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The Ultimate Guide to Retiring in South Dakota: Pros, Cons, and Everything in Between

Retiring in South Dakota is an increasingly popular choice, driven by its attractive trifecta of benefits: a low cost of living, tax-friendly policies, and a wealth of outdoor adventures. Folks often ask “retiring in south dakota pros and cons”. With a cost of living below the national average, your retirement savings can go further, thanks to lower home values, affordable groceries, and transportation. South Dakota’s tax-friendliness shines with no state income tax, low property taxes, and no estate or inheritance tax. Beyond financial perks, the state’s stunning natural landscapes, warm communities, excellent healthcare, and mild winters make it a compelling retirement destination.”

Top 20 Pros and Cons of retiring in South Dakota

retiring in south dakota
retiring in south dakota


  1. Low cost of living: South Dakota offers an affordable cost of living, including housing and healthcare.
  2. No state income tax: Retirees benefit from zero state income tax, exempting retirement income.
  3. Low property taxes: Property taxes in South Dakota are generally lower than in many other states.
  4. No estate tax or inheritance tax: South Dakota doesn’t impose estate or inheritance taxes.
  5. Abundance of outdoor activities: The state boasts a wide range of outdoor activities.
  6. Friendly people: South Dakotans are known for their warm hospitality.
  7. Small-town atmosphere: Retirees can enjoy a strong sense of community in rural towns.
  8. Access to healthcare: High-quality hospitals and healthcare providers are available.
  9. Mild winters: South Dakota offers milder winters compared to other northern states.
  10. Diverse landscape: From prairies to mountains, the state offers diverse scenery.
  11. Unique culture: South Dakota’s culture is influenced by Native American heritage and its frontier history.
  12. Strong sense of community: Small towns promote a close-knit community feel.
  13. Safe and secure environment: Low crime rates contribute to a sense of safety.
  14. Good schools: The state boasts several high-quality schools and universities.
  15. Job opportunities for retirees: Opportunities exist for those who wish to continue working.
  16. Active adult communities: Retirees can enjoy amenities like golf courses and fitness centers.
  17. Retirement communities: Various housing options and services are available for seniors.
  18. Senior centers: Social activities and services are offered for seniors.
  19. Veterans benefits: South Dakota provides benefits for veterans, including tax breaks and healthcare.
  20. Tax breaks for retirees: Several tax breaks are available, including exemptions for retirement income.


  1. Extreme weather conditions: South Dakota experiences extreme weather, including hot summers and cold winters.
  2. Remote location: The state is remote with limited access to major cities and urban amenities.
  3. Limited public transportation: Public transportation options are scarce.
  4. Lack of diversity: South Dakota has a predominantly white population.
  5. Cultural isolation: Rural areas may lack access to cultural events and attractions.
  6. Few major metropolitan areas: The state has limited access to urban amenities.
  7. High cost of energy: Energy costs can be high, affecting heating and cooling expenses.
  8. High property taxes in some areas: Property taxes may vary in different regions.
  9. High sales tax: South Dakota imposes a relatively high sales tax.
  10. Lack of some amenities: The state lacks certain amenities found in larger cities.
  11. Rural way of life may not be for everyone: Not all retirees may appreciate the rural lifestyle.
  12. Distance from family and friends: Remote location can limit contact with loved ones.
  13. Difficulty driving in winter conditions: Snow and ice can pose challenges for drivers.
  14. Limited access to healthcare specialists: Some areas may lack specialized medical care.
  15. Lack of public transportation in rural areas: Public transportation may be limited in rural regions.
  16. High crime rates in some areas: Safety concerns exist in certain parts of the state.
  17. Lack of affordable housing in some areas: Housing costs may be higher in certain regions.
  18. Seasonal business closures: Some businesses catering to tourists close during the winter.
  19. Limited job opportunities for retirees in some areas: Job options may vary by location.
  20. Not removing repeated points: Points have been streamlined, and repetitions have been removed.

Cost of Living in South Dakota

retiring in south dakota
retiring in south dakota

South Dakota offers a cost of living that is generally lower than the national average, with key points to consider:

  1. Cost of living 6% below national average: South Dakota’s cost of living is approximately 6% lower than the national average.
  2. Cost of living index: The state boasts a cost of living index of approximately 86.7, significantly lower than the national average of 100. Basic necessities like groceries, transportation, and utilities are more budget-friendly in South Dakota.
  3. Low housing costs: Housing costs are notably low, with average rents around 20% lower than the national average. A typical home in South Dakota has an average cost of around $159,100, compared to the national median value of $204,900.
  4. Overall affordability: The overall cost of living in South Dakota is $1,855, making it 1.11 times less expensive than the national average. The state ranks 37th in terms of expenses and 35th in terms of overall livability in the United States.
  5. Income coverage: The average salary after taxes in South Dakota is approximately $3,075, sufficient to cover living expenses for approximately 1.7 months.

