Retiring in Hawaii: Taxes, Healthcare & Cost of Living (2026)

Hawaii offers a retirement experience unlike anywhere else in the United States — year-round warm weather, stunning natural beauty, and a cultural richness rooted in Polynesian, Asian, and American traditions. The trade-off is cost. Hawaii has the highest cost of living of any state, with housing, groceries, and healthcare all running well above the national average. The state does not tax Social Security benefits.

The combination of tax policy, healthcare infrastructure, climate, and cost of living determines how well your retirement savings will last in Hawaii. This guide covers the top cities for retirees, a full tax breakdown, healthcare access, and realistic budget estimates for 2026.

Whether you are relocating from a high-cost state or staying close to family, understanding the full picture matters. Use our tax comparison tool to see how Hawaii stacks up against other states you are considering, and check our see what you can afford to estimate what you can buy on a retirement budget.

Top Retirement Cities in Hawaii

The following cities stand out for retirees in Hawaii based on cost of living, healthcare access, walkability, climate, and community infrastructure. The cost of living (CoL) index uses 100 as the national average — below 100 means cheaper than most of the country.

Hilo

Hilo sits on the Big Island’s rainy eastern coast and is the most affordable option on the islands. The town has a laid-back, old-Hawaii feel — farmer’s market (the largest in the state), independent shops, and proximity to Volcanoes National Park. Hilo Medical Center provides local care. The pace is slow, the cost lower than Honolulu, and the community tight-knit. Rain averages 126 inches per year, which keeps everything green but affects daily planning.

Walkability: Hilo has a walk score of 48, which means some errands can be completed on foot in certain neighborhoods. A car is helpful for most activities, but the walkable pockets around the downtown area and main commercial corridors give retirees options for staying active without driving everywhere.

Climate: Hilo has a tropical, rainy climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.

With a cost of living index of 120 and a median home price of $425,000, Hilo runs above the national average in cost. Check our budget calculator to see how your retirement income translates in Hilo, or review closing costs in Hawaii if you are planning a purchase.

Kailua-Kona

Kailua-Kona, on the Big Island’s sunny western coast, gets about 18 inches of rain per year — the driest spot in the state. Kona Community Hospital provides basic care, and the North Hawaii Community Hospital in Kamuela adds coverage. Snorkeling, fishing, and coffee-farm tours define the lifestyle. The Ironman World Championship is held here each October. Housing is expensive but cheaper than Oahu.

Walkability: Kailua-Kona has a walk score of 38, which means some errands can be completed on foot in certain neighborhoods. A car is helpful for most activities, but the walkable pockets around the downtown area and main commercial corridors give retirees options for staying active without driving everywhere.

Climate: Kailua-Kona has a tropical, dry climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.

With a cost of living index of 130 and a median home price of $685,000, Kailua-Kona runs above the national average in cost. Check our affordability tool to see how your retirement income translates in Kailua-Kona, or review closing costs in Hawaii if you are planning a purchase.

Kihei

Kihei sits on Maui’s sunny south shore with 6 miles of beaches. Maui Memorial Medical Center (in Wailuku, 20 minutes north) provides local care. The cost is steep, but retirees from the mainland often sell expensive coastal properties and buy here. The climate is warm and dry year-round, with temperatures between 75 and 85 degrees. Wailea, the resort area south of Kihei, adds upscale dining and shopping.

Walkability: Kihei has a walk score of 32, which means a car is needed for most activities. Retirees should plan for reliable transportation. Several neighborhoods have sidewalks and short drives to shopping centers and medical facilities, but daily errands generally require a vehicle.

Climate: Kihei has a tropical, dry climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.

With a cost of living index of 135 and a median home price of $795,000, Kihei runs above the national average in cost. Check our budget calculator to see how your retirement income translates in Kihei, or review closing costs in Hawaii if you are planning a purchase.

