Best Places to Retire

Many retirees view retirement as an opportunity to forge a new life for themselves, which often involves a geographical move. When you retire, you may want to head south to a warmer climate or perhaps you want to live in a big city with easy access to museums, plays and concerts, and the best restaurants. These are the typical questions you'll want to consider when planning where you'll live in retirement. To find the right place to fit your lifestyle and budget, spend some time researching the characteristics of each location and exploring the area in person to get a real feel for it. Here's a checklist of things to consider when picking a new retirement location. 

Consider the cost of living

How much it costs to live in a particular city and/or state can vary greatly in the United States. A few online cost of living calculators let you compare your current salary where you live to the average income in another location. A handy research tool is the Bankrate.com cost of living comparison calculator, which provides a list of products and services that people commonly use such as home prices, medications and groceries. This information can help you determine if a location will fit your budget. 

Think about taxes

The Federation of Tax Administrators' tables of income tax rates show that this cost can vary greatly from state to state as well. Keep in mind that the lack of a state income tax doesn’t mean that state has a low total tax burden. According to the Retirement Living Information Center, higher sales taxes and property taxes can more than offset the lack of a state income tax. For retirees, a key consideration is whether retirement income is taxed. For example, Washington D.C. and 27 other states with income taxes have a full exclusion for Social Security benefits; make sure you know whether the state you’re interested in is on this list. Another consideration for retirees is property taxes. According to the Retirement Living Information Center, most states give residents over a certain age a break on their property taxes. 

Plan for health care

According to a study by the Employee Benefit Research Institute, a 65-year-old couple will need an estimated $305,000 to pay for all out-of-pocket medical costs throughout their retirement (assuming the couple signs up for Medicare at age 65 and has no employer-provided retiree health insurance). Check the U.S. News Best Hospitals report to see if the town or city you're interested in has good hospitals and medical facilities. If you have a company-sponsored health plan, make sure there are doctors in the area that accept your health insurance. 

Consider your lifestyle

Think about the lifestyle you want when you're retired. Will you want to go trail hiking or biking, play golf or tennis, and be active outdoors? Or would you prefer relaxing on the beach or at a lake? Do you like to live in or near a fast-paced city or a mellow small town? These answers will help you narrow your search for your retirement locale. You can find information about the area at visitor centers, by asking local residents about what their area offers, and online searches. 

Access to cultural and sports activities

If you're a sports fan, you might want to be near a major stadium to attend sporting events. Likewise, if you're passionate about the theater or art and cultural exhibits, you'll want your new location to have a variety of different venues and amenities from which to choose. Many retirees are considering small- to medium-sized university towns for these reasons, as well as for access to educational facilities. In fact, many universities have programs with reduced or free tuition for seniors.

Availability of transportation

Those fond of traveling will want a major airport within an hour’s drive of their town or city. Public transportation may also be a factor as it is a convenient and cost effective way to get around town. A 2011 report by the AARP found that Americans 65 years and older are using public transportation more, mainly because of the higher gasoline prices as well as the increased government funding that has improved bus and rail services. In fact, the study found that between 2001-2009, there was a 40 percent jump in public transportation use among older Americans. 

Demographic mix

What is the demographic make-up of your potentially new living location? Is it full of young families or empty nesters? According to the 2010 Census survey, Scottsdale, Ariz., has the oldest citizens, with a median age of 45.4, of any city in the United States with a population of 100,000 or more. In comparison, Florida has five cities with an older population as well as two cities with the youngest median age as the result of several large colleges and universities in the state, making this a very mixed demographic state. 

Proximity to family and friends

Do you currently live close to family or are you involved and invested within your community? Do you currently have a close network of friends in your town or city? If you decide to move many states away, you might want to think about how the potential separation will affect your family and existing social relationships. 

The social implications are a major consideration. Create a vision of what you want most in a retirement location and start exploring. Take your time to get all the answers and visit the places you're most interested in. Before making a final decision, spend at least a week in your first and second choice locations to get a real feel for the day-to-day living there. 

Of course, there's no one perfect place for everyone, but if you examine your needs and take your time, you may find your dream retirement place. 

What to do next

  • Spend time thinking what locations may fit with your vision for retirement.
  • Research the costs of living and what the various communities offer.
  • Explore potential locations to get a feel for how they fit your lifestyle choice.
  • Once you’ve decided, make sure to meet with an investment advisor to make sure you have a plan to get you there.
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