Retire in Arkansas: Cost, Taxes & FIRE Number for 2026
Retiring in Arkansas costs about $46,200 a year on average, earning a B retirement tax grade and a #45 healthcare ranking. Here's the full breakdown — cost, taxes, and how much you actually need saved.
What It Costs to Retire in Arkansas
The average retiree in Arkansas spends about $46,200 a year ($3,850/month), based on BLS spending data for households 65 and older, adjusted for Arkansas's cost of living. That works out to a standard retirement number of $1,155,000 under the 4% rule, or $1.32M for early retirees using the more conservative 3.5% FIRE withdrawal rate.
How the numbers below are calculated:
Annual cost = BLS Consumer Expenditure Survey 2024 (65+ household spending) × Arkansas's cost-of-living index (MERIC Q3 2025).
Standard Retirement Number = Annual Cost ÷ 0.04 (4% rule, ~30-year horizon)
FIRE Number = Annual Cost ÷ 0.035 (3.5% rule, 40–50+ year horizon for early retirees)
Arkansas earns a B retirement tax grade from Plootus Research and ranks #45 of 50 states for healthcare quality. Combined with an average annual salary of $51,030 for working residents (median $42,060), that gives a fuller picture of what building — and eventually spending down — a nest egg looks like here.
Arkansas Retirement Snapshot
| Metric | Arkansas |
|---|---|
| Average annual retirement cost | $46,200/yr |
| Average monthly retirement cost | $3,850/mo |
| Standard retirement number (4% rule) | $1,155,000 |
| FIRE number (3.5% rule) | $1.32M |
| Retirement tax grade | B |
| State income tax | 4.4% max |
| Social Security tax | ✅ No tax |
| Healthcare quality rank | #45 of 50 |
| FIRE-friendliness rating | ★★★★☆ |
| Average annual salary (working residents) | $51,030 |
| Median annual salary (working residents) | $42,060 |
Sources: BLS CES 2024 (65+); MERIC Q3 2025; BLS OEWS May 2024; Plootus Research 2026.
Your Arkansas-Adjusted Retirement Number
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How Arkansas Compares to Nearby States
| State | Annual Cost | Retirement Number | Tax Grade | HC Rank |
|---|---|---|---|---|
| Arkansas (this page) | $46,200 | $1,155,000 | B | #45 |
| Alabama | $46,500 | $1,162,500 | A | #48 |
| Mississippi | $45,600 | $1,140,000 | B- | #49 |
| Kentucky | $47,000 | $1,175,000 | B- | #47 |
→ Run a full side-by-side comparison in the State Comparison Tool
How Arkansas Treats Retirees on Taxes and Healthcare
Arkansas carries a B retirement tax grade from Plootus Research — an above-average, generally tax-friendly state for retirees.
State Income Tax
Arkansas's state income tax tops out at 4.4% max. Check current brackets and any retirement-income deductions before you file.
Social Security Tax
Arkansas does not tax Social Security benefits, one of the factors behind its B tax grade.
Arkansas ranks #45 nationally for healthcare quality — one of the lower-ranked states, so it's worth researching specific providers and hospital systems before committing.
Frequently Asked Questions
Arkansas earns a B retirement tax grade and ranks #45 of 50 for healthcare quality. Average annual retirement spending runs about $46,200, requiring roughly $1,155,000 in savings under the standard 4% withdrawal rule. Whether it's a good fit depends on your priorities — Arkansas's state income tax is 4.4% max, and it does not tax Social Security.
Arkansas does not tax Social Security benefits, one of the factors behind its B tax grade. Confirm current thresholds and exemptions with a tax professional, since rules change year to year.
Using the standard 4% rule, retiring in Arkansas on its average annual cost of $46,200 requires approximately $1,155,000 in savings. That figure excludes Social Security, which most retirees layer on top to reduce the amount they need from their own portfolio.
At a 3.5% safe withdrawal rate — the more conservative rate recommended for early retirees facing a 40–50+ year horizon — Arkansas's FIRE number is approximately $1.32M, based on its $46,200/year average cost. Early retirees should also budget separately for healthcare before Medicare eligibility at 65.
- Bureau of Labor Statistics, Consumer Expenditure Survey 2024 (65+ age group)
- Missouri Economic Research and Information Center (MERIC), Cost of Living Index Q3 2025
- Bureau of Labor Statistics, Occupational Employment and Wage Statistics (OEWS) May 2024
- Kiplinger, Retirement Taxes 2026; WalletHub Best States to Retire 2026
- Plootus Research 2026 (tax grades, healthcare rank, FIRE ratings)
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