25 Best Places in the US to Retire on $5000 a Month

Published on February 19, 2024 at 8:49 am by Rabeeta Abbas in Lists, News, Retirement

In this article, we list and discuss the 25 Best Places in the US to Retire on $5000 a Month. If you would like to skip our detailed discussion of the topic, you can go directly to 10 Best Places in the US to Retire on $5000 a Month.

Over the past three decades, the average retirement age in America has increased by 3 years, from 62 to 65 for men, and from 59 to 62 for women. According to the US Social Security Administration, the full normal retirement age for anyone born after 1960 is now 67. In other words, Americans are now working longer and retiring later than ever. On top of this, Republicans, one of the leading parties in the US, are pressurizing the current government to increase the full retirement age from 67 to 69. They argue that since life expectancy in the US has increased, the retirement age should be raised as well — it’s only “logical” that they should be allowed to work longer.

Another argument that Republicans put forth is that the government’s social security funds are depleting. Nikki Haley, the Republican presidential candidate, says that in the next ten years, the social security funds will drop significantly. The 2022 Social Security Trustees report backs Haley’s claims as it finds that due to low inflow (income received through payroll taxes) and high outflow (monthly benefit paid to retirees by the state) retirees will only be able to receive full Social Security benefits till 2034.

If no legislative action is taken and Social Security Benefits are paid in full, after 2034, the trust funds would only be sufficient to pay 77% of full Social Security benefits. It’s an issue that demands immediate action and may be resolved if the government increases the retirement age. However, although increasing the retirement age will potentially save Social Security funds from complete depletion, potential retirees are expected to have mixed reactions.

On the one hand, retirees who want to work longer will be happy as an increase in retirement age will let them work more. On the other hand, retirees who pre-planned their retirement age and had everything aligned in their lives will feel lied to by the government. The latter holds more weightage; a large portion of expected retirees would not want to postpone their golden years into the 70s. Some retirees are also afraid of losing their flexible retirement option. Note that people aged 62 can currently opt for flexible retirement, but if the retirement age increases to 69 as the Republicans demand, the eligibility age for flexible retirement plans may also increase, resulting in reduced benefits for the retiree.

With the possibility of raising the retirement age on the table, the gravity and possible impact of the decision on millions of people in the US cannot be overlooked. According to the data posted by the US. Census Bureau in 2023, 77.5 million people in the US are over 60, which means 23.4% of the total population in the US will possibly retire in the next ten years.

However, despite the retirement age closing in, the population seems to be less prepared with their plans for a comfortable retirement. According to a 2023 survey by CNBC, 56% of Americans said they were not on track or making enough money to retire comfortably. The surging commodity prices have made it even more difficult to plan your life ahead and live accordingly. Perhaps the high cost of living and unpreparedness for retirement are two of the main reasons why the average retirement age is increasing over time. An efficient way to tackle both these problems is switching your state and moving to one that’s less expensive than the one you currently live in (See: 25 Best US Cities Where You Can Retire on $2500 a Month).

At the same time, it’s important to note that the cost of living varies from state to state and city to city in the US. According to Insider Monkey’s cost of living index, Hawaii is the most expensive state to live in 2024, with an annual cost of living of over $103,000. On the other hand, Mississippi takes the spot for the state with the lowest annual cost of living, around $50,000. Hawaii is an exceptionally expensive state to live in mainly because it’s an island state with limited land for agriculture and manufacturing. Therefore, the state heavily relies on imported consumer goods and food, which incurs shipping costs and makes the basic goods expensive.

Commodity prices are not the only costs that have been fluctuating in the US; healthcare expenses have been on the rise for the past couple of decades as well. According to the Centers for Medicare & Medicaid Services report, the US healthcare spending grew 4.1% in 2022, reaching $4.5 trillion or $13,493 per capita. Furthermore, from 2022- 2031, national healthcare expenditure will rise even more, with an average growth rate of 5.4%. As you age, you can expect to pay more for the same drug prescriptions and medical services compared to today. The same is the case with other commodities and services.

