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If you're trying to get ahead financially before retirement, you might be weighing a move to a lower-cost-of-living area where you can stretch your savings further. But before relocating, check out this recent study from WalletHub: the retirement destination you're eyeing might not be the best place for building a solid financial future.
WalletHub conducted a study to rank states on factors like bankruptcy filings, number of accounts in distress, credit scores, and number of searches for words like "debt" and "loan" to figure out which states have the highest number of people who are struggling financially. Most of these areas are low-cost-of-living states, and one of the worst offenders is among the most popular retirement destinations in the U.S.
Keep reading to learn more about the ten highest-ranked states for financial distress, listed from the tenth most distressed to the first.
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Alabama
Total score: 50.8
One of seven southern states in the "most financially distressed" list, Alabama's cost of living is far below average. According to real estate company Redfin, the state's median home sales price is just $290,000, while the average monthly rent is only $1,205.
In spite of these below-average rates, though, many residents struggle to make ends meet. A 2024 study ranked Alabama 48th out of 50 states in terms of poverty, and WalletHub's research shows Alabama residents had the fourth-highest Google search for keywords relating to "loans," likely indicating people in the area are searching for ways to cover costs.
Kentucky
Total score: 52.07
Although Kentucky is the second-least financially distressed state in the top ten, it's ranked third in terms of people with accounts in distress (meaning people with accounts in forbearance or with payments deferred).
It also ranks third for residents with the highest number of distressed accounts, which indicates that Kentucky residents undergoing financial strain tend to have more than just one credit account in distress.
Mississippi
Total score: 52.11
Mississippi ranked second when it comes to financial stress related to credit scores and was also pretty high on the list for distressed accounts.
That said, Mississippi was the second most affordable state in the Union in 2025 with notably affordable housing, grocery, utilities, and transportation costs. Only Oklahoma outranked Mississippi for nationwide affordability.
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North Carolina
Total score: 53.53
North Carolina comes in right after Kentucky for residents with accounts in distress, though it takes eighth place for people with multiple accounts in forbearance or deferral. Interestingly, the Tar Heel State also consistently makes top-ten lists as retirement spots for frugal seniors, especially those who intend to flock to Florida but end up deciding on a cheaper state with all four seasons.
Oklahoma
Total score: 55.95
Oklahoma might be the most affordable state in the nation, but it also has a high number of residents in financial distress, ranking relatively high in search volume for "loan" and "debt" during 2024 and 2025.
The city you live in can make a big difference in how affordable Oklahoma is for you: the state's median home sales price is $243,600, but the median price in a city like Enid is just $147,000, and rent in Enid is just $572 per month.
South Carolina
Total score: 56.49
Another popular retirement destination is South Carolina, which is incredibly picturesque, but also has more residents who are struggling financially than 45 other states. It has the second-highest number of people with credit accounts in distress and takes fourth place for residents with more than one distressed account.
The median home sales price in South Carolina is higher than that in Oklahoma, so if you're worried about the cost of living, most of the other states on this list are cheaper alternatives.
Nevada
Total score: 58.11
Nevada is no Arizona, but it's an increasingly popular retirement destination for snowbirds who prefer desert heat to seaside humidity. As the fourth most-financially-distressed state, it had one of the greatest changes in bankruptcy filings between March 2024 and 2025.
It's possible that Nevada's gambling laws impact how much cash its residents keep in their wallets: at $15,606 per person, Nevada's consumer spending at casinos vastly outpaces that of all other states.
Louisiana
Total score: 61.50
The third-most-distressed state in the county has the highest number of distressed credit accounts per person, and nearly 12% of all residents have at least one credit account currently in deferral or forbearance.
The state also takes second for the most Google searches of the word "loan" between 2024 and 2025, which makes sense considering Louisiana residents have the third-lowest credit scores in the country on average.
Florida
Total score: 61.52
Florida is one of the most popular retirement destinations for senior Americans, but if you've been looking forward to life in the Sunshine State, it's crucial to keep a tight grip on your finances. As the second-most financially distressed state in the country, Florida has the highest number of residents with accounts in distress.
Recent years haven't been kind to Floridians, either: between the first quarters of 2024 and 2025, the number of distressed accounts increased by 23%.
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Texas
Total score: 62.45
Thinking of retiring to the Lone Star State? You might want to reconsider. Texas gets a lot of praise for its low cost of living, but according to WalletHub, its residents are the most financially distressed in the nation.
7.1% of its population have accounts in forbearance, and its bankruptcy filings went up by 22% in a single year. Overall, the state ranked the worst when looking at all categories: credit score, people with accounts in distress, number of accounts in distress, change in bankruptcy filing, "debt" search, and "loan" search.
Bottom line
These states may have the highest number of individuals in financial distress, but that doesn't mean you're destined to distress if you move. Using your senior benefits wisely, maximizing your retirement account contributions, and living within your means can help you beat the financial odds no matter where you live out your golden years.
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