You'll Allegedly Retire With The Most Money If You Live In These 3 States
To determine which U.S. states offer the best value for residents, TollFreeForwarding.com evaluated all 50 states using the following cost-of-living factors:
Each state was assigned a score from 1 to 10 for each category, based on how it ranked compared to other states (10 representing the most favorable ranking). These scores were then totaled to produce a final score out of 100 for each state. The higher the total score, the more cost-effective the state is considered to be for stretching your income.
So, without further ado, South Dakota is the best state for saving money, according to this study. The key factors in determining this were the state's affordable rent prices, low state and local taxes, grocery costs, and childcare expenses. The state received a 73.6 out of 100.
As of mid‑June 2025, Zillow reports the average rent across all property types and bedroom counts in South Dakota is approximately $1,220 per month.
Missouri came in second, and it features some of the lowest home prices in the country. They also performed strongly in several other cost-related categories, including groceries, childcare, gas prices, and even the cost of a cup of coffee.
According to Zillow's Home Value Index, the average home price in Missouri was $260,908 in May 2025.
Coming in third, Kentucky offers affordable living with low rent and home prices. The state also benefits from low state and local taxes, along with groceries, childcare, and gas.
Kentucky has a flat 6% statewide tax with no additional local sales taxes, and most groceries and prescription drugs are tax-free.
Despite not ranking in the top half of states for average income, these three make up for it with significantly lower cost of living. Here are the top ten states, and their overall ranking from the study:
Now that we've gone over the best states for retirement, let's discuss the worst. California ranked the worst, and Hawaii and New York also scored in the bottom three.
Interestingly, these bottom states perform well in terms of average income, but their high costs of living expenses, like taxes, housing, and everyday expenses drag down their overall scores. (California currently has the highest average gas prices in the United States at $4.91 per gallon for regular unleaded gasoline!) Here is how other states stacked up:
So, what are your thoughts on this study — and retirement in general? Let us know in the comments!
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