The Hidden Retirement Gems of the Southwest: 10 Towns You Can’t Overlook

One of the biggest choices retirees face is whether to stay where they are or relocate for their retirement years. Southwestern states like Arizona, New Mexico, Oklahoma, and Texas are gaining popularity with retirees thanks to their milder temperatures, lower costs of living, tax-friendly policies, and rich culture. 

Key Takeaways

• Many Southwestern towns offer below-average housing, food, and transportation costs, allowing retirees to stretch their savings further.
• Median home values in several of our top Southwestern destinations are significantly lower than the national average, which can make homeownership more accessible or downsizing a financial win during retirement.
• States including Arizona, Oklahoma, and Arizona do not tax Social Security benefits.
• Essentials like groceries, healthcare, and utilities may be more affordable in smaller Southwestern towns compared to larger cities.
• Many of these locations are near top-rated healthcare facilities and airports, which may help retirees save on medical and travel expenses without compromising on quality and options.

To make deciding where to retire easier, Investopedia partnered with Travel + Leisure to identify what we consider to be the best places to retire in the Southwest. Our research analyzed key financial factors, including the cost of living, housing prices, state taxation policies, and proximity to health care facilities and airports.

Top Retirement Destinations in the Southwest

1. Las Vegas, New Mexico

Las Vegas, located in San Miguel County, New Mexico, offers retirees affordable living in a hometown rife with historic charm. Las Vegas has more than 900 listed historic buildings, and the milder climate of the Southwest makes them a pleasure to enjoy year-round. 

The cost of living and home prices in San Miguel County are significantly lower than the national average, making it an appealing option for people on a fixed income, with the county’s median monthly housing and food costs both just around $600. The median home value is $177,600, too, which could make downsizing to this town an cost-effective place to buy if you consider the median national home value is $355,328, per Zillow.

While Las Vegas is a small town with less than 13,000 people, it’s less than a couple hours away from both Santa Fe and Taos to offer additional amenities and top-notch medical care nearby. Additionally, there are two national forests within minutes of downtown for retirees hoping to get outside more in retirement.

2. Santa Rosa, New Mexico

Santa Rosa is a small town in New Mexico with a population of just 2,742, situated along Route 66. It sits in Guadalupe County and shares the county’s low cost of living and high amounts of natural beauty. The median monthly housing and food costs are $510 and $603, respectively.

Residents and visitors of Santa Rosa can have a delicious lunch downtown or enjoy one of many walking trails in the city park. What might surprise some is that Santa Rosa is known as the “Scuba Diving Capital of the Southwest.” Even if retirees aren’t interested in discovering the underwater life of the 81-foot artisan spring, they can still enjoy the clear blue lakes and springs nearby. 

Important

Keep in mind that New Mexico state does tax social security and retirement account withdrawals as income, so weigh that against any potential day-to-day cost savings when making your relocation decision.

3. Hugo, Oklahoma

Hugo, the Choctaw County seat, is a rural town with plenty of history and community events. Hugo Lake offers outdoor enthusiasts plenty of options for fishing and boating. The wildlife attracted to the gorgeous lake makes for a robust hunting season for retirees hoping to take advantage of the nearly 26,000 acres of hunting land nearby. 

Housing prices in Hugo are exceptionally low, with the median housing cost for residents of Choctaw County being a mere $608 a month. Monthly food ($600) and transportation costs ($1,291) are also below the national average.

Note

Adding to the affordability of Hugo, the state Oklahoma does not tax Social Security benefits as income.

4. Port Arthur, Texas

Port Arthur is a large port town on the Gulf of Mexico in Jefferson County, Texas. Its proximity to Louisiana gives Port Arthur the nickname “Cajun Capital of Texas,” meaning that residents can count on delicious fresh seafood in restaurants and grocery stores around town. Median grocery prices in Port Arthur are low at $553 compared to the national average, which could help your fixed income go farther. Median home value and housing costs are also well below average, too.

From a lifestyle perspective, Port Arthur has plentiful natural and cultural attractions, like Sea Rim State Park, Buu Mon Buddhist Temple, and Babe Didrikson Zaharias Memorial Golf Course and Museum. Beaches and water are never more than a few miles away in Port Arthur, but beach living is surprisingly affordable for retirees who don’t mind the humidity.

5. Eagle Pass, Texas

Eagle Pass, situated along the Rio Grande in Maverick County, Texas, is a mid-size border town that benefits from rich Native American and Mexican heritage.

