9. Iowa
Cost of living: 12 percent below U.S. average
Population: 3.1 million
Best city: Iowa City
PRO: Iowa has no state income tax on Social Security as well as state income tax-breaks for pension income. Iowa City is also home to a famous university and a vibrant cultural scene with a great atmosphere and was even designated “City of Literature” by UNESCO.
9. Iowa
CON: Even though there is no tax on Social Security benefits in Iowa, retirement income could be taxed by up to nearly 9 percent. Nevertheless, those over 55 can have up to $6,000 excluded from tax as retirement income.
NEXT: This is the state that introduced the tradition of Mardi Gras to the rest of the Western World.
8. Alabama
Cost of living: 13 percent below U.S. average
Population: 4.8 million
Best city: Orange Beach
PRO: Alabama, otherwise known as the Heart of Dixie is very budget-friendly. The average retired couple here spend 4.4 percent less than the those elsewhere in the U.S. on healthcare, Social Security benefits are exempt from tax, and incomes are only taxed at 2 to 5 percent.
8. Alabama
CON: Spring and November are known here for the intense storms which can occur, and like most southern states, Alabama can get seriously hot during the summer.
NEXT: There is a 16,750-pound ball of twine located in this state.