Put simply, you have to keep inflation in mind and save more than you currently spend so you can cover your future living costs comfortably. Many prospective retirees in the U.S. rely on Social Security for retirement funds, but since that’s already running out, now is a good time to consider other retirement plans that will allow you to live your golden years comfortably and luxuriously. You may look into private retirement savings plans such as 401(k) or Individual Retirement Account (IRA), which are retirement savings accounts where you can save and invest without getting taxed. The 401(k) plan is given by most employers in America. According to the U.S. Census Bureau, it was the most common private retirement savings plan, with 34.6% of the individuals having it in 2020.

Top Companies For Potential Retirees

Some major companies with potentially prosperous IRAs are Berkshire Hathaway Inc (NYSE: BRK.B) and Axa SA (EPA: CS). Berkshire Hathaway (NYSE: BRK.B) is a holding company, aiming to cross the trillion-dollar mark and join the likes of Apple Inc (NASDAQ: AAPL) and Microsoft Corp (NASDAQ: MSFT). Berkshire Hathaway (NYSE: BRK.B) also has high stakes in some giant companies like Bank of America (NYSE: BAC), Chevron (NYSE: CVX), and Coca-Cola (NYSE: KO).

Speaking of investments, Legal & General Group PLC (LON: LGEN) is the UK’s leading financial service company with several investment plans, such as investments in stocks and pension pots. More importantly, Legal & General Group PLC (LON: LGEN) also has investment plans in retirement savings accounts for retirees and those approaching retirement. Legal & General Retirement America (LGRA) by Legal & General (LON: LGEN) was established in the US in 2015 and secured the retirement of over 27,000 annuitants in 2023.

Aging comes with an increased need for healthcare services. According to the American Psychology Association, approximately 92% of older people develop at least one chronic disease, and 77% suffer from two or more. If out-of-pocket costs for healthcare are not affordable, older adults are more likely to make significant compromises on their health. Fortunately, the U.S. is home to some of the top insurance companies. For example, the UnitedHealth Group Inc (NYSE: UNH) has several group Medicare Advantage plans catering to the unique needs of retirees. The AARP Medicare Supplement plans by UnitedHealthcare (NYSE: UNH) will cover expenses that are not covered by the federal government’s Original Medicare. UnitedHealthcare (NYSE: UNH) also allows retirees to transition to different Medicare plans through their exchange model if the current one doesn’t suit them.

That said, shifting states and relocating as you start to reach retirement age is perhaps one of the most efficient ways to save money and live comfortably during your golden years.

With that said, let’s head over to the list of the best places in the US to retire on a budget of $5,000 a month.

25 best places in the US to retire on $5000 a month

Our Methodology

To compile the list of 25 Best Places in the US to Retire on $5000 a Month, we have used several sources such as Yahoo Finance, Travel & Leisure, US News, and Nasdaq, to name a few. Next, using Best Places for cost of living data, we filtered out the cities having average rents for two-bedroom units more than $1,184 and requiring an average monthly budget of $3,932.

We then ranked the cities based on the sum of their average rent and monthly overall costs. We’ve also assigned scores to each place based on the crime index, healthcare, livability score as mentioned on the AARP Livability Index, economy, and weather comfort index score. Note that the AARP Livability Index scores each place out of 100, and the national average is 50. A high score indicates better livability. Places have been ranked in descending order from the highest expenses to the lowest.

By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.

Here are the 25 Best Places in the US to Retire on $5000 a Month:

25 Best Places in the US to Retire on $5000 a Month

25. Frostburg, Maryland

Monthly living budget: $4,571

Monthly average rent: $880

Frostburg, Maryland is one of the best places in America to retire on $5,000 a month. It has a monthly average rent of $880 and requires an average monthly living budget of $4,571. The town boasts a low crime rate, with as little as 4.0 incidents happening per 1000 people. Furthermore, the local economy of Frostburg, Maryland is stable and there are plenty of part-time work and volunteering opportunities available too.

While the winter in Frostburg, Maryland can be cold, the town experiences four seasons and allows retirees to enjoy a range of outdoor activities. The town’s overall charm makes it a great option for those seeking a peaceful retirement on a budget. There are plenty of top-notch local healthcare facilities available as well.

24. Tiffin, Ohio

Monthly living budget: $4,453

Monthly average rent: $800

A 30-minute drive from Lake Erie will take you to a small city, Tiffin, Ohio, with friendly people who look out for each other. Tiffin is one of the safest cities in Ohio, where both violent and property crime rates are less than the US average. Moreover, with a monthly living budget of $4,453, Tiffin is 28.8% cheaper than the average US city.