The median home listing in Eagle pass was around $265,000 as of January 31, 2025, accordingly to Zillow, which is well below the national average. Furthermore, our census data research found that the median amount residents spent on housing costs each month is $755, one of the lowest among the other locations on this list.

Tip

Eagle Pass is also home to two international bridges that make popping into Mexico easy for those who want to take advantage of favorable currency exchange rates. 

6. Longview, Texas

Longview is the county seat of Gregg County, Texas. While Longview is a reasonably large town with a population of 83,763, residents flock to the still active and thriving Main Street, which helps retain a small-town feel. Longview residents can simultaneously enjoy the perks of a tight-knit community and one of a well-resourced, thriving metropolis. 

Perhaps even better, the median monthly housing costs for residents of Gregg County are just around $1,000 a month, and less than $600 in monthly food costs. With that below-average cost of living and the fact that Texas has no state income tax and does not tax Social Security income or retirement benefits, retirees may more money in their pockets to explore all that Longview and the surrounding area has to offer. 

7. Parker, Arizona

Parker provides a mild, warm climate with easy access to the Colorado River for retirees hoping to spend time in nature. Located in La Paz County, Arizona, the small town of just over 3,000 residents is a community full of support from the local government and neighbors. 

Median monthly housing costs in La Paz County are just under $550 a month, and medan transportation, food, and taxes are also well below other locations we evaluated—in this region of the U.S. or elsewhere.

Note

Social Security income is not taxed by the state of Arizona, so retirees can keep more of their earned benefits every month.

8. Albuquerque, New Mexico

Albuquerque, New Mexico’s largest city, is already host to many retirees seeking mild weather, adventure, and affordable living. For a city with over 550,000 residents, Albuquerque still has the charm of a small town full of friendly faces and active community organizations. 

The cost of living in Albuquerque is considered low to moderate, with below-average median monthly transportation costs ($1,081 for the county) and grocery expenses ($627 for the county), helping retirees make their dollars go further. Bernalillo County boasts a strong healthcare system, with 1,500 healthcare establishments, including several top-ranked hospitals specializing in retirees’ healthcare needs.

Albuquerque sees an average of 310 sunny days a year. The sun and mild, dry climate make it an excellent destination for retirees looking to enjoy the outdoors in their golden years. Plus, it’s only 4 miles from Albuquerque International Sunport Airport, so you can hop on a plane without hassle.

9. Muskogee, Oklahoma

Muskogee, Oklahoma, traces its history back to 1872 when the first railroad to cross Native American land laid its tracks. Today, Muskogee attracts thousands of visitors yearly with its Five Civilized Tribes Museum, Oklahoma Music Hall of Fame, and annual Azalea Festival.

Muskogeetouts its place as the fourth most affordable hometown in the United States. Housing options in Muskogee are not only inexpensive but vast, with county median monthly housing costs sitting at a hair under $800. Residents can put down roots in an apartment downtown or stretch out a bit with some land. 

While it is a medium-sized town of about 37,000 people, it’s just a hop, skip, and jump from Tulsa, Oklahoma, making access to top-notch health care and other big-city amenities quick and easy. With a yearly mean temperature of 60 degrees and plenty of sunshine, Muskogee is a great option for retirees. 

10. Lake Havasu City, Arizona 

Lake Havasu City has been referred as Arizona’s playground, and perhaps for good reason. This city of just under 60,000 in Mohave County, Arizona, boasts mild temperatures and hundreds of miles of coastline on the Colorado River. For retirees who enjoy the outdoors there are seemingly never-ending opportunities to fish, hike, swim, boat, golf, or enjoy the beach. 

When it comes to the cost of living, the median Lake Havasu City is higher than other spots on this list but is still well-below the national average. For example, county median monthly housing costs are $914 and monthly food expenses are $617.

The Bottom Line

Retiring in the Southwest has many advantages and is becoming popular for retirees seeking warm weather, affordability, and culture. Many cities in the Southwest already have well-established retirement communities, and with these communities come social opportunities and specialized health care.  

The Southwest mostly has mild winters and an abundance of sunshine, ideal for retirees who want the sun without the heat and wish to avoid snow. The Southwest is a haven for outdoor enthusiasts, whether that means hiking, golfing, gardening, or enjoying the weather from the porch. 

In addition to the pleasant climate, many states have lower costs of living and affordable housing, allowing retirement income to stretch further. A few states including Texas and Arizona do not tax Social Security benefits, and Nevada has no state income tax.  

Note

To learn more about how we created this list of best places to retire in the Southwestern U.S., read our methodology.