Retiring in Arkansas: benefits and challenges

Key takeaways

• Arkansas is an affordable, scenic retirement option, with over 17% of its population 65 or older.
• Low cost of living and natural beauty are draws, against extreme weather and limited healthcare access in rural areas.
• Top retirement spots include Hot Springs, Fayetteville, and Little Rock.

Is Arkansas a good place to retire?

Arkansas can be a good place to retire for the right person, especially if you value affordability and natural scenery over big-city amenities. It isn't a traditional retirement hotspot like Florida or Arizona, and limited healthcare and cultural access in rural areas mean it won't suit everyone.

According to the U.S. Census Bureau, Arkansas had a population of approximately 3.1 million people in 2024, with around 18% of residents age 65 or older, roughly in line with the national average.

At what age can you retire in Arkansas?

There's no mandated retirement age in Arkansas, but most retirees plan around two key milestones: Social Security and Medicare eligibility.

• Social Security benefits: Available starting at age 62, though full retirement age is 66 to 67 depending on your birth year.
• Medicare eligibility: Begins at 65 regardless of retirement status, so you'll need alternative coverage if you retire earlier.
• Retirement savings: Financial experts recommend saving at least 15% of your income for retirement, so it's worth starting as early as possible.

What are the pros and cons of retiring in Arkansas?

Retiring in Arkansas comes with real advantages, like low taxes and natural scenery, and real tradeoffs, like limited rural healthcare access, so it's worth weighing the full pros and cons before deciding whether it's a good place to retire or a bad place to retire for you.

✅ Pros of retiring in Arkansas

• A tax-friendly location: Arkansas is tax-friendly for retirees, since it doesn't tax Social Security or most other retirement income.
• Low cost of living: Stretches housing, food, and healthcare budgets further than in many other states.
• Natural scenery: The Ozark Mountains, Hot Springs National Park, and Buffalo National River give retirees plenty to explore.
• A slower pace of life: Quieter and less crowded than bigger retirement destinations.

❌ Cons of retiring in Arkansas

• Limited healthcare access: Rural areas often have fewer healthcare options than larger metros.
• Limited cultural access: Fewer cultural events than in bigger cities.
• Weather risk: The state sees its share of tornadoes and ice storms.
• Limited job opportunities: Part-time work can be scarce outside the bigger cities.

Best places to retire in Arkansas

Here are some top retirement destinations in Arkansas:

• Hot Springs: Known for its natural hot springs, historic bathhouses, and outdoor activities like hiking and boating on Lake Hamilton.
• Fayetteville: Home to the University of Arkansas, with a lively cultural scene, low cost of living, and good medical access.
• Little Rock: The state capital offers city amenities, outdoor recreation, and a vibrant arts scene.
• Bentonville: Home to Walmart's headquarters, with downtown shopping and dining and the Crystal Bridges Museum of American Art.
• Eureka Springs: A picturesque Ozark town known for Victorian architecture and scenic beauty.
• Mountain Home: Located in the Ozarks, with retirement communities, natural beauty, and affordable living.
• Bella Vista: A planned community in northwest Arkansas with golf courses, lakes, and varied housing options.

Taxes in Arkansas for Retirees

Arkansas is fairly tax-friendly for retirees. It fully exempts Social Security benefits, and residents 59 and older can deduct up to $6,000 ($12,000 for joint filers) of qualifying pension, 401(k), or IRA income. Income tax tops out at 3.9%, one of the lower top rates in the country after several recent cuts, and applies to other retirement income above that threshold. Arkansas's average effective property tax rate is just 0.56%, according to the Tax Foundation, among the lowest in the US, working out to roughly $2,240 a year on a $400,000 home. The tradeoff is sales tax: the combined state and local rate averages 9.48%, among the highest in the country.

Retiring in Arkansas vs. Nearby States

Arkansas beats most of its neighbors on income and property tax, with a 3.9% top income tax rate, a full Social Security exemption, and a low 0.56% effective property tax rate. Where neighbors sometimes win is sales tax, since Arkansas's roughly 9.5% combined rate is on the high side. Here's how Arkansas compares.

Arkansas vs. Missouri

Both fully exempt Social Security, but Missouri's top income tax rate of 4.7% and 0.89% effective property tax both run higher than Arkansas's 3.9% and 0.56%. Missouri's sales tax averages 8.44%, a bit lower than Arkansas's 9.48%.

Missouri suits retirees prioritizing lower sales tax; Arkansas suits those wanting lower income and property taxes.

Arkansas vs. Tennessee

Neither taxes Social Security, but Tennessee has no income tax at all, versus Arkansas's 3.9% top rate, making it the better choice for large 401(k) or IRA withdrawals. Arkansas edges ahead on sales tax, at 9.48% versus Tennessee's 9.61%, with property tax close between the two.

Tennessee suits retirees drawing heavily on retirement accounts; Arkansas suits those who value its lower overall cost of living.

Arkansas vs. Mississippi

Both exempt Social Security and most other retirement income, and Mississippi's flat 4.0% income tax sits close to Arkansas's 3.9% top rate. Mississippi's sales tax runs much lower, at 7.06% versus Arkansas's 9.48%, though its property tax is slightly higher, at 0.58% versus 0.56%.

Mississippi suits retirees who want lower everyday sales tax; Arkansas suits those prioritizing natural scenery and lower property costs.

Is Arkansas the right place to retire?

Arkansas suits retirees who want an affordable cost of living, minimal tax on Social Security and retirement withdrawals, and easy access to outdoor scenery. It's a tougher fit for those who want big-city healthcare, a lively cultural scene, or fewer weather extremes like tornadoes and ice storms.

Unbiased can match you with a financial advisor to help you weigh Arkansas's tax benefits against its limited healthcare access and weather risks.

Frequently asked questions

Does Arkansas tax Social Security?

No. Arkansas fully exempts Social Security benefits from state income tax.

At what age can you retire in Arkansas?

There's no state-set retirement age. Social Security benefits can start at 62, full benefits arrive at 66 to 67 depending on birth year, and Medicare eligibility begins at 65.

What's the best place to retire in Arkansas?

It depends on your priorities: Hot Springs for outdoor access and history, Fayetteville for culture and affordability, Bella Vista for planned-community amenities.

Is Arkansas a bad place to retire?

Not for most people. The main drawbacks are limited rural healthcare access and severe weather risk, but low costs and natural scenery outweigh that for many retirees.

Is Arkansas tax-friendly for retirees?

Yes. Social Security and most other retirement income go untaxed, and income tax tops out at 3.9%, though sales tax runs above the national average.