Our retirement budget is $38,000 a year so we can’t afford to stay in California—where should we move? Where Should I Retire?

By Silvia Ascarelli

Hello,

I am hoping for suggestions on where my husband and I could afford to live on our $38,000 annual budget. He is 71, disabled and receives Social Security. I am 64. We are looking for a more friendly retirement state with lower taxes and a lower cost of living.

I have recently retired from a job with the state of California and get a pension. However, after six months of retirement, I am ready to re-enter the workforce. Even though our budget will be more in the future, I would like a place that we can afford on our current budget.

Thank you,

Derinda

Dear Derinda,

I’ve got some good news for you: most states don’t tax Social Security checks . Depending on how the state treats your pension income, that may be tax-free too. Or you may just pay a small amount — even in California. (I used this retirement tax calculator from Smart Asset , but you should verify your numbers with a tax pro.)

There are always other taxes, though, starting with sales taxes. And city services, from road repairs to senior centers and parks, need to be funded somehow.

You didn’t indicate any preference for where in the country you’d like to live. Given your husband’s disability, easy access to medical care may be even more important than it is for other retirees. I also looked for a place on solid economic footing so that you’ll have an easier time finding a job.

I budgeted for rent of $1,000 or less a month, which ruled out areas where home prices (and rents) have skyrocketed in the wake of COVID-19. That put my focus on the center of the country, though you can also find affordable options in the South. If you want to stay west, would you consider Spokane, suggested here ?

Of course you may be comfortable spending more on housing.

One additional tip: using a site like Realtor.com (which like MarketWatch is owned by News Corp.), start with one community, set your rent and bedroom parameters, and then zoom out and scroll. You’ll see where you can find rentals that meet your criteria. The same approach works for prospective buyers. Then you can do your research about the city or town.

Read: There is more to picking a place to retire than low taxes—avoid these 5 expensive mistakes

Finally, before you make a move, please think about how you’ll build a new network of friends. Those social connections are so important to our happiness, as this person found . Do test out your shortlist with short-term rentals, living as a local, not as a tourist, to see if what sounds good on paper is in fact a good fit in real life.

Here are three suggestions to get you started. I hate to repeat myself, so you’ll find more suggestions in all the other “Where Should I Retire?” columns .

Owensboro, Kentucky

This city of 60,000 along the Ohio River in western Kentucky comes with a low cost of living—and a big music scene.

Start with Friday After 5 —that’s free concerts at five venues along the Ohio River every Friday from Memorial Day to Labor Day. Then there is the Nashville Songwriters Series every other Thursday featuring Nashville artists; admission is only $10. (Nashville is less than two hours away.) And many local restaurants have music offerings, too.

Owensboro also is the birthplace of bluegrass and home to the National Bluegrass Hall of Fame and Museum . I’m told contemporary strains of bluegrass are far from the stereotype of an old guy with a banjo.

You’re not into bluegrass and country? Check out RiverPark Center , the performing arts center that brings in traveling Broadway shows and other events. Or wander through the Western Kentucky Botanical Garden .

The cost of living in Daviess County is about 12% below the national average. The transit system has multiple bus routes, and fares for those 60 and older or disabled are just 50 cents. Your local hospital is the 477-bed Owensboro Health Regional Hospital .

Average winter highs are in the 40s; in the summer, the average high is around 90. You’ll also average about 10 inches of snow a year.

Take a look at the rental market here . The median list price for a home in June 2022 was $208,750, according to Realtor.com. Here’s what’s for sale right now .