21. Sioux Falls, South Dakota

Sioux Falls is the financial standout among larger Midwest cities in 2026. South Dakota has no state income tax of any kind — not on Social Security, not on pensions, not on investment income — making it one of the most tax-friendly states for retirees in the entire country. Average 1-bedroom rents run around $970 per month, leaving the typical Social Security recipient with meaningful room in their budget.

The city itself is more lively than its plains setting might suggest. Falls Park — with its dramatic waterfalls in the heart of the city — is a spectacular and entirely free attraction. The Washington Pavilion of Arts and Science, active riverfront trails, and a growing restaurant and craft brewery scene give retirees a full lifestyle at low cost.

Healthcare is one of Sioux Falls’ strongest assets: Sanford Health and Avera Health are both major regional health systems with nationally recognized senior care programs. For tax-conscious retirees who want to maximize every dollar of Social Security income, South Dakota’s zero-tax environment combined with Sioux Falls’ sub-$1,000 rents make this one of the most financially efficient retirement locations in the country.