2. Peoria, Illinois

Nestled along the Illinois River, Peoria is a historic riverfront city that balances low real estate prices with excellent healthcare infrastructure. The city is home to a massive medical district, providing world-class care that rivals much larger metropolitan areas—a critical factor when evaluating cheap homes for retirees. The local housing stock includes beautiful, older homes with character, many of which fall comfortably under the $100,000 mark if you are willing to handle minor cosmetic updates.

Peoria features a vibrant riverfront district, a symphony orchestra, and numerous golf courses. Illinois does not tax Social Security or pension income, which is a massive benefit for retirees. However, Illinois is notorious for having some of the highest property tax rates in the nation. Even with a home valued at $85,000, your annual property tax bill will be higher than in neighboring states, so you must factor this into your monthly budget.