best Retirement Cities in States That Don't Tax Retirement: Your Guide to Affordable Living on $2,000 Monthly

Finding the right place to retire doesn’t require moving to an expensive coastal metropolis or tropical paradise—especially when you strategically consider states that don’t tax retirement income. By focusing on destinations in tax-advantaged states, you can stretch your retirement dollars significantly further while enjoying pleasant weather year-round. Here’s what you need to know about retiring affordably in retirement-friendly states.

Why States That Don’t Tax Retirement Income Matter for Your Financial Plan

When you’re living on a fixed income, every dollar counts. States that don’t tax retirement income can save retirees thousands annually, which is substantial when your monthly budget hovers around $2,000. According to data analyzed by GOBankingRates, many retirees can maintain a comfortable lifestyle—complete with recreational activities, dining out, and leisure pursuits—by choosing locations in states with favorable tax treatment for retirement savings and Social Security benefits.

The research examined 25 U.S. cities across various states, evaluating factors including cost of living, age demographics, population trends, and livability scores. The analysis compared expenses for both homeowners and renters receiving Social Security benefits, revealing that strategic location selection can reduce your monthly obligations substantially compared to the national average cost of living for seniors.

Florida: The Unmatched Tax Haven for Retirees

Florida consistently attracts retirees due to its combination of no income tax, warm year-round weather, and diverse community options. Across multiple Florida cities analyzed in the study, retirees can enjoy lifestyle and affordability simultaneously:

Tallahassee (Livability: 85) stands out as the state capital, offering cultural attractions alongside outdoor recreation. Homeowners can manage on approximately $1,248 monthly, while renters might budget around $995—both well below the $2,000 target. The cost of living runs nearly 10% below the national average, with parks, hiking trails, and an active arts scene providing abundant activities.

Fort Myers (Livability: 85) provides beach access and straightforward public transportation. Despite living expenses 4.2% above the national average, the monthly costs for homeowners ($1,746) and renters ($1,468) remain affordable when factoring in Florida’s tax advantages on retirement income.

Jacksonville (Livability: 84) delivers coastal living and adventure at bargain prices. The cost of living is 4.3% lower than the national average, with homeowners spending approximately $1,197 monthly and renters budgeting $1,073—ideal for those seeking beach proximity without premium pricing.

Pensacola (Livability: 83) offers perhaps the most affordable Florida option, with costs 11% below national averages. Homeowners can plan for just $929 monthly, and renters approximately $1,136. The city’s beaches, upscale dining, and thriving arts community provide excellent quality of life on a lean budget.

Daytona Beach (Livability: 80) appeals to outdoor enthusiasts with 23 miles of white sand beaches and active water sports. The cost of living sits about 5% below the national average, with homeowners’ expenses around $1,130 and renters at $1,099.

Orlando (Livability: 81) combines theme park entertainment with outdoor recreation and consistent warm weather. While 6% higher than the national average in cost of living, homeowners budget $1,837 and renters $1,461—still manageable within the $2,000 monthly framework when you leverage state tax benefits.

Tampa (Livability: 80) offers beautiful daily weather, numerous outdoor activities, and free attractions like the Riverwalk. Though costs run 4.2% above the national average ($1,737 for homeowners, $1,651 for renters), the lifestyle value justifies the slightly higher expenses.

Lakeland (Livability: 77) provides a small-town atmosphere with affordable neighborhoods. The cost of living is 8.4% cheaper than the national average, with homeowners spending $1,294 and renters $1,208 monthly.

Texas: Combining No Income Tax With Warm Climate

Texas represents another major destination for retirement-minded individuals seeking states that don’t tax retirement income. Multiple Texas cities offer distinct advantages:

El Paso (Livability: 81) leads with extraordinarily low costs—18.1% below the national average. Housing is 44.4% cheaper than average, making homeowner expenses just $712 monthly and renter costs $975. For those who appreciate desert heat and authentic cuisine, El Paso provides exceptional value.

San Antonio (Livability: 80) combines affordability with warm weather and friendly communities. The cost of living is 8.7% below average, with groceries running 8.6% lower. Homeowners budget $847 monthly while renters plan for $801—some of the lowest costs in the nation.

Corpus Christi (Livability: 80) offers beach living at remarkable savings. The cost of living is 16.5% below the national average, with homeowners at $736 and renters at $855 monthly—perfect for those seeking coastal retirement on a shoestring budget.