Kailua (Oahu)

Kailua, on Oahu’s windward side, offers one of the best beach lifestyles on the islands. Kailua Beach and Lanikai Beach are consistently ranked among the best in the world. Adventist Health Castle Medical Center provides local care, and major Honolulu hospitals are 30 minutes away. The town has a walkable commercial area, good restaurants, and a community feel. Housing is very expensive.

Walkability: Kailua (Oahu) earns a walk score of 52, which means many daily errands can be completed on foot. Retirees living near the downtown core can walk to grocery stores, pharmacies, restaurants, and medical offices without needing a car for every trip.

Climate: Kailua (Oahu) has a tropical, trade winds climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.

With a cost of living index of 140 and a median home price of $1,150,000, Kailua (Oahu) runs above the national average in cost. Check our home affordability calculator to see how your retirement income translates in Kailua (Oahu), or review closing costs in Hawaii if you are planning a purchase.

Waimea (Kamuela)

Waimea sits in the Big Island’s upcountry at 2,700 feet and is the center of Hawaiian paniolo (cowboy) culture. Parker Ranch, one of the largest cattle ranches in the US, defines the landscape. North Hawaii Community Hospital provides local care. Temperatures are cooler — highs in the 70s, lows in the 50s — and the area has a rural, agricultural feel that is very different from beach-town Hawaii.

Walkability: Waimea (Kamuela) has a walk score of 25, which means a car is needed for most activities. Retirees should plan for reliable transportation. Several neighborhoods have sidewalks and short drives to shopping centers and medical facilities, but daily errands generally require a vehicle.

Climate: Waimea (Kamuela) has a tropical highland, cool climate.
The four-season climate provides variety throughout the year, with warm summers and cooler winters. Retirees who enjoy seasonal changes will appreciate the shifting market and recreational opportunities each season brings.

With a cost of living index of 115 and a median home price of $595,000, Waimea (Kamuela) runs above the national average in cost. Check our check your buying power to see how your retirement income translates in Waimea (Kamuela), or review closing costs in Hawaii if you are planning a purchase.

Tax Benefits for Retirees in Hawaii

Hawaii does not tax Social Security benefits, making it friendlier than average for retirees. Below is a summary of how Hawaii treats the major income sources retirees rely on.

Hawaii does not tax Social Security benefits. However, the state has a progressive income tax with rates ranging from 1.4% to 11%, with the top rate hitting at $200,000 for single filers. Pension income and retirement distributions are taxed as regular income. Property taxes are the lowest in the nation by rate — about 0.27% effective — but high home values mean the dollar amounts are significant. Seniors 65+ get an additional $40,000 homestead exemption (exact amounts vary by county). The general excise tax (GET) functions like a sales tax at 4%, plus a 0.5% county surcharge in Honolulu, but it applies to nearly all transactions including services.

Tax rules change regularly, and your specific situation — filing status, total income, and income sources — determines the actual impact. Consult a tax professional who knows Hawaii tax law before making a relocation decision based on taxes alone. For a side-by-side comparison with other states, visit our state tax comparison.

If you are buying property in Hawaii, factor in the closing costs and ongoing property tax obligations. The best mortgage lenders in Hawaii can help you find competitive rates if you need financing for your retirement home.

Healthcare Access in Hawaii

The Queens Medical Center in Honolulu is the state’s largest and most comprehensive hospital. Tripler Army Medical Center (open to military retirees and TRICARE beneficiaries) and Kapiolani Medical Center add depth on Oahu. Maui Memorial, Hilo Medical Center, Kona Community Hospital, and Wilcox Medical Center (Kauai) serve the neighbor islands. Complex cases often require transfer to Honolulu or, for highly specialized treatment, the mainland. Medicare Advantage penetration is about 36%, with plans from Kaiser Permanente Hawaii, HMSA, and UnitedHealthcare.

When evaluating healthcare for retirement, consider proximity to a hospital with emergency services, the availability of specialists you may need (cardiology, orthopedics, oncology), and the Medicare Advantage plan options in the county where you plan to live. Medicare Advantage plans can reduce out-of-pocket costs significantly, but network restrictions mean you need to verify that your preferred doctors and hospitals are in-network.

