Oklahoma’s cost of living index hit 85.5 in 2026 — meaning a retiree spends roughly 14.5% less than the national average on everyday expenses. Most retirement planning guides still point retirees toward Florida or Arizona. Both states routinely post indexes above 100. That gap is not trivial. On a $1,927/month Social Security benefit — the average for retired workers as of early 2026 — a 14.5% savings equals roughly $279 freed every single month.
The Common Belief: Sun Belt States Are the Smart Retirement Move
Read more: Social Security Payment Dates 2026
Ask almost any financial planner where to retire cheaply and you’ll hear Florida, Arizona, or Nevada. The pitch is familiar: no state income tax, warm weather, active adult communities. (I heard this same advice at a 2024 continuing-education seminar in Chicago — three out of four presenters named Florida without hesitation.) The problem is that housing costs in those states have surged dramatically since 2020. Median rent for a 1-bedroom in Phoenix reached $1,430/month by . In Orlando, it topped $1,520/month. That is before groceries, utilities, or healthcare.
The Motley Fool argues that states with no income tax provide meaningful savings for retirees with pension or investment income. That logic holds — but only if your total income exceeds roughly $40,000/year. For the 40% of Social Security recipients who rely on it as their primary income source, housing and grocery costs matter far more than marginal tax rates. A retiree in Tulsa, Oklahoma pays state income tax but still spends $6,000–$8,000 less per year than a comparable retiree in Tampa.
#1 Most Affordable State
on avg Social Security benefit
OK, MS, AL, MO, WV
Oklahoma vs. Florida
2026 Full Ranking: The 10 Cheapest States by Monthly Cost of Living
Read more: States With No Income Tax 2026: 9 States Listed — Plus the Hidden Costs Retirees Miss
Oklahoma ranks number one for overall affordability in 2026 with an 85.5 cost of living index, followed by Mississippi, Alabama, Missouri, and West Virginia. The index uses 100 as the national baseline. Every point below 100 represents roughly a 1% savings across housing, groceries, utilities, transportation, and healthcare.
| Rank | State | COL Index (2026) | Est. Monthly Budget (Single Retiree) | State Income Tax on SS? |
|---|---|---|---|---|
| 1 | Oklahoma | 85.5 | ~$2,100–$2,400 | No (exempt) |
| 2 | Mississippi | 86.1 | ~$2,100–$2,450 | No (exempt) |
| 3 | Alabama | 87.3 | ~$2,150–$2,500 | No (exempt) |
| 4 | Missouri | 87.6 | ~$2,200–$2,550 | Partial deduction |
| 5 | West Virginia | 88.1 | ~$2,200–$2,600 | Phasing out by 2026 |
| 6 | Kansas | 88.6 | ~$2,250–$2,650 | No (exempt) |
| 7 | Iowa | 89.2 | ~$2,300–$2,700 | No (exempt from 2026) |
| 8 | Indiana | 89.7 | ~$2,300–$2,750 | Partially taxed |
| 9 | Tennessee | 90.0 | ~$2,350–$2,800 | No state income tax |
| 10 | Arkansas | 90.3 | ~$2,350–$2,800 | No (exempt) |
| Best Overall for Retirees on Fixed Income: Oklahoma and Mississippi — lowest combined housing + grocery cost, Social Security fully exempt from state tax | ||||
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