Cost of Living in Alaska

By Jacqueline DeMarco

(Last Updated – 04/2025)

Alaska is a truly stunning place to live. Tourists travel from around the world to take in the natural splendor of the state. As amazing as those views are, many aren’t up for the challenges that come with living in Alaska.

One perk to help outweigh those challenges is the Permanent Fund Dividend program, which provides an annual dividend from investment earnings of mineral royalties to Alaska residents. In 2024, the dividend amount was $1,702. Not bad if you’re considering a move to the Last Frontier. Whether or not that dividend is enough to make up for the Alaska cost of living is another story.

So how much does it cost to live in Alaska? Keep reading to find out.

What’s the Average Cost of Living in Alaska?

Average Cost of Living in Alaska: $62,900 per year

Tighten up your monthly budget if you have your heart set on moving to Alaska. Data gathered by MERIC ranked Alaska as the state with the fifth highest cost of living. (Hawaii had the highest cost of living in the whole country.) To put a number on it, the average total personal consumption cost in Alaska is $62,900 per year, according to the latest data from the Bureau of Economic Analysis. Here’s how that spending breaks down.

Housing Costs in Alaska

Average Housing Costs in Alaska: $921 to $2,198 per month

Housing doesn’t come cheap in Alaska. The average home value in the state was $368,985 in February 2025, Zillow reported. That is comparable with $357,138, the average home value for all housing types in the U.S. that month, according to Zillow.

You won’t have many neighbors wherever you end up living in Alaska, as the population estimate is just 740,133, according to the most recent U.S. Census Bureau data available.

Here’s what housing looks like monthly, per census data:

•   Median monthly mortgage cost: $2,192

•   Median studio rent: $921

•   Median one-bedroom rent: $1,094

•   Median two-bedroom rent: $1,439

•   Median three-bedroom rent: $1,746

•   Median four-bedroom rent: $2,198

•   Median gross rent: $1,373

How much you’ll spend to live in Alaska will vary based on your specific location. These are the typical home values for major Alaska cities, from lowest to highest, according to Zillow in February 2025.

Utility Costs in Alaska

Average Utility Costs in Alaska: $516 per month

No matter where you live, you’ll need to have some room in your monthly budget to cover utility costs. Here’s what you can expect to spend in Alaska on a monthly basis.

Sources: U.S. Energy Information Administration, Electric Sales, Revenue, and Average Price; Statista.com, “Average monthly residential utility costs in the United States, by state”; DoxoInsights, U.S. Cable & Internet Market Size and Household Spending Report; and Rentcafe.com, What Is the Average Water Bill?

Groceries & Food

Average Grocery & Food Costs in Alaska: $400 per person, per month

If you really want to nail down your budget before you decide to make a move, it can help to get an idea of how much you’ll spend on food in Alaska.

As noted earlier, the Bureau of Economic Analysis estimates the average annual food cost per person to be $4,798, which equates to about $400 per person, per month. A family of four can expect to spend $1,600 a month on food, although children usually eat less, and appetites vary.

Because the specific area of Alaska you live in can affect food costs, let’s examine the Council for Community and Economic Research’s rankings for the food costs in major Alaska cities. The following rankings represent grocery costs, from lowest to highest.

Transportation

Average Transportation Costs in Alaska: $11,609 to $21,603 per year

Whether it’s commuting to work or schlepping your child to snowboarding, you’ve gotta get around. The specific transportation costs you’ll incur depend on how many adults and children are in your family, and how many of the adults are working — but here’s a basic breakdown, according to the most recent data from MIT’s Living Wage Calculator.

Health Care

Average Health Care Costs in Alaska: $13,015 per person, per year

The average annual per-capita cost of health care in Alaska is $13,015, according to the most recent Bureau of Economic Analysis Personal Consumption Expenditures by State report.

How much you will really end up spending depends on the type of coverage you have that year, your specific health care needs, and more.

Child Care

Average Child Care Costs in Alaska: $906 to $1,442 or more per child, per month

What you’ll spend on child care each month will greatly depend on how many children you have, what type of child care you choose, and where you live. In Alaska, it’s cheaper to choose home-based child care, whether you have infants or toddlers.

To learn more about how to obtain child care assistance for covering the costs of early childhood education, go to ChildCare.gov for resources you may find helpful.

This is what the average child care costs in Alaska, per the most recent data from CostofChildCare.org.

Taxes

Highest Marginal Tax Rate in Alaska: None

While residents of all states have to pay federal income tax, of course, Alaskans are off the hook when it comes to state income tax, as noted by the Tax Foundation’s State Individual Income Tax Rates and Brackets.

Other states that don’t charge state income tax are Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. The state of Washington also has no income tax, but does charge a capital gains tax on income of high-earning individuals. If you’re hoping to avoid a big bill come tax season, maybe a move to one of these states will ease your burden.

Miscellaneous Costs

Now that we’ve chatted about all of the necessary expenses you’ll encounter while living in Alaska, let’s look at some more exciting costs.

If the average Alaskan spends $34,904 a year on personal expenditures, where’s all that money going? Here’s a few potential places they’re spending on fun activities (costs are accurate as of March 2025):

•  Tickets to H2Oasis water park in Anchorage: $29.99 for anyone 13 and older, and $24.99 for kids 3 to 12.

•  The individual entrance fee to Denali National Park is $15 and good for seven days, or you can spend $45 on an annual pass that admits four adults for the year.

•  Tickets to the Alaska Zoo in Anchorage: $25 (nonresident adult, 16 and older) or $18 for an Alaska resident adult with state ID.

•  See the northern lights (aka the aurora borealis) if you time it right: Free. Or splurge on an all-inclusive wilderness lodge on Iniakuk Lake (about 200 miles north of Fairbanks) for 3-5 nights. Prices start at $9,895 per person.

•  A jug of Alaska wild-harvested birch syrup collected in the spring: $19.95 for 3.4 oz. from Kahiltna Birchworks

Of course, if you’re looking for a free activity, there are tons of great hiking, boating, and exploring opportunities in Alaska.

Recommended: The Average Monthly Expenses for One Person

How Much Money Do You Need to Live Comfortably in Alaska?

What it means to live comfortably will vary from person to person. Your family size, lifestyle choices, and other factors can affect how accessible a comfortable style of living is. Location also plays a role.

With that in mind, it’s worth noting that Alaska is considered to be one of the least affordable places to live in the United States. According to U.S. News & World Report’s Affordability Rankings, Alaska is the fifth least affordable state to live in.

That report measures the average cost of living in a given state against the average amount of money most households have. The low ranking isn’t much of a surprise, as the most recent MERIC data ranked Alaska as the state with the fifth highest cost of living.

What City Has the Lowest Cost of Living in Alaska?

As you’ve seen, living in Alaska can cost a pretty penny. Let’s take a closer look at the three major Alaska cities with the lowest cost of living, according to the Council for Community and Economic Research’s Cost of Living Index.