Dallas (Livability: 81) provides urban amenities with reasonable affordability. Costs align closely with the national average, though groceries run slightly cheaper and healthcare is roughly 2% lower. Homeowners budget $1,346 and renters $1,142 monthly.

Midland (Livability: 78) delivers a slower pace with growing arts opportunities. The cost of living is 7.8% below average, with housing approximately 10% lower, keeping homeowner expenses at $1,389 and rents at $1,124.

Other Strong Contenders: Retiree-Friendly States Worth Exploring

Beyond Florida and Texas, additional states offer compelling combinations of affordability and livability for retirement:

North Carolina attracts retirees with moderate costs and engaging communities. Raleigh (Livability: 84) offers museums, restaurants, and free botanical gardens, with costs for renters around $1,069. Charlotte (Livability: 80) provides family-friendly appeal with mountain and beach access, with renter costs at $1,182 monthly.

South Carolina combines Southern hospitality with affordability. Greenville (Livability: 82) features costs 8.7% below average ($1,035 for renters), while Columbia (Livability: 79) offers even lower expenses at 12.6% below average, with rents at $1,065 and homeowners at just $886.

Georgia delivers cultural vibrancy and reasonable costs. Savannah (Livability: 81) showcases historic charm with costs 9.8% below average ($1,250 for renters, $1,369 for homeowners). Athens (Livability: 80) emphasizes music and nightlife while maintaining costs 12.4% below average, with housing approximately 20% cheaper.

Virginia’s Norfolk (Livability: 81) offers urban-coastal blend with 8.6% cost savings, featuring homeowner expenses of $1,231 and rents at $1,162.

Nevada’s Las Vegas (Livability: 82) provides no income tax plus lower healthcare costs (7% cheaper). Though overall costs run 10.6% above average, homeowners budget $2,089 and renters $1,203—workable within the framework.

Rhode Island’s Providence (Livability: 82) combines small-town character with big-city attractions, featuring healthcare costs 12.7% below average despite overall costs running 8.8% higher than average.

Connecticut’s New Haven (Livability: 78) offers affordable housing (21% cheaper than average) alongside walkable neighborhoods and cultural attractions, with renters at $1,954 and homeowners at $1,690.

Wisconsin’s Milwaukee (Livability: 79) provides significant savings—12% below average overall with housing 44% lower. Homeowners manage $648 and renters $763 monthly.

Georgia’s Atlanta (Livability: 78), though with costs 13.3% above average due to the housing market, still appeals to those prioritizing urban amenities.

How to Maximize Your Retirement Budget in States That Don’t Tax Retirement

Retiring on $2,000 monthly becomes increasingly achievable when you strategically select locations in states that don’t tax retirement income. The key advantages include:

Tax Savings: No income tax on Social Security, pensions, and retirement account withdrawals can preserve $200-400+ monthly for other expenses or emergencies.

Cost Flexibility: By selecting cities where the baseline cost of living already runs below the national average, you gain cushion for unexpected medical expenses or recreational indulgences.

Housing Affordability: Many retirement havens feature housing costs 20-44% below national averages, representing your largest potential savings.

Healthcare Access: Certain states offer lower healthcare costs—crucial for seniors—with some cities showing 4-12% reductions compared to national averages.

Lifestyle Balance: These retirement destinations aren’t simply cheap—they offer recreational activities, cultural attractions, and community engagement that make retirement fulfilling rather than merely survivable.

The 2025 analysis of American cities demonstrates that comfortable retirement on approximately $2,000 monthly is entirely feasible across multiple states that don’t tax retirement income. Whether you prioritize beach access, urban cultural opportunities, warm year-round weather, or small-town community, strategic selection among these 25 locations—particularly focusing on tax-advantaged states—allows you to enjoy your golden years without financial stress or lifestyle sacrifice.

The data reflects current conditions based on U.S. Census Bureau American Community Survey information, Social Security Administration resources, Bureau of Labor Statistics data, and Zillow housing information from 2025. Livability assessments came from AreaVibes, with weather analysis sourced from multiple recognized weather ranking publications. As you plan your retirement in states that don’t tax retirement income, use these metrics alongside personal preferences regarding climate, community size, and desired recreational activities to identify your ideal location.