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Arizona vs New Mexico for retirement
On the 8 lines this page tracks, Arizona and New Mexico split evenly. The decision usually comes down to your own spending, housing, income mix, and which city fits, rather than the state averages.
A green check marks the more retiree-friendly side on that line (lower cost, lower tax, or Social Security not taxed). Lower is not always better for you; these are state averages, not your plan.
Common questions
Arizona vs New Mexico, answered.
Is Arizona or New Mexico cheaper to retire in?
On the BEA cost-of-living index, New Mexico sits at 92 and Arizona at 101, where 100 is the U.S. average. So the same basket of goods tends to cost less in New Mexico. Housing and your own budget still decide the real number.
Which has lower taxes for retirees, Arizona or New Mexico?
Arizona uses about a 2.5% blended retirement-income planning rate. New Mexico uses about a 4.5% blended retirement-income planning rate. Arizona's average combined sales tax is 8.5% and its property-tax planning rate is 0.6%; New Mexico is 7.7% and 0.8%.
Does Arizona or New Mexico tax Social Security?
Arizona does not tax Social Security benefits under the current state-tax summary used here. New Mexico is one of the states where Social Security can still need a state-tax check.
Where is long-term care cheaper, Arizona or New Mexico?
In the CareScout and Genworth 2025 medians, assisted living runs about $75,000 a year in Arizona and $71,400 in New Mexico; a semi-private nursing-home room is about $100,375 versus $109,500.