Mississippi, often overlooked in retirement discussions, offers a charming and affordable setting for those seeking Financial Independence, Retire Early (FIRE). Known for its Southern hospitality, rich cultural heritage, and beautiful landscapes, Mississippi provides an ideal environment for early retirees who want a relaxed lifestyle with a low cost of living.
The state offers a blend of historic charm and modern conveniences, making it perfect for those looking to enjoy a slower pace of life without sacrificing comfort. This guide will explore Mississippi’s cost of living, tax considerations, and the best cities for retirement in the state.
Key Terminology
Understanding these terms can help you navigate early retirement in Mississippi more effectively:
- FIRE (Financial Independence, Retire Early): A lifestyle where aggressive saving and investing enables individuals to retire earlier than traditional retirement ages.
- Geoarbitrage: The act of moving to a lower-cost state for retirement to stretch savings further.
- Lean FIRE vs. Fat FIRE: Lean FIRE means retiring with a minimalist budget, while Fat FIRE allows for a more luxurious lifestyle.
- 4% Rule: A widely-used rule to help determine how much you can safely withdraw from retirement savings each year without running out of funds.
- State Tax Exemptions: Some states provide tax exemptions for retirees, reducing the burden on retirement income.
What Is Early Retirement in Mississippi?
Mississippi offers retirees an opportunity to enjoy an affordable cost of living in a state known for its Southern charm and low-key lifestyle. With reasonable taxes and moderate healthcare costs, Mississippi offers a favorable environment for those seeking financial independence.
The state has a low median home price and an abundance of affordable living options, which means early retirees can stretch their savings far. However, retirees must consider healthcare accessibility and occasional hot, humid weather.
How Does Early Retirement Work in Mississippi?
1. Mississippi’s Tax Structure for Retirees
Mississippi has a fairly tax-friendly environment for retirees, with some key features that make it an attractive option.
✅ No State Tax on Social Security Benefits: Mississippi exempts Social Security income from state taxation, making it a great state for retirees who rely on Social Security.
✅ Lower Property Taxes: Property taxes are significantly lower than the national average, making Mississippi appealing for retirees looking to keep living costs down.
✅ State Income Taxes on Other Retirement Income: Mississippi taxes income from pensions, 401(k) plans, and other retirement accounts, but these taxes are relatively moderate compared to other states.
❌ Sales Taxes: Mississippi has a sales tax of 7%, which is above average but doesn’t apply to most food purchases for home consumption.
2. Cost of Living in Mississippi
Mississippi consistently ranks as one of the most affordable states for retirement due to its low housing costs, moderate healthcare expenses, and overall lower prices compared to other regions.
Housing Costs (Median Home Prices in Key Cities)
- Jackson: ~$155K
- Biloxi: ~$210K
- Gulfport: ~$185K
- Oxford: ~$250K
- Tupelo: ~$160K
Rent Prices (Average for 1-Bedroom Apartment)
- Jackson: ~$800
- Biloxi: ~$900
- Gulfport: ~$850
- Oxford: ~$1,100
- Tupelo: ~$850
✅ Affordable Living: Tupelo and Jackson offer affordable real estate and rental prices, making them attractive options for early retirees on a budget.
3. Healthcare in Mississippi
While Mississippi has a decent healthcare system, the state faces challenges in certain areas, including health outcomes and accessibility in rural areas.
- Top Medical Centers: While Mississippi is home to well-regarded hospitals, such as University of Mississippi Medical Center, the state does have some rural healthcare gaps to consider.
- Healthcare Costs Are Below National Average: Mississippi’s healthcare costs for retirees average around $6,500 per year, which is lower than the national average but may vary based on location.
- Medicare and Medicaid Plans: Mississippi has robust Medicaid and ACA marketplace options, making it easier for those under 65 to obtain affordable healthcare.
4. Outdoor Lifestyle and Low-Cost Recreation
Mississippi is a hidden gem for outdoor lovers, offering natural beauty and plenty of low-cost activities for retirees. The state boasts parks, lakes, and scenic trails for hiking, fishing, and boating.
- Beaches and Coastal Activities: The Gulf Coast offers beaches, boating, and fishing opportunities.
- National and State Parks: The Noxubee National Wildlife Refuge and DeSoto National Forest are ideal for nature walks, bird watching, and other outdoor activities.
- Mild Winters for Outdoor Enjoyment: Mississippi’s warm climate makes it ideal for year-round outdoor recreation.
- Affordable Entertainment: Mississippi is also home to a rich cultural scene, including music festivals, museums, and local theaters, which often offer low-cost or free events for residents.
How Does Early Retirement in Mississippi Compare to Other States?
- Mississippi vs. Louisiana: Louisiana offers slightly lower taxes, but Mississippi’s housing prices and affordability make it a better fit for retirees looking to stretch their savings.
- Mississippi vs. Alabama: Mississippi has lower property taxes and moderate income tax rates compared to Alabama, making it a good choice for early retirees seeking a more affordable lifestyle.
- Mississippi vs. Georgia: While Georgia offers larger cities and more job opportunities, Mississippi’s lower housing costs and Southern charm give it an edge for those seeking a quieter, more affordable retirement.
Pros and Cons of Retiring Early in Mississippi
✅ Pros of Early Retirement in Mississippi
✔ Affordable Housing and Low Cost of Living
✔ No State Tax on Social Security Benefits
✔ Moderate Tax Rates
✔ Rich Cultural Heritage and Outdoor Activities
✔ Southern Hospitality and Peaceful Environment
❌ Cons of Early Retirement in Mississippi
❌ High Sales Tax
❌ Healthcare Accessibility in Rural Areas
❌ Moderate State Income Taxes on Retirement Income
❌ Hot and Humid Summers
Best Practices and Tips for FIRE Success in Mississippi
✅ Opt for Affordable Cities: Jackson and Tupelo are great cities for retirees looking for affordable housing and low living costs.
✅ Prepare for Healthcare Costs: While healthcare is affordable, it’s important to stay proactive in securing quality coverage.
✅ Embrace the Outdoors: With mild winters and scenic beauty, enjoy the outdoor lifestyle by taking advantage of Mississippi’s parks, lakes, and wildlife.
✅ Take Advantage of Mississippi’s Tax Benefits: Social Security income is exempt from state tax, and property taxes are lower than most of the country, making it easier to live comfortably on your retirement savings.
Conclusion
Mississippi provides an affordable, peaceful, and friendly environment for early retirees. With low housing costs, no state tax on Social Security benefits, and plenty of outdoor activities, Mississippi is an ideal choice for those seeking financial independence while enjoying a slower-paced, fulfilling lifestyle.
Is Mississippi the right place for your FIRE journey? Let us know your thoughts in the comments below!