Explore the 25 Best Midwest Towns Perfect for Your Retirement

If you’re approaching retirement, you may be looking forward to how you’ll spend your nonworking years, and one of the most important aspects of how your retirement lifestyle will take shape is the place in which you retire.

Investopedia recently named the top 100 places in the U.S. for your next chapter. Here you’ll find the 29 places that make up the top picks in the Midwest. Climate, local activities, access to nature, quality of healthcare services, and cost of living all play a role in how your retirement years will turn out. When it comes to the cost of living, the Midwest can be an option for affordability.

The region, which consists of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and South Dakota, tends to have lower everyday expenses than in many coastal or fast-growing regions. But the list is dominated by just five states.

A good number of Midwest states demonstrate overall price levels that are below the national average. This means housing, services, and other expenses are usually lower than in other parts of the country. For retirees dependent on Social Security benefits, fixed pensions, or retirement plan withdrawals, lower expenses mean more financial freedom and less stress around money.

25 Midwest Towns to Consider for Retirement

Below are 25 Midwest towns to consider for your retirement.

1. Chicago, Illinois
2. Elgan, Illinois
3. Algona, Iowa
4. Ankeny, Iowa
5. Cedar Rapids, Iowa
6. Corning, Iowa
7. Council Bluffs, Iowa
8. Des Moines, Iowa
9. Dubuque, Iowa
10. Iowa City, Iowa
11. Knoxville, Iowa
12. Mason City, Iowa
13. Pella, Iowa
14. Sioux City, Iowa
15. West Des Moines, Iowa
16. Niles, Michigan
17. Gregory, South Dakota
18. Pierre, South Dakota
19. Rapid City, South Dakota
20. Sioux Falls, South Dakota
21. Appleton, Wisconsin
22. Eau Claire, Wisconsin
23. La Crosse, Wisconsin
24. Waukesha, Wisconsin
25. Wausau, Wisconsin

Financial Benefits and Trade-Offs of Retiring in the Midwest

One of the main benefits of living in the Midwest is housing affordability. According to data from the Federal Reserve Bank of St. Louis, the median sale price for homes in the Midwest is below that of the United States as a whole. Additionally, the annual cost of living is lower in the Midwest than it is in most coastal regions.

Lower costs for both housing and everyday purchases allow your retirement savings and other benefits to last longer, providing a more secure and, ideally, enjoyable retirement. The savings can help pay down debt, be used for hobbies and vacations, go toward helping out children or grandchildren, or just provide you with a sense of financial safety.

Another important financial factor is taxes. Taxes vary by state. South Dakota, for example, does not have a state income tax, meaning that Social Security benefits, pension payments, or withdrawals from retirement accounts (like 401(k)s) do not incur taxes.

The rest of the Midwest’s states do have an income tax, but the rates vary. For example, Kansas has a 5.58% income tax rate, and Indiana has a 2.95% income tax rate, which has been decreasing annually and will continue to do so for 2027. This highlights the importance of choosing the right state for your finances.

Healthcare access will also vary by town or city. Large cities like Chicago, Iowa City, and Des Moines all have large hospitals and medical networks, whereas smaller towns may require longer travel for medical care, particularly specialized care.

Why Some States Dominate

Iowa, Wisconsin, and South Dakota dominate our list because they generally have lower housing and everyday costs than many more industrial or densely populated places, like Illinois and Ohio. Chicago and Cleveland may offer more overall services and strceonger healthcare access, but they usually have higher costs and higher local taxes, which can strain the finances of retirees on fixed incomes.

On the other hand, many towns in Iowa, Wisconsin, and South Dakota are a mix of small population centers, slower housing appreciation, and fewer boom-and-bust cycles, which can keep prices low and budgets manageable.

The Bottom Line

For retirees considering where to settle down for their nonworking years, the Midwest offers affordable housing options, lower day-to-day costs, and the options of small towns and larger cities. While each place will be suited for a different lifestyle, retirees will generally find financial flexibility and a more relaxed day-to-day life in the Midwest.