You Can Live Well in Alabama on Just Your Social Security, If You’ve Paid Off Your Mortgage

For retirees in Alabama, Social Security benefits can be enough to cover the basics—as long as the mortgage is paid off.

According to a Realtor.com® analysis of median Social Security benefits by state and the Elder Economic Security Standard Index,, the average retiree in Alabama ends up with an annual surplus of $576, or about $48 a month, after paying for essential living costs.

While it may not seem like a lot, the extra funds are more than homeowners have in most of the country, and can be put to good use in future-proofing a home.

Housing costs keep Alabama affordable

Retirees in Alabama face average monthly expenses of $1,805, including housing costs of $419 per month without a mortgage. Against those expenses, the state’s median Social Security benefit of $1,853 per month leaves seniors just above water, with a slim margin of extra cash flow to play with.

What helps set certain states apart is their relatively modest housing costs. Alabama exemplifies this, with housing expenses far below the nearly $1,000–plus monthly costs retirees face in shortfall states like New Jersey or Massachusetts.

At just $419 per month, Alabama’s housing costs represent roughly 23% of retirees’ total budgets—well under the 30% affordability guideline used by the Department of Housing and Urban Development. This housing advantage is what makes Social Security stretch far enough to cover the basics in Alabama, even if the margin is thin.

Retirement living in the heart of the South

Alabama’s affordability extends beyond housing. The state boasts some of the lowest property taxes in the nation, along with relatively inexpensive utilities and healthcare compared to the national average.

Popular retirement destinations include Huntsville, Birmingham, and coastal Mobile. The Gulf Coast, in particular, draws retirees seeking warmer weather and a slower pace of life without Florida’s higher costs.

That said, retirees should weigh location carefully. While housing is affordable statewide, insurance costs in coastal counties can be higher due to hurricane risks, potentially narrowing the budget surplus.

Alabama vs. the National Picture

Across the country, the typical retiree faces a shortfall of $2,762 annually, or about $230 each month, even after eliminating mortgage payments. Alabama’s $576 surplus, though small, makes it one of only 10 states where retirees relying solely on Social Security avoid falling into the red.

Compared to its peers, Alabama sits in the lower half of the surplus states. Delaware leads with a $1,764 annual cushion, while Michigan barely clears the line with just $132 left over. Alabama’s modest surplus demonstrates both the benefits and limitations of living in an affordable state—it works, but there’s little room for error.

The outlook for retirees on Social Security

On a broader level, Social Security itself faces solvency concerns. Without reforms, the program is expected to pay only about 77% of promised benefits by 2033. For Alabama retirees, such cuts would erase the $576 cushion and push budgets into deficit.

Still, with its low housing costs and modest taxes, Alabama remains one of the few states where retirees can make Social Security alone cover the essentials. For those who have reached the milestone of paying off their mortgage, the Heart of Dixie offers both affordability and a comfortable quality of life.

This article was produced with editorial input from Dina Sartore-Bodo, Gabriella Iannetta, and Allaire Conte.