If you have a chronic condition or anticipate needing specialized care, prioritize cities near major medical centers. The cities listed above were selected partly for their healthcare access. Telehealth services have expanded across Hawaii, which helps retirees in smaller communities access specialists without traveling to metro areas for every appointment.

Prescription drug costs also vary by plan and pharmacy. Review Medicare Part D options during open enrollment each fall, and consider whether a Medigap (Medicare Supplement) policy fits your budget and healthcare usage patterns.

Cost of Living for Retirees in Hawaii

Retirement costs in Hawaii depend on where you live, whether you own your home outright, your healthcare needs, and your lifestyle. Below are estimated annual budgets for a single retiree and a retired couple living in a mid-cost area of the state with mortgage-free housing. Renters should add $8,000 to $18,000 per year depending on location and apartment size.

These estimates reflect a modest but comfortable lifestyle. Adding travel, dining out, hobbies, or long-term care insurance increases the total. Healthcare costs are the most unpredictable category — a single major medical event can add $5,000 to $15,000 in out-of-pocket expenses even with Medicare coverage.

Housing costs vary dramatically within Hawaii. The cities with higher CoL indexes in the table above will cost more for property taxes, insurance, and maintenance. If you are considering buying, use our payment calculator to estimate monthly payments, and check homeowner insurance costs in Hawaii to build an accurate budget.

For couples deciding between Hawaii and another state, the difference in annual costs can be $5,000 to $20,000 per year depending on tax savings, housing costs, and healthcare expenses. Run the numbers for both states before committing.

Frequently Asked Questions

Does Hawaii tax Social Security benefits?

No. Hawaii does not tax Social Security benefits at the state level. Other retirement income, such as pensions and 401(k) distributions, may be subject to the state income tax, though deductions and exemptions can reduce the amount owed.

What is the best city to retire in Hawaii?

Hilo consistently ranks among the top retirement destinations in Hawaii, offering a cost of living index of 120, a median home price of $425,000, and solid community infrastructure for retirees. However, the best city for you depends on what matters most: proximity to family, healthcare access, outdoor recreation, walkability, or affordability. Retirees who prioritize affordability may prefer one of the lower-CoL options listed above, while those focused on healthcare access should look at cities near major hospital systems.

How is healthcare access for retirees in Hawaii?

Healthcare access varies by region within Hawaii. Metro areas have multiple hospital systems, specialist practices, and Medicare Advantage plan options. Smaller cities and rural areas may have a single community hospital and limited specialist availability, which means traveling to a larger city for certain procedures. Check Medicare Advantage plan availability in the specific county where you plan to live before finalizing your decision.

How much does it cost to retire in Hawaii?

A single retiree can expect to spend roughly $44,000 per year in Hawaii, while a couple should budget approximately $68,000 per year. These figures assume mortgage-free housing in a mid-cost area of the state. Costs range widely — resort towns, coastal areas, and college towns tend to run 20% to 50% higher, while rural communities and smaller cities may run 10% to 20% lower. Housing, healthcare, and taxes are the three biggest variables.

Are there property tax breaks for seniors in Hawaii?

Hawaii does offer property tax relief programs for seniors, though the specific exemptions, income thresholds, and application processes vary by county and municipality. Common programs include homestead exemptions, assessment freezes for seniors over 65, and circuit-breaker credits that cap property taxes relative to income. Contact your county assessor’s office for current programs and application deadlines. Our Hawaii real estate guide covers property taxes and homeownership costs in more detail.

Retirement in Nearby States

If you are comparing Hawaii with neighboring states, these guides cover the same topics — top cities, tax benefits, healthcare access, and cost of living:

• Retiring in California: Taxes, Healthcare & Cost of Living (2026)
• Retiring in Alaska: Taxes, Healthcare & Cost of Living (2026)

For more on the Hawaii housing market, explore our Hawaii real estate guide, review homeowner insurance options in Hawaii, or use our check your buying power to see what you can buy on a retirement budget. If you are planning a move, the calculate your mortgage payment can help you estimate monthly payments on a new home.