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SmartAsset: Most Affordable Cities for an Early Retirement - 2022 Edition

Fewer Americans plan to work past the age of 62. In a March 2022 survey conducted by the Federal Reserve Bank of New York, 49.2% of Americans plan to work past the age of 62, a figure that is 6.2% lower than two years prior. However, it can be difficult to make early retirement a reality. Stretching retirement savings long enough to live comfortably is challenging, but some cities are better than others for bringing early retirement plans to fruition.

In this study, we determined the best places for an early retirement, comparing the 100 largest cities across four categories. They include tax friendliness, elderly care, affordability and livability. For more information on underlying metrics within each category and how we put together our findings, read our Data and Methodology section below.

Key Findings

  • Arizona cities are the most affordable for early retirees. Four of the top 10 cities are located in Arizona. Gilbert and Chandler claim the first two spots, while Scottsdale and Mesa rank fourth and seventh, respectively. All four cities are very tax friendly for retirees. Specifically, we estimate that the effective income tax rate for retirees is less than 19% on average in all four cities and the state of Arizona does not tax capital gains.
  • Housing costs make up roughly 20% of income in the top 10 cities. The general rule of thumb is to spend at most 30% of income on housing costs, and this is especially important for retirees who are on a fixed budget. Across the top 10 cities for an early retirement, median housing costs make up 20.42% of the median household income, on average.


1. Gilbert, AZ

Across the 14 individual metrics we considered, Gilbert, Arizona ranks in the top five cities for three of them. It has the fifth-best average housing costs relative to income (19.35%) and ranks third-best for its low violent crime and property rates (109 and 1,077 per 100,000 residents, respectively).

2. Chandler, AZ

Chandler, Arizona is located less than 10 miles away from Gilbert. Across our four categories, Chandler ranks 12th-best in tax friendliness and 13th-best in elderly care. In terms of health and senior care, the average annual cost of a silver health insurance plan is roughly $8,600 (16th-best) and there are 11.19 retirement homes available for every 100,000 residents (13th-best). Housing costs relative to income fall below 20% (seventh-best).

3. Henderson, NV

Henderson, Nevada ranks 10th-best in our tax friendliness category: it has an effective income tax of 16.24%, an effective average property tax of 0.58% and the state has no capital gains tax. Henderson also has the eighth-best property crime rate (1,426 per 100,000 residents) and the 12th-best violent crime rate (208 per 100,000 residents). Dining and entertainment establishments make up close to 12% of all establishments, which ranks 11th-best.

4. Scottsdale, AZ

Scottsdale, Arizona ranks well in tax friendliness (15th-best) and elderly care (14th-best). This city also has a 0.52% average effective property tax rate (fourth-best). In terms of elderly care, Scottsdale ranks 13th-best for the number of retirement homes per capita (roughly 11 for every 100,000 residents) and 16th-best for the average annual cost of a silver health insurance plan (roughly $8,600). This city also has the sixth-best housing costs relative to income (19.72%) and the eighth-best violent crime rate (179 per 100,000 residents).

5. Plano, TX

Across the cities we considered, the most affordable Texas city for an early retirement is Plano. This city places in the top 30 across all four categories in this analysis: 16th-best in the tax friendliness category, 27th-best for both affordability and livability and 30th-best for elderly care. Plano also has the best effective income tax for retirees (16.24%) and there is no state capital gains tax in Texas. Additionally, it ranks second for housing costs relative to income (19.26%), fifth for violent crime rate (155 per 100,00 residents) and ninth for the number of medical facilities per capita (almost four per 1,000 residents).

6. Louisville, KY

Individuals looking to retire early may be interested in Louisville, Kentucky as the city ranks very well for our categories of affordability and livability. This city's median annual housing costs make up only 20.30% of median household income (11th-best) and the estimated annual cost of living is $24,505 (19th-best). The city is also relatively safe. It has the ninth-lowest property crime rate (about 1441 per 100,000 residents) and 21st-best violent crime rate (less than 346 per 100,000 residents).

7. Mesa, AZ

The third-most populous city in Arizona, Mesa ranks well for the categories, elderly care and tax friendliness. Residents here can expect to pay roughly $8,600 annually for a silver health insurance plan (16th-best). There are also roughly 11 retirement homes for every 100,000 residents (13th-best) and three medical facilities for every 1,000 residents (44th-best). In terms of taxes, the average effective property tax rate is seventh-lowest, at 0.53%, and the state capital gains tax in Arizona is 4.50%.