In terms of living experience, the city offers a rather pleasant and comfortable year-round climate, with the summer’s highest and winter lowest average temperatures reaching 84 °F and 18 °F, respectively. The pleasant weather, topped with scenic lakes and beautiful hiking trails, makes Tiffin an ideal city for retirees looking to enjoy their golden years surrounded by nature. Also, it features a good selection of eatery options and some recreational places like Mckinley Memorial Library and Ritz Theater.

23. Waterloo, Iowa

Monthly living budget: $4,453

Monthly average rent: $940

Next, we have Waterloo, a city in Iowa, which may have faced economic challenges in the past, but currently, has a reasonable cost of living and is a great place for retirees to settle on a budget. Not only does Waterloo have decent healthcare facilities, but the price of medical services there is lower than the national average.

While crime rates vary across the city, there are plenty of good neighborhoods to reside in. Waterloo, Iowa also has plenty of gorgeous parks, cultural events, and museums which contribute to a fulfilling retirement lifestyle.

22. Huntington, West Virginia

Monthly living budget: $4,318

Monthly average rent: $890

Located in the Appalachian region, Huntington, West Virginia, is known for its natural beauty and national parks. The city has moderate levels of crime, providing a generally safe environment for its residents. Similar to Waterloo, Huntington also has a tough economic past but is now going through revitalization efforts to improve its local economy.

There are plenty of outdoor activities available for retirees to enjoy and the Ohio River nearby adds a scenic charm. Unfortunately, Huntington has a high crime rate as well. Nevertheless, it does have a livability score of 51 and is one of the best places in the U.S. for retirees who want to enjoy nature and a low cost of living.

21. Phoenix, Arizona

Monthly living budget: $4,281

Monthly average rent: $1,770

Phoenix, Arizona is 21st on our list of the best places to retire on a monthly budget of $5,000. It blends sunny weather and diverse amenities in one place. If you have a budget of $5000, affording life in Phoenix would not be difficult at all. While the cost of living has risen, it remains reasonable compared to other major cities. The city’s crime rates vary by neighborhood, so it’s best to explore and find the best area for you. Moreover, Phoenix has a warm climate, which is ideal for anyone fond of sunshine and outdoor activities. At the same time, it’s important to note that it tends to be quite hot in the summer, and air conditioning is a must.

20. Leon, Iowa

Monthly living budget: $4,192

Monthly average rent: $720

On number twenty, we have Leon, a small city in the state of Iowa with a population of only over 1,000 people. It is a beautiful city with scenic locations, outdoor recreational opportunities, and a welcoming community. The monthly average rent of this small city is as little as $720 while other monthly expenses can go up to $4,213 only. Leon excels in all the metrics we checked for. It is a safe city with a pleasant weather and strong economy. It also has excellent healthcare, but it is also important to note that it is slightly higher than the national average.

19. Bella Vista, Arkansas

Monthly living budget: $4,143

Monthly average rent: $1,050

With over 56 forest trails and numerous riverside areas, Bella Vista, Arkansas, offers plenty of fun outdoor activities such as biking, hiking, golfing, or boating on Beaver Lake. Located on the Springfield Plateau of the Ozark Mountains, the city of Bella Vista is home to a population of almost 30,000.

Furthermore, Bella Vista has a very low violent and property crime rate, making it a safe and secure haven for residents. The economy of Bella Vista and the healthcare conditions are plausible as well. Overall, Bella Vista, Arkansas is one of the best places in the U.S. to retire on a budget.

18. College Station, Texas

Monthly living budget: $4,112

Monthly average rent: $1,060

From kayaking on Lake Bryan to exploring natural parks with pretty trails, College Station, Texas, is a picture-perfect location for an outdoor enthusiast. It is located in Brazos County, which is the heart of Taxes.

Like most Texas cities, College Station is known for its hot and humid weather. In summer, the temperature usually exceeds 90 °F, while it rarely drops below freezing in winter. But overall, it’s a nice and moderately safe city to retire and comfortably live in if you have a budget of $5000.

17. Temple, Texas

Monthly living budget: $4,102

Monthly average rent: $1,050

Located in Bell County in Texas, Temple is a vibrant city home to around 80,793 people. While the property crime rate is high, the violent crime rate isn’t, which allows for a moderate sense of security for the residents. It does not score extravagantly in the weather index, but it is still an ideal option for people looking for a comfortable and affordable place to retire.

