Retirement Cost of Living in Alabama

Thanks to a low tax burden and some of the lowest home prices in the United States, Alabama is a very affordable place to retire. It also features mild weather throughout the year, access to beaches with white sand and calm waters along with a warm and bucolic country feel inland, not to mention some excellent golf. As such, it is becoming more popular with migrating retirees with each passing year.

"Our beaches are as beautiful as you'll find barring maybe the Caribbean," Fergus Tuohy, an Ameriprise Financial advisor based in Birmingham, Alabama, told MarketWatch. "It's not like in south Florida where it's sweltering most of the time."

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Alabama also features an overall cost of living that is around 12 percent below the national average. While it is certainly more expensive to retire in popular beach communities like Gulf Shores than say an inland town or city, it is still cheaper to retire on a beach in Alabama than in Florida or California. According to MarketWatch, "Even living along the coastline is reasonable. Gulf Shores costs 11.2 percent more than average to live in compared to 36.4 percent for Boca Raton [Florida] and 121.7 percent for Santa Barbara [California]."

Income taxes are also low in Alabama, at just 5 percent and Social Security and pension income is tax exempt. There is also no estate tax in Alabama and homeowners more than 65 years old don't pay property taxes, which really helps when you are on a fixed income.

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While no one likes to think about the final stages of life, when planning for the inevitable, the cost of nursing homes and assisted living facilities is much less in Alabama than in other states. In Alabama, a private room in a nursing home "costs $186 per day, compared to $239 for the nation as a whole; and $2,694 per month for assisted living, compared to $3,477 for the rest of the country," according to the MetLife Mature Market Institute.

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