8. Boise, ID

Boise is the only Idaho city in the top 10 and it ranks in the top 30 across three categories: affordability (19th-best), elderly care (22nd-best) and livability (29th-best). When comparing specific metrics, Boise has the seventh-highest concentration of retirement homes (roughly 12 per 100,000 residents), 10th-lowest annual cost of living ($23,106), 10th-best comparison of housing costs to income (20.04%) and 14th-lowest violent crime rate (less than 293 per 100,000 residents).

9. Pittsburgh, PA

Pittsburgh, Pennsylvania ranks ninth-best for elderly care and 12th-best for affordability. The average annual cost of a silver health insurance plan is just under $8,400 (15th-best). Additionally, the average annual cost of living in Pittsburgh is $23,403 (14th-lowest) and housing costs make up 22.18% of the median household income (33rd-best).

10. Lexington, KY

Lexington is the second Kentucky city in our top 10. Across our four categories, Lexington ranks highest in affordability (ninth-best) and livability (19th-best). Across specific metrics, Lexington ranks ninth-best for housing costs relative to income (20.01%), 12th-best for estimated annual cost of living ($23,163), 16th-best for violent crime rate (about 320 per 100,000 residents) and 19th-best for average number of days with extreme temperatures (less than 15 per year).

Data and Methodology

To find the best cities for an early retirement, SmartAsset looked at data for the 100 largest cities in the U.S. We compared them across four categories, spanning 14 individual metrics:

  • Tax friendliness. We analyzed the effective income tax for a retiree with $50,000 in income, average effective property tax rate, sales tax (combination of state and local) and state capital gains tax. Data comes from the Census Bureau’s 2020 5-year American Community Survey and realized1031.com.
  • Elderly care. This category includes the average annual cost of the silver health insurance plan, retirement homes per 100,000 residents and medical facilities per 1,000 residents. Data comes from the Census Bureau’s 2020 5-year American Community Survey and Kaiser Family Foundation health insurance calculator.
  • Affordability. To create this score, we looked at the estimated annual cost of living for an individual, home value-to-income ratio and housing costs relative to income. Data comes from the Census Bureau’s 2020 5-year American Community Survey and MIT Living Wage calculator.
  • Livability. This includes property and violent crime rates, concentration of dining and entertainment establishments and average number of days with extreme temperatures (i.e. less than 30 degrees or higher than 80 degrees). Data comes from the Census Bureau’s 2020 5-year American Community Survey, the 2020 FBI crime report, neighborhoodscout.com and the National Oceanic and Atmospheric Administration.

First, we ranked each city in all metrics, assigning an equal weight to each. We then averaged the rankings across the four categories listed above.

For each category, the place with the highest average ranking received a score of 100. The place with the lowest average ranking received a score of 0. We compiled our final list by averaging category scores.

Tips for Succeeding in Early Retirement

  • Make your money work for you. Regardless of how you are stashing money away, use our savings and investment calculators to project your growth over time - both of which take into account the rate of return and additional contributions.
  • Make a retirement plan as early as you can. While vehicles exist for compounding savings later in life such as catch-up contributions, the earlier you start investing in your future, the easier it will be to retire early. Learn about the different retirement accounts that exist to help you make an informed decision on which option suits your needs best. Then use our retirement calculator to visualize your progress over the next several years.
  • Work with an expert. A financial advisor can help you manage and make the most of your money, which could mean less financial stress for you as you plan your early retirement. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Questions about our study? Contact press@smartasset.com

Photo credit: ©iStock/AscentXmedia

Anja Solum Anja Solum is a data journalist at SmartAsset covering a variety of personal finance topics, including retirement and debt management. Before joining SmartAsset, she worked on both agency and in-house content marketing teams where she developed her love for data analysis and visualization. In her free time, she nurtures a passion for gaming, a recent addiction to anime & KDramas, and a mischievous labrador retriever. A bit of a nomad, she’s lived in Norway, Jamaica, and Denmark in addition to the U.S. but now resides in Raleigh, North Carolina.
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