The monthly living budget required to live comfortably in Temple, Texas, is around $4,102, while an average two-bedroom unit will cost $1,050 per month. Retirees may also consider living here as it offers great and affordable healthcare facilities compared to the national average.

16. Clarksburg, West Virginia

Monthly living budget: $4,070

Monthly average rent: $550

Clarksburg, West Virginia has a lower cost of living than the national average, making it a relaxed and affordable option for retirees. While the healthcare facilities are decent in Clarksburg, retirees may need to consider nearby hospitals for specialized services. The local economy has faced challenges, but the community keeps its efforts for improvement ongoing. Also, Clarksburg has some amount of crime, but it is a mostly safe city to live in. The city is smaller in size and has a close-knit community feel to it, providing a great option for those seeking a peaceful and friendly retirement destination.

15. Norman, Oklahoma

Monthly living budget: $4,038

Monthly average rent: $1,020

The third most populous city of Oklahoma, Norman, has a population of 125,745 and a livability score of 52. Costing an average monthly living budget of $4,038 and $1,020 for a monthly rent of a two-bedroom unit, Norman is 11.6% less expensive than the US average.

Other than affordability, Norman, we’ve included it in our list due to its vibrance and the variety of fun activities it offers. Norman is home to several scenic parks like Lake Thunderbird State Park and Lions Park and some great museums like the Sam Noble Oklahoma Museum of Natural History. If you enjoy nature and the outdoors or are someone who loves arts and culture, we definitely suggest considering Norman, Oklahoma. Note that the healthcare is good, but slightly more expensive than the national average.

14. Roanoke, Virginia

Monthly living budget: $4,024

Monthly average rent: $960

Its blend of scenic beauty, affordability, and cultural offerings make Roanoke, Virginia an attractive option for retirees. The cost of living is reasonable, with the monthly living budget being $4,024, allowing retirees to make the most of their retirement income. The healthcare system for this city is moderately good, but also slightly expensive. Moreover, Roanoke is economically diverse and has potential opportunities for part-time work. Not only does Roanoke have a pleasant climate but the Blue Ridge Mountains provide picturesque views too.

As far as the economy, healthcare, and weather go, Roanoke, fortunately, scores well in all these domains. It is slightly unsafe though, so residents are advised to exercise precautions. All in all, Roanoke provides a blend of lifestyle amenities, opportunities for enrichment, and affordable healthcare for individuals seeking a fulfilling retirement.

13. Parma Heights, Ohio

Monthly living budget: $3,978

Monthly average rent: $1,070

Parma Heights, a city in Ohio with low crime rates and excellent healthcare facilities, offers a comfortable environment for retirees. Parma Heights experiences all four seasons, allowing retirees to enjoy multiple weather conditions throughout the year. The local economy in Parma Heights is stable and the community is known for its friendly atmosphere. While it is a quieter suburban setting, Parma Heights offers both cultural and recreational activities in the nearby city.

12. Robstown, Texas

Monthly living budget: $3,974

Monthly average rent: $1,060

Ranking twelve, Robstown, a city in Nueces County, Texas, does not offer an appealing weather condition like many Texas cities. However, if you are planning to spend your golden years in an affordable place, Robstown is worth giving a thought.

On average, a two-bedroom apartment will cost $1,060, while a monthly living budget of $3,974 is required for a comfortable lifestyle in this city. Despite being a small city, Robstown also has good healthcare facilities with plenty of local healthcare providers and a fine economy.

11. Baytown, Texas

Monthly living budget: $3,952

Monthly average rent: $1,160

Located in the southeastern corner of the US, Baytown, Texas, is a vibrant but highly industrialized city with oil refining, chemical, rubber, and carbon black manufacturing activities. With a livability score of 46, Baytown, Texas, is home to 82,543 residents and ranks eleven on our list based on the monthly budget required.

The weather here is not really great, with long stretches of clear skies and stifling humidity that runs most of the year. While the cost of living in Baytown is 3.1% less than the US average, the crime rate, both violent and property theft, is higher than the US average, making it a moderately unsafe place to live. On the upside, it has good health conditions and facilities alongside a stable economy.

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