Retire in Mississippi: Cost, Taxes & FIRE Number for 2026
Mississippi is one of the most affordable states to retire in, with a $45,600 average annual cost and a B- tax grade — but its #49 of 50 healthcare ranking is a critical trade-off retirees must evaluate carefully.
What It Costs to Retire in Mississippi
The average retiree in Mississippi spends about $45,600 a year ($3,800/month), based on BLS spending data for households 65 and older, adjusted for Mississippi's cost of living — the lowest in the nation. That works out to a standard retirement number of $1,140,000 under the 4% rule, or $1.3M for early retirees using the more conservative 3.5% FIRE withdrawal rate.
Mississippi earns a B- retirement tax grade from Plootus Research. The state's 4% flat income tax is modest, and — critically — most retirement income including pensions, 401(k) distributions, and IRA withdrawals is exempt from state income tax. Social Security benefits are also fully exempt. This makes Mississippi's effective tax burden on retirement income one of the lowest in the South.
The major concern for retirees in Mississippi is healthcare: the state ranks #49 of 50 nationally. Physician shortages, limited rural hospital capacity, and lower health outcomes are persistent challenges. Retirees in good health who are primarily motivated by affordability may find Mississippi compelling, but those with significant healthcare needs should evaluate access carefully.
Mississippi Retirement at a Glance
| Annual Retirement Cost | $45,600 ($3,800/mo) |
| Standard Retirement Number (4% rule) | $1,140,000 |
| FIRE Number (3.5% SWR) | $1,302,857 |
| Retirement Tax Grade | B- |
| State Income Tax | 4% flat |
| Social Security Tax | No tax |
| Healthcare Rank | #49 of 50 |
| Avg. Household Income | $53,940 |
| Median Household Income | $44,820 |
| Overall Retirement Rating | ★★★★☆ |
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Mississippi vs. Nearby States
| State | Tax Grade | HC Rank | Annual Cost |
|---|---|---|---|
| Mississippi | B- | #49 | $45,600 |
| Arkansas | B | #45 | $46,200 |
| Alabama | A | #48 | $46,500 |
| Kentucky | B- | #47 | $47,000 |
Mississippi Retirement Tax Overview
State Income Tax
Mississippi's 4% flat income tax rate is among the lower rates nationally, and the state broadly exempts most retirement income — including pensions, 401(k) distributions, and IRA withdrawals — from taxation. This means the effective state income tax on retirement income is very low for most Mississippi retirees, despite the existence of a state income tax.
Social Security Tax
Mississippi does not tax Social Security benefits. Combined with the broad exemptions on retirement account withdrawals and pension income, Mississippi has one of the most retiree-friendly overall tax structures in the South — a meaningful advantage for income-sensitive retirees seeking to minimize their state tax burden.
Healthcare in Retirement in Mississippi
Mississippi ranks #49 of 50 nationally for healthcare quality — the second-lowest ranking in the country. The state faces significant structural challenges including persistent physician shortages, limited hospital capacity in rural areas, and well-documented gaps in health outcomes across multiple indicators. Jackson-area medical facilities, including the University of Mississippi Medical Center, provide the highest quality care in the state.
HC Rank #49: Mississippi's near-bottom healthcare ranking is a critical consideration for retirees. Access to specialists, quality hospital systems, and routine preventive care can be significantly more difficult — especially outside major population centers like Jackson or Gulfport. Retirees with chronic conditions or anticipated healthcare needs should carefully evaluate whether Mississippi's affordable cost of living outweighs the healthcare access trade-off.
Frequently Asked Questions: Retiring in Mississippi
Mississippi earns a B- retirement tax grade and is one of the most affordable states to retire in, with average annual retirement spending of just $45,600 — requiring roughly $1,140,000 in savings under the standard 4% rule. The trade-off is a #49 of 50 healthcare ranking, which is the most significant concern for retirees who prioritize medical access and quality of care.
Mississippi does not tax Social Security benefits. In fact, Mississippi has one of the more retiree-friendly tax structures in the South — the state also exempts most retirement income including pensions and 401(k)/IRA distributions from the 4% state income tax, making the effective tax burden on retirement income very low for most retirees.
Using the standard 4% rule, retiring in Mississippi on its average annual cost of $45,600 requires approximately $1,140,000 in savings. Mississippi has the lowest cost of living among all 50 states, making it one of the most accessible retirement destinations from a pure savings standpoint — though healthcare quality is a major trade-off.
At a 3.5% safe withdrawal rate — the more conservative rate recommended for early retirees facing a 40–50+ year horizon — Mississippi's FIRE number is approximately $1.3M, based on its $45,600/year average cost. The low FIRE number is one of Mississippi's standout retirement advantages, though early retirees must plan carefully for healthcare access before Medicare at 65.
Mississippi ranks #49 of 50 nationally for healthcare quality — one of the lowest rankings in the country. The state faces well-documented challenges including physician shortages, limited hospital capacity in rural areas, and lower health outcomes across multiple metrics. Retirees with significant healthcare needs should carefully evaluate healthcare access before choosing Mississippi as a retirement destination.
Sources
- Plootus Research Team, 2026 State Retirement Cost Analysis
- U.S. Bureau of Economic Analysis — Regional Price Parities
- Mississippi Department of Revenue — Income Tax Guide
- Commonwealth Fund — State Healthcare Rankings 2025
- U.S. Census Bureau — American Community Survey
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