Most affordable U.S. cities for working adults and retirees

Discover the U.S. cities offering ample jobs, affordable living, and scenic surroundings

With prices and interest rates on the rise, many Americans are considering ways they can make the most of their paychecks and savings to cover expenses – and enjoy the good life.

For working adults and retirees looking to navigate rising costs and fight the stress of inflation, we set out to find the most affordable U.S. cities. To create our rankings, we analyzed 113 U.S. cities across multiple categories. We also surveyed 1,000 Americans about where they want to live and what criteria they look for when deciding where to call home.

Most affordable U.S. cities for working adults

To identify the most affordable U.S. cities for people still in their working years, we collected data on home prices, average income, cost of living, and employment rates across 113 cities. We then scored each city based on their statistics and created a ranking of most to least affordable.

Based on our analysis, the most affordable U.S. city for working adults was Sioux Falls, SD. Split by the Big Sioux River and home to stunning Falls Park, Sioux Falls is a big city with a small-town feel. Sioux Falls has many fun attractions, including a zoo and aquarium, but it’s best known for its abundance of walking, hiking, and biking trails.

The second most affordable city on our list was Springfield, IL. Springfield boasts an impressive number of museums, memorials, and historical sites, including the long-time home of Abraham Lincoln and isa short drive to the bustling city of St. Louis, MO.

Rounding out the top three is Wichita, KS. Wichita is considered a fantastic city for families, with dozens of unique museums and parks. While the landscape might be flat, the Big and Little Arkansas Rivers add plenty of natural beauty to Wichita’s surroundings.

Other cities among the top 10 most affordable for working adults included Virginia Beach, VA; Des Moines, IA; and Oklahoma City, OK. The Cornhusker State was the only state with two cities in the top 10: Lincoln and Omaha.

Where working adults want to live

Of course, affordability is not the only criteria when deciding where to live. We asked 800 working adults about what they look for in a city and where they want to live the most. How do the priorities and desires of workers match up with our affordability rankings?

Cost of living (55%) was the highest priority for working adults when choosing where to live; a low cost of living can help people save more and build up their nest egg. Being close to family (30%), safety (28%), and employment opportunities (27%) were also top priorities for this group.

As for dream living locations, Denver (17%) was the most desired place to live, followed by San Diego (16%) and New York City (15%). The Mile High City landed at No. 66 on the affordable cities ranking third for employment rates and eighth for income but dropped to No. 98 for cost of living and No. 102 for home prices.

San Diego ranked No. 105 on the list, mainly due to its high cost of living (No. 107) and home prices (No. 108). As for New York City, it’s considered one of the most expensive cities in the world, and with soaring rent costs, home prices, and cost of living the Big Apple didn’t make it to list of most affordable.

Most affordable U.S. cities for retirees

To identify the most affordable U.S. cities for retirees, we collected data on tax friendliness, healthcare access and quality, home prices, cost of living, and average yearly sunshine.

Where you live during retirement can significantly impact your spending abilities and how long your savings last. Based on our analysis, Las Vegas, NV, was the most affordable U.S. city for retirees. For those looking for their daily dose of Vitamin D, Sin City ranked second for average yearly sunshine, and proved very tax-friendly, with no state income tax, and no estate or inheritance taxes. Additionally, Las Vegas has a thriving senior community and plenty of entertainment options.

The second most affordable U.S. city for retirees was Pittsburgh, PA, ranking fifth for healthcare access and quality. Home of the University of Pittsburgh Medical Center, West Penn Alleghany Health System, Alleghany Health Network, and two major VA hospitals, retirees will live close to top doctors for general care and specialized health concerns. Pennsylvania doesn’t tax retirement benefits but has death taxes that may cut into any inheritance left behind.

Rounding out the top three most affordable cities for retirees is Sioux Falls, SD, which also happened to clinch the No. 1 spot for most affordable cities for working adults. Sioux Falls ranked middle-of-the-pack for most categories, has no state income tax, relatively low property taxes, and no estate or inheritance tax. Sioux Falls also has excellent air quality and lots of natural beauty.

Other top ranking cities included Detroit, MI; Philadelphia, PA; and Tallahassee, FL. Nevada, Pennsylvania, Michigan, and Florida all had two cities make the top 10, proving them to be retirement-friendly states overall.

Where retirees want to live

Retirees often dream about where they’ll retire for years before the end of their careers. What do they look for most, and what are their dream retirement destinations?

Retirees responded similarly to working adults when asked what qualities they desire in a city. Cost of living (46%) is the top priority for those surveyed, followed by closeness to family (36%) and safety (34%). However, retirees were more concerned about the weather (33%) and less concerned about employment opportunities.

As for where retirees hoped to live, San Diego, CA (19%), was the No. 1 choice, followed by Virginia Beach, VA (12%), and Charlotte, NC (12%). San Diego proved to be just as expensive for retirees as it did for working adults, landing at No. 107 out of 112 total cities. San Diego has high home prices and cost of living, and California taxes retirement account withdrawals. Charlotte ranks at No. 76 and Virginia Beach ranked in the top 20 most affordable cities for retirees. The coastal Virginia town was No. 14 for healthcare access and quality, with a bustling senior scene, and many 55+ retirement communities.

Most affordable vs. most desirable cities

No matter what stage of life you’re in, choosing where you live is a big decision. Planning for retirement early and implementing smart saving and investing methods can help you be more prepared for the future. And with enough set aside, retiring in the place of your dreams is even more likely.

Methodology

For this report, we created two meta-rankings, one to identify the most affordable cities for working adults and the other to identify the most affordable cities for retirees.

The working adults ranking was based on the following variables and weights:

• Home Affordability (30%), based on median rent prices (Zumper) and median home prices (Realtor.com)
• Income (30%), based on average income of residents (BLS)
• Cost of living (25%), based on relative index on cost of living (AdvisorSmith)
• Labor force participation (15%), based on percentage of employed residents (BLS)

The retirees ranking was based on the following variables and weights:

• Tax Friendliness (30%), based on retirees’ tax laws (SmartAsset)
• Healthcare Quality and Access (25%), based on state ranking of healthcare quality and access (USNews)
• Home Affordability (20%), based on median rent prices (Zumper) and median home prices (Realtor.com)
• Cost of living (15%), based on relative index on cost of living (AdvisorSmith)
• Sunshine Percentage (10%), based on percentage of days per year with sunshine (CurrentResults)

This report also included a survey of 800 U.S. workers and 200 U.S. retirees to gather their perspectives on the best cities to live in and what qualities make those cities the most appealing. It was conducted in July 2023 by Fractl on behalf of Empower.

About Empower

Empower is a financial services company on a mission to empower financial freedom for all. We offer investment, wealth management, and retirement solutions for individuals and all sizes of organizations. Connect with us on empower.com.

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