The Best Places for Retirement

/ BY / Personal Finance

Where do you want to live when you retire? Although many of us dream of an oceanfront condo or a cozy mountain retreat, the reality is that there are many factors that determine where we end up living when we stop working. They include not only how much money we have saved and how much it costs to live in a certain area, but also the access to health care, shopping, entertainment, transportation and other services.

We decided to take a look around the Web to see which cities and states financial experts recommend for retirement—and which they advise retirees to avoid. The lists can be very different, based on what the experts consider most important to retirees. Remember, those same criteria may not be important to you, so keep your own personal likes and desires in mind when looking for your retirement home.

Affordable Choices

Kiplinger selected its ten best retirement cities based on the cost-of-living index, tax perks (such as exemptions on retirement income) and low state taxes:

  1. Birmingham Alabama
  2. Tucson, Arizona
  3. Winston-Salem, North Carolina
  4. Manchester, New Hampshire
  5. New Orleans, Louisiana
  6. Spokane, Washington
  7. Charleston, South Carolina
  8. Knoxville, Tennessee
  9. Pal Bay, Florida
  10. St. Louis, Missouri

AARP focused not only on affordability -- housing prices, property and sales tax rates, and taxes on Social Security and pensions—but also on climate, recreation and culture. It suggested these areas:

  1. Harrisburg, Pennsylvania
  2. Midland, Texas
  3. Winchester, Virginia
  4. Portland, Maine
  5. Gainesville, Georgia
  6. Wenatchee, Washington
  7. Tulsa, Oklahoma
  8. Cheyenne, Wyoming
  9. Columbus, Indiana
  10. Ithaca, New York

Amenities and opportunities

U.S. News and World Reports looked at 10 different attributes that make a location a good retirement home. Their picks include (in no particular order):

  1. Flagstaff, Arizona (best year-round weather)
  2. Boone, North Carolina (affordable mountain town)
  3. Traverse City, Michigan (water views on a budget)
  4. Walnut Creek, California (city with easy access to wilderness)
  5. Ithaca, New York (college town with continuing education opportunities and scenic beauty)
  6. Lincoln, Nebraska (good place to launch second career)
  7. Pittsburgh, Pennsylvania (affordable with many amenities)
  8. Port Charlotte, Florida (very affordable housing with water access)
  9. Pittsfield, Massachusetts (good dating opportunities for single retirees)
  10. Santa Fe, New Mexico (outstanding recreation and culture)

Money Magazine chose 25 best places to retire, divided into four categories, based on reasonably priced homes, low crime and tax rates, quality health care, and ambiance:

Big cities:

  1. Albuquerque, New Mexico
  2. Portland, Oregon
  3. Louisville, Kentucky
  4. Tucson, Arizona
  5. Austin, Texas
  6. Winston-Salem, North Carolina

Resort areas:

  1. St. George, Utah
  2. Traverse City, Michigan
  3. Coeur d’Alene, Idaho
  4. St. Augustine, Florida
  5. Kalispell, Montana
  6. Sevierville, Tennessee
  7. Fredericksburg, Texas

College towns:

  1. Bellingham, Washington
  2. Bloomington, Indiana
  3. Huntsville, Alabama
  4. Lynchburg, Virginia
  5. Iowa City, Iowa
  6. Athens, Georgia

Small town:

  1. Danville, Kentucky
  2. Fort Payne, Alabama
  3. Prescott, Arizona
  4. Aberdeen, South Dakota
  5. Summerville, South Carolina
  6. Ottawa, Kansas

Low taxes

Money Magazine also found 12 states that don’t assess taxes on pensions or Social Security—a major consideration if money will be tight:

  1. Alabama
  2. Alaska
  3. Florida
  4. Mississippi
  5. Nevada
  6. New Hampshire
  7. Pennsylvania
  8. South Dakota
  9. Tennessee
  10. Texas
  11. Washington
  12. Wyoming

Retirement spots to avoid

Finding the best place to retire also means knowing which states you should probably avoid. Here are Daily Finance’s listings, which they based on the states’ fiscal health, property taxes, income taxes, cost of living and climate:

  1. Connecticut (high property and income taxes, high cost of living)
  2. Illinois (state budget problems, high unemployment, recently increased income tax)
  3. Rhode Island (state budget deficits, underfunded state pensions, high tax rates)
  4. Vermont (high property and income taxes, high cost of living)
  5. Massachusetts (high property taxes and flat rate on earnings)
  6. New Jersey (highest median property taxes and income taxes in the country)
  7. Minnesota (heavy tax burden on retirees)
  8. New York (high property taxes, weather, cost of living)
  9. Maine (high property taxes)
  10. Wisconsin (high property and income taxes)
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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.