#Southern #State #Retirees #Seeking #Affordable #Housing
Thanks to its proximity to nature, affordable housing costs, and below-average income tax, Hot Springs, Arkansas has earned its place on Investopedia and Southern Living’s list of the most affordable Southern places to retire. In fact, this was our top pick based on our team’s research, which measured several affordability and overall lifestyle factors.
Although it’s a hidden city, Hot Springs is definitely worth exploring if you’re looking for a place to settle down after retirement. One big reason: Hot Springs is an affordable place to live. According to the Chamber of Commerce, the cost of living in Hot Springs overall is 14.82% lower than the national average. What’s more, our research found that its average housing costs are the lowest in the South.
Key takeaways
- Hot Springs has average housing costs 30% lower than the South overall.
- There are no state property taxes in Arkansas, which contributes to lower housing expenses for homeowners.
- Although Arkansas has a state income tax, its top rate is lower than in many states, which may help keep more money in your pocket if you choose to work during retirement.
- Hot Springs is a mid-sized city with a population of 37,930, which is growing in age – nearly one in five (22.7%) of the city’s residents is 65 or older.
- Other reasons that make Hot Springs attractive are its natural beauty and access to good health care.
The cost of living is below average
From an affordability standpoint, one of the key data that makes Hot Springs stand out is its average housing costs. The average cost for Hot Springs residents is $810 per month, which is 30% less than the average cost of $1,163 across the South.
If you are a new home buyer, the median home sale price in Hot Springs was $340,000 as of October 2024. Renters can find affordable options as well, with some listings going up to $500, making it attractive to both renters and buyers who may be moving from areas with higher costs of living.
Why this is the key to an affordable retirement
Living on a fixed income in retirement means there is a finite amount of money you have to fall back on, and it must last throughout your life. Choosing to live in an area with a lower cost of living can help you make the most of your limited resources. It can also allow you to allocate more of your budget to fun activities that you were looking forward to once you stopped working.
Housing costs tend to play the largest role in the cost of living. The Center for Retirement Research at Boston College reports that it typically makes up about 40% of most households’ budgets. For this reason, if you choose to live in an area with lower housing costs, such as Hot Springs, it can provide more flexibility in your budget and lifestyle.
Investopedia knows that the concept of “affordability” is relative. What is affordable for one person, may be expensive for another person. In this article, this phrase aims to explain the financial importance of various living expenses so you can plan for a retirement you can afford.
There are no state property taxes
Not only are the housing costs themselves lower, but Arkansas has no property tax. Residents should still expect to pay county property taxes, which average about $859 per year, based on the average home sale price.
At the state level, Arkansas’ average property tax per capita, at $776, is the third lowest per capita in the country, behind Alabama ($598) and Oklahoma ($771). Compared to the national average of $1,675 for state and local property taxes per capita across the country, Hot Springs property owners are getting a bargain.
Why this is the key to an affordable retirement
Anytime a recurring bill like property taxes is below average, it allows your money to go further in retirement. That’s why people who live in areas with high property taxes like the Northeast or West Coast during their working years often migrate south once they get closer to retirement.
important
Moving to a state like Arkansas that has no state property taxes can literally save thousands of dollars a year.
Income tax is below average
When you have a fixed income, such as a pension, the last thing you want is for a significant portion of it to go towards income taxes. Arkansas is one of 29 states with a graduated state individual income tax, with rates ranging from 2.00% to 4.40%. Even if you earn enough to pay the top rate, it is still lower than many states. By contrast, the highest rate is 13.3% in California.
Of course, there are a few states that have no income tax at all or have slightly lower rates, but Arkansas is still on the lower end.
Why this is the key to an affordable retirement
You may hear people discuss trying to retire in a “tax-friendly” or “pension-friendly” state, and what they’re really talking about is income tax. As mentioned, Arkansas is not necessarily the best in this regard because it has an income tax, but it is on the lower side compared to some locations.
This may not be the only factor you look at when crunching your retirement budget numbers, but as part of your overall analysis, income tax should be something you consider.
Other amazing perks in Hot Springs, Arkansas for retirees
Hot Springs is known as the “Spa City” for its therapeutic thermal waters, springs, and spa offerings. Due to its beauty and hot thermal springs, Hot Springs National Park was also the country’s first federally protected area, designated in 1832. For retirees with active lifestyles, it’s great to have “The American Spa” so close to home.
Whether you enjoy biking, fishing, golfing, or hiking, there is plenty of things you can do outdoors to keep you active and social. Hot Springs also hosts several music and film festivals.
Note
Retirees can also feel confident that their healthcare needs will be met as Hot Springs has two acute care hospitals and a large number of health and wellness facilities.
Bottom line
Hot Springs, Arkansas may not immediately come to mind when you think of retirement destinations, but it has several key features that retirees look for. First of all, it is very affordable thanks to below-average housing costs, lack of state property taxes, and lower-than-average state income taxes.
But in addition to the cost savings, the spa town lives up to its name with its natural hot springs. Add to that its mild climate, fishing and boating lakes, excellent hospitals, and beautiful scenery, and you can see why it might be the perfect place to live out your golden years.
methodology
Places selected for 2024 Best Places to Retire in the South The list was selected from all census-designated places in the Southern states (Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia). Median household income and monthly housing cost estimates were collected from the 2022 American Community Survey (5-year period) for each place in the South. Places whose estimates included large margins of error were removed from the initial list.
The final list of venues was selected through an evaluation of:
- Housing affordability compared to the South (how monthly housing costs for each place compare to the weighted average of states in the South);
- Average income everywhere (as a proxy for taxes collected, which may be related to community resources; and
- Individual reports on proximity to parks or coastlines, recent changes in the community, and past reports from Southern Living highlighting the best places to retire.
#Southern #State #Retirees #Seeking #Affordable #Housing