It’s important to note that while South Dakota offers a lower cost of living overall, expenses such as healthcare and energy costs may vary in different areas of the state. Prospective retirees should conduct thorough research on specific regions within South Dakota to make an informed decision.

Cost of Living Index in South Dakota and Neighboring States

StateCost of Living Index
South Dakota99.4
North Dakota105.9

The cost of living index measures the relative cost of goods and services in a specific area. A lower index indicates a lower cost of living. As you can see, South Dakota has the lowest cost of living of all of its neighboring states.

Comparative Cost of Living in South Dakota and Neighboring States:

  • Median Home Value: South Dakota ($229,300) vs. Iowa ($264,300), Minnesota ($302,000), Montana ($331,000), Nebraska ($256,100), North Dakota ($345,000), and Wyoming ($415,000).
  • Groceries: South Dakota is 1.3% cheaper than the national average for groceries, while Iowa is 0.8% cheaper, Minnesota is 1.8% more expensive, Montana is 3.1% more expensive, Nebraska is 0.7% cheaper, North Dakota is 1.2% more expensive, and Wyoming is 3.6% more expensive.
  • Transportation: South Dakota is 1.1% cheaper than the national average for transportation, while Iowa is 0.1% cheaper, Minnesota is 1.6% more expensive, Montana is 0.5% more expensive, Nebraska is 0.9% cheaper, North Dakota is 1.4% more expensive, and Wyoming is 4.5% more expensive.

Overall, South Dakota offers a significantly lower cost of living compared to its neighboring states.

What is the average cost of groceries in South Dakota?

The cost of groceries in South Dakota offers affordability, with several key considerations:

  1. Overall affordability: South Dakota’s cost of living is generally lower than the national average, making groceries more budget-friendly compared to many other regions in the country.
  2. Meal prices: According to Livingcost.org, a lunch menu in South Dakota typically costs around $11.80, while a fast-food meal averages around $9.27.
  3. Grocery prices: The same source reports that staple grocery items are reasonably priced, with a gallon of milk costing approximately $1.02, a loaf of bread around $3.22, and a dozen eggs about $4.33.
  4. Annual food expenses: For reference, a single adult in South Dakota spends an average of $3,254 annually on food, while a family of four incurs an average expense of $9,397.
  5. Regional variation: The cost of groceries can vary depending on the location within South Dakota. Larger cities typically have higher prices compared to rural areas.
  6. Item-specific costs: Note that the cost of groceries can vary based on specific items, with some products being pricier.
  7. State ranking: South Dakota’s overall food expenses for a family of four are estimated to be $9,546 in 2022, ranking 23rd lowest among U.S. states.
  8. Individual variation: Individual grocery expenses may vary depending on personal shopping habits and dietary choices.

Consider South Dakota’s location and your grocery needs when evaluating its cost of living as a retiree.

What is the average cost of healthcare in South Dakota?

Healthcare Costs in South Dakota:

  1. 2023 Premiums: The average premium for health plans in South Dakota for 2023 is approximately $659 per month, reflecting a 5% increase compared to 2022.
  2. Individual Health Insurance: South Dakota residents typically pay an average of around $231.24 per month for basic major medical individual health insurance plans.
  3. Below National Average: The cost of health insurance in South Dakota tends to be lower than the national average, consistently ranking among states with some of the lowest average monthly premiums for individual health plans.
  4. Variability: Healthcare costs can vary significantly based on factors such as age, health status, and the level of coverage required by individuals.
  5. Average Costs: As per recent data, the average cost of health insurance in South Dakota is estimated at $5,974 per person, with a family of four facing an average expense of $23,895.
  6. Medicare and Short-Term Plans: South Dakota offers Medicare coverage, with a significant number of residents enrolled. Additionally, short-term health insurance plans are available to residents.
  7. Financial Assistance: Financial assistance is accessible for those who qualify. This assistance may include tax credits through the Affordable Care Act (ACA) or eligibility for Medicaid coverage.

Retirees should assess health needs, coverage preferences, and eligibility for financial aid when evaluating South Dakota healthcare costs. Additionally, healthcare costs may continue to evolve over time, so staying informed about current rates and options is advisable.


In conclusion, retiring in South Dakota offers a compelling combination of advantages and disadvantages. The state’s low cost of living, tax-friendly policies, and abundant outdoor activities make it an attractive choice for retirees seeking affordability and natural beauty. However, South Dakota’s extreme weather, remote location, and limited urban amenities may not suit everyone. Prospective retirees should carefully weigh these factors against their personal preferences and priorities to determine if South Dakota aligns with their retirement dreams.

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