If your Social Security and other retirement savings allow you to retire with $5,000 per month, you may be on track to enjoy a wonderful and comfortable retirement. Outside the most expensive parts of the United States, $5,000 per month is typically enough to cover rent or mortgage payments and other lifestyle expenses if you're mindful of your budget.
For those wondering where $5,000 per month can offer a desirable combination of affordability, comfortable climate and retiree-friendly activities, we've scoured the cost of living and other data to zero in on the best places to retire on $5,000 per month. Here's our list of the top five cities to retire on a monthly retirement budget of $5,000.
The Best Places To Retire on $5,000 Per Month
- • Best for Amazing History and Culture: New Orleans, Louisiana
- • Best for a Well-Rounded Lifestyle: Nashville, Tennessee
- • Best for Stretching Your Dollars: Indianapolis, Indiana
- • Best for Living the Ultimate Retirement Lifestyle: The Villages, Florida
- • Best for Warm Weather and Beach Access All Year: San Jose, Puerto Rico
1. For Amazing History and Culture: New Orleans, Louisiana
- • Cost of living: 12% above the national average1
- • Median home price: $647,0601
- • Median monthly rent: $1,9671
- • Metro population: 1,246,1762
- • State taxes: Social Security is not taxable; low state tax rate on other income3
Why retire in New Orleans?
New Orleans combines a generally warm and comfortable climate year-round with some of the best history and culture you'll find nationwide. If you can handle an occasional hurricane, you'll likely love the food scene, jazz music, architecture and other activities that draw in more than 17 million tourists annually.4
The median rent in New Orleans is just under $2,000 per month, leaving a retiree with a $5,000 monthly budget with an additional $3,000 for other bills, plus cash for travel and exploring New Orleans and the nearby region.1 While it's a little more than the national average cost of living, that's mostly driven by housing costs. If you can find an affordable home, you'll save money on other expenses compared to the average U.S. city.
2. For a Well-Rounded Lifestyle: Nashville, Tennessee
- • Cost of living: 2% lower than the national average5
- • Median home price: $478,4195
- • Median monthly rent: $1,4555
- • Metro population: 2,046,8282
- • State taxes: No state income tax3
Why retire in Nashville?
Home to famous music venues and a bustling tourist-focused downtown, Nashville offers live music nearly 24/7. It has also been a popular city for new residents in recent years, partially due to a reasonable cost of living and a fairly mild climate. With all these benefits, you may want to consider calling Nashville home.
Housing costs are a little higher than the national average, but most other important costs come in lower. If you can afford a home that meets your needs in this city of more than two million residents, you'll have access to a wonderful lifestyle in one of the fastest-growing regions nationwide.6
3. For Stretching Your Dollars: Indianapolis, Indiana
- • Cost of living: 7% lower than the national average7
- • Median home price: $373,3567
- • Median monthly rent: $1,1357
- • Metro population: 2,141,7792
- • State taxes: Social Security is not taxable; low flat tax rate on other income3
Why retire in Indianapolis?
Indiana ranks as one of the more affordable states in the country, and the cost of living in Indianapolis is 7% below the national average. Housing is a major factor, with a median rent of a little more than $1,000 per month.7 A $5,000 monthly budget leaves plenty of cash for travel, hobbies and family activities.
The city is also home to lots of cultural attractions, including art museums, theaters, a zoo and plenty of public parks. It's also home to the annual Indy 500, a must-visit for racing fans. While winters can get cool, other seasons are temperate, giving residents plenty of time to enjoy the outdoors. Indianapolis is also centrally located—with relatively short drives to Chicago, Detroit, Columbus and Cleveland, you'll have easy access to other metro areas that offer plenty to see and do.
MORE PLACES TO RETIRE FOR: $1,500, $3,000, $4,000 or $6,000 per month
4. For Living the Ultimate Retirement Lifestyle: The Villages, Florida
- • Cost of living: 3.6% above the national average8
- • Median home price: $370,0009
- • Median monthly rent: $2,50010
- • Metro population: 144,9702
- • State taxes: No state income tax3
Why retire in The Villages?
The Villages is perhaps the most famous retirement spot in the United States, earning national attention for its all-inclusive lifestyle for retirees. The Villages is a multi-neighborhood community focused exclusively on adults 55 and older. It sports a variety of restaurants, three themed downtowns, a hospital, more than 3,000 clubs and resident groups, more than 50 golf courses, on-site fishing, more than 230 pickleball courts and beach access about 40 miles away.11
While the United States is home to many retirement communities, The Villages is unique in its size and scope. Though housing costs have increased dramatically over the last year, The Villages remains reasonably priced overall, at 3.6% above the national average.8 And there's no state income tax, so your dollars will likely go further than in many other states.3 Even if housing eats up most of your $5,000 monthly retirement budget, having so many amenities a short walk or drive away means you'll hardly have to leave.
5. For Warm Weather and Beach Access All Year: San Juan, Puerto Rico
- • Cost of living: 22% lower than the national average12
- • Median home price: $164,20013
- • Median monthly rent: $57513
- • Metro population: 333,00513
- • Taxes: 0% to 33% based on income14
Why retire in San Juan?
If you want the best of the U.S. and Latin American living in one package, consider Puerto Rico as your retirement destination. While Puerto Rico is technically part of the United States, there's no federal income tax.15 And when you consider that the typical cost of living is lower than in many metro areas on the mainland, Puerto Rico becomes even more attractive.
Puerto Rico's tropical climate makes it warm and sunny most of the year, though occasional hurricanes can be a major detriment. In San Juan, the beach is just around the corner, as is a bustling Old Town, plenty of restaurants, amazing outdoor activity options and a warm and wonderful culture. In San Juan, you'll feel like you're living on vacation, which isn't a bad way to live.
Can You Really Retire on $5,000 Per Month?
With $5,000 per month in retirement, you can afford to live in many locations, coast to coast and beyond. As long as you pay close attention to your savings and stick to a reasonable budget, you can turn that $5,000 monthly retirement budget into a dream lifestyle for your golden years.
Eric Rosenberg is a financial writer, speaker and consultant based in Ventura, California. He is an expert in banking, credit cards, investing, cryptocurrency, insurance, real estate, business finance and financial fraud and security. His work has appeared in many online publications, including Time, USA Today, Forbes, Business Insider, NerdWallet, Investopedia and U.S. News & World Report. Connect with him and learn more at EricRosenberg.com.
READ MORE: 10 Questions to Help Accurately Calculate Your Retirement Numbers
Sources/references
1. https://www.payscale.com/cost-of-living-calculator/Louisiana-New-Orleans
2. https://www2.census.gov/programs-surveys/popest/datasets/2020-2022/metro/totals/cbsa-est2022.csv
3. https://www.kiplinger.com/retirement/602202/taxes-in-retirement-how-all-50-states-tax-retirees
4. https://www.bizneworleans.com/tourism-is-economic-development/
5. https://www.payscale.com/cost-of-living-calculator/Tennessee-Nashville
6. https://www.census.gov/newsroom/press-releases/2024/subcounty-population-estimates.html
7. https://www.payscale.com/cost-of-living-calculator/Indiana-Indianapolis
8. https://www.salary.com/research/cost-of-living/the-villages-fl
9. https://www.redfin.com/city/25985/FL/The-Villages/housing-market
10. https://www.zumper.com/rent-research/the-villages-fl
11. https://www.thevillages.com/faq
12. https://www.mylifeelsewhere.com/cost-of-living/united-states/puerto-rico
14. https://taxsummaries.pwc.com/puerto-rico/individual/taxes-on-personal-income
