Retire in Texas: Cost, Taxes & FIRE Number for 2026
Retiring in Texas costs about $57,500 a year on average, earning an A retirement tax grade and a #30 healthcare ranking. Here's the full breakdown — cost, taxes, and how much you actually need saved.
What It Costs to Retire in Texas
The average retiree in Texas spends about $57,500 a year ($4,792/month), based on BLS spending data for households 65 and older, adjusted for Texas's cost of living. That works out to a standard retirement number of $1,437,500 under the 4% rule, or $1.64M 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) × Texas'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)
Texas earns an A retirement tax grade from Plootus Research and ranks #30 of 50 states for healthcare quality. Combined with an average annual salary of $63,760 for working residents (median $52,980), that gives a fuller picture of what building — and eventually spending down — a nest egg looks like here.
Texas Retirement at a Glance
| Average annual retirement cost | $57,500/yr ($4,792/mo) |
| Standard Retirement Number (4% rule) | $1,437,500 |
| FIRE Number (3.5% SWR) | $1.64M |
| Retirement Tax Grade | A |
| State Income Tax | None |
| Social Security Tax | ✅ No tax |
| Healthcare Quality Rank | #30 of 50 |
| FIRE-Friendliness Rating | ★★★★☆ |
| Avg. Annual Salary (working residents) | $63,760 |
| Median Annual Salary (working residents) | $52,980 |
Sources: BLS CES 2024 (65+); MERIC Q3 2025; BLS OEWS May 2024; Plootus Research 2026.
Your Texas-Adjusted Retirement Number
Pre-filled with Texas's average retirement spending — adjust for your own situation.
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How Texas Compares to Nearby States
| State | Annual Cost | Retirement Number | Tax Grade | HC Rank |
|---|---|---|---|---|
| Texas | $57,500 | $1,437,500 | A | #30 |
| Arizona | $55,500 | $1,387,500 | B+ | #29 |
| Nevada | $55,000 | $1,375,000 | A | #39 |
| New Mexico | $51,500 | $1,287,500 | C | #42 |
How Texas Treats Retirees on Taxes and Healthcare
Texas carries an A retirement tax grade from Plootus Research — one of the most tax-friendly states in the country for retirees.
State Income Tax
Texas has no state income tax at all, so wages, pensions, Social Security, and retirement account withdrawals aren't taxed at the state level.
Social Security Tax
Texas does not tax Social Security benefits, one of the factors behind its A tax grade. Confirm current rules with a tax professional as exemptions can vary.
Texas ranks #30 nationally for healthcare quality — solidly mid-pack, worth researching specific providers and hospital systems in your target city.
Frequently Asked Questions: Retiring in Texas
Texas earns an A retirement tax grade and ranks #30 of 50 for healthcare quality. Average annual retirement spending runs about $57,500, requiring roughly $1,437,500 in savings under the standard 4% withdrawal rule. Whether it's a good fit depends on your priorities — Texas has no state income tax, and it does not tax Social Security.
Texas does not tax Social Security benefits, one of the factors behind its A tax grade. Confirm current thresholds and exemptions with a tax professional, since rules change year to year.
Using the standard 4% rule, retiring in Texas on its average annual cost of $57,500 requires approximately $1,437,500 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 — Texas's FIRE number is approximately $1.64M, based on its $57,500/year average cost. Early retirees should also budget separately for healthcare before Medicare eligibility at 65.
Sources
- 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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