Cost of Living in Alaska

(Last Updated – 11/2021)

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. 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: $48,739 per year

Tighten up your monthly budget if you have your heart set on moving to Alaska. Data gathered by MERIC in the third quarter of 2021 ranked Alaska as the state with the seventh 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 $48,739 per year, according to 2020 data from the Bureau of Economic Analysis . Here’s how that spending breaks down.

Category	Average Annual Per-Capita Cost in Alaska
Housing and Utilities	$8,530
Health Care	$10,483
Food and Beverages (non-restaurant)	$4,042
Gas and Energy Goods	$603
All Other Personal Expenditures	$25,081

Housing Costs in Alaska

Average Housing Costs in Alaska: $806 to $1,933 per month

Housing doesn’t come cheap in Alaska. The median sales price was $335,000 in October 2021, Redfin reported. That compares with $353,900, the median existing-home price for all housing types that month, according to the National Association of Realtors®.

You won’t have many neighbors wherever you end up living in Alaska, as the population was just 731,545 in 2019, according to the most recent U.S. Census Bureau data available.

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

•  Median monthly mortgage cost: $1,933

•  Median studio rent: $806

•  Median one-bedroom rent: $985

•  Median two-bedroom rent: $977

•  Median three-bedroom rent: $1,102

•  Median four-bedroom rent: $1,377

•  Median gross rent: $1,201

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, according to Zillow, in September 2021 (or August 2021, when starred).

Alaska City	Typical Home Price
Anchorage	$324,858
Fairbanks	$255,037
Juneau	$417,036*
Ketchikan	$329,137

Utility Costs in Alaska

Average Utility Costs in Alaska: $411 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.

Utility	Average Alaska Bill
Electricity	$125
Gas	$70
Cable & Internet	$148
Water	$68

Sources: U.S. Energy Information Administration, Electric Sales, Revenue, and Average Price, 2021; Inspirecleanenergy.com; DoxoInsights, U.S. Cable & Internet Market Size and Household Spending Report 2021; and Rentcafe.com, What Is the Average Water Bill?

Groceries & Food

Average Grocery & Food Costs in Alaska: $337 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 $4,042, which equates to about $337 per person, per month. A family of four can expect to spend $1,347 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 for the second quarter of 2021, from lowest to highest.

Alaska City	Grocery Items Index
Anchorage	123.1
Fairbanks	124.8
Juneau	145.0
Kodiak	147.8

Transportation

Average Transportation Costs in Alaska: $4,900 to $13,317 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 in your family, and how many of the adults are working — but here’s a basic breakdown, according to MIT’s Living Wage Calculator .

Family Makeup	Average Annual Transportation Cost
One adult, no children	$4,900
Two working adults, no children	$8,987
Two working adults, two children	$13,317

Health Care

Average Health Care Costs in Alaska: $10,483 per person, per year

The average annual per-capita cost of health care in Alaska is $10,483, according to the 2020 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 2021 data from costofchildcare.org .

Type of Child Care	Average Cost Per Month, Per Child
Infant Classroom	$1,442
Toddler Classroom	$1,299
Home-based Family Child Care	$906

Taxes

Highest Marginal Tax Rate in Alaska: 7.15%

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
for 2021 .

Other states that don’t charge state income tax are Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. 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 $25,081 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 Nov. 11, 2021):

•  Tickets to H2Oasis water park in Anchorage: $24.99 for anyone 13 and older and $19.99 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 range from free (under 2) to $17 (nonresident adult) depending on age.

Of course, if you’re looking for a free activity, there are tons of great hiking opportunities in Alaska when the weather permits.

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 fourth 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 2021 MERIC data ranked Alaska as the state with the seventh 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 for the second quarter of 2021.

Anchorage

The major Alaskan city with the lowest cost-of-living index (122.9) is the famous city of Anchorage, known for outdoor activities such as hiking, canoeing, and biking. The city also has plenty of arts and entertainment opportunities as well.

Fairbanks

While Fairbanks is one of the more affordable places to live in Alaska (cost-of-living index of 127.2), it’s a fairly small city. Fairbanks was home to 96,849 residents as of 2019, census data shows.

Kodiak

Did you know you can enjoy island life in Alaska? With a cost-of-living index of 125.1, Kodiak is one of the more affordable Alaskan cities to live in. Kodiak is on Kodiak Island, which is more than 100 miles long and is the second-largest island in the United States. Residents know the island as the Emerald Isle as it’s a gorgeous island full of nature.