Thinking of heading down South for your retirement? You’re not alone. Thanks to its warm climate, lower cost of living, and tax-friendly treatment of retirees, many seniors choose a Southern state to live out their post-retirement years. In fact, a U.S. migration report released in January 2023 by American Moving Services shows that Americans are migrating to the South more than to any other region.
If you’re currently on the hunt for the best place to settle, one of the key considerations you’ll need to think about is the cost of retirement. In partnership with Southern Living, we examined Census data and Bureau of Labor Statistics reporting to determine the cost of retirement in 41 Southern towns and cities.
Based on our analysis, of the 41 chosen cities, we found Chattanooga, Tenn., Huntsville, Ala., and Ocean Springs, Miss. to be three excellent picks for cost and affordability. Take a closer look at why these locales topped our list.
Chattanooga, TN: Best All Around
Chattanooga, Tenn., took the top spot as the best all-around location for retirement. The city has scores generally in line with the national average for almost all metrics in our study.
What really stood out was its robust job market—perfect for retirees who want to keep their semi-retirement options open. Not only does Chattanooga have an unemployment rate of 3.2% (as of November 2023) which is lower than the already-low national average of 3.7% (as of January 2024), but it’s a hub for jobs in the hydroelectric power generation industry, thanks to its proximity to the Chickamauga Dam.
Also appealing: Chattanooga’s Hamilton County has many hospitals and multiple healthcare systems to choose from, offering residents plenty of healthcare access. The Chattanooga area is also home to wide selection of excellent restaurants offering something for all tastes. These are important factors for a demographic that wants to make sure they have access to many health care options, as well as ample places to enjoy dining out and other recreation.
As for housing costs, Chattanooga’s median rent is $1,179 as of January 2024, and its median home sale price is $285,000 as of December 2023, making it affordable for both renters and buyers—especially those relocating from higher-earning areas. However, Chattanooga residents earned between 2018 and 2022 a median household income of $57,703, which was below the national figure. The national median for that period was $75,149. Thus, at least partially explaining the more reasonable housing costs.
Retirees also have favorable tax treatment in Tennessee, since the state is one of nine that does not have an individual income tax.
Huntsville, AL: Best for Affordability
If finding an affordable town to live in is your number one priority, then don’t overlook Huntsville, Alabama. It came in as the most affordable retirement spot in our study based on a combination of its low average home prices and rent combined with a decent median income.
According to data from the U.S. Census Bureau, residents of Huntsville, Ala. had a median household income of $67,874 between 2018 and 2022. Although this is below the national median of $75,149, Huntsville is highly affordable once you begin reviewing median home values and gross rent prices.
The median home sale price in Huntsville is $297,200 which puts its income-to-home value at about 22.8%. That means paychecks go a little bit further as they relate to home prices, compared to the 17.4% income-to-home value nationally, based upon a median home price of $431,000 as of Q3 2023.
In addition, Alabama has the second lowest property taxes in the nation.
The same is true for Huntsville renters. While the median rent is $1,051 per month, residents have median monthly income of $5,656, which means it takes around 18.6% of income to cover rent. This is below the national figure of 22% of monthly income that it is need to pay the rent (based on the national median rent of $1,379 and $6,262 national median monthly household income).
Besides affordability, Huntsville retirees can also feel confident knowing that the unemployment rate is just 2.1% (November 2023), which was over a percentage point and a half lower than the national rate of 3.7% (January 2024). Whether or not you decide to return to work post-retirement, strong employment is a sign that an area is thriving overall.
Ocean Springs, Miss.: Best for Homebuying
Homes are very affordable in Ocean Springs, Miss., and not just because of the below-average $184,800 median home value (as compared to the $244,900 national average). The median annual income of $63,653 in Ocean Springs makes up about 34.4% of the area’s average home value—and that’s six percentage points higher than the national figure of 28.2%.
Put another way, when all the numbers are crunched, it means that buying a home in Ocean Springs is 22% more affordable than it is nationally. And, in our study, it was the most affordable small town home market.
Only Birmingham, Ala., which is a city, had a lower homebuying cost.
Another perk of retiring in Mississippi is that the state does not tax retirement income, including pensions.
The Bottom Line
Retirement should be a time to live your best life after decades of working hard and taking care of others. If you’re planning to relocate, it’s important to weigh a number of factors, including proximity to family, climate, and personal preferences, as well as practical considerations like cost of living.
As Americans live longer and healthier lives, having an affordable retirement vision is more important than ever. Where you decide to settle down can have a big impact on how far your retirement savings will take you and the type of lifestyle you can afford, so do your research accordingly. If moving to the South is on your radar, at least when it comes to cost, Chattanooga, Tenn., Huntsville, Ala., and Ocean Springs, Miss. are all worth exploring.