I live in Tennessee, which has become a favorite retirement destination. In fact, Tennessee was rated the #5 place to retire by Kiplinger last year. And why not? It’s a beautiful state, and boasts 287.9 miles—more than 10%—of the total mileage of the Appalachian Trail. Lakes, rivers and golf courses are plentiful. The cost of living is 87.6% of the U.S. average, and it has no state income tax.
But it’s not for everyone. Mostly rural, there are just 6.5 million folks in the whole state, primarily in the larger cities of Nashville, Memphis, Knoxville and Chattanooga. That means if you aren’t near one of the bigger metro areas, you most likely won’t have a lot of cultural, entertainment attractions or restaurant and shopping options.
However, folks that love the outdoor life, golfing, minimal traffic and moderate weather love it—especially those who did their research, prior to retiring.
Important Points to Consider
You see, choosing the place in which you want to retire is not as simple as throwing a dart at a map of the U.S. (or even a foreign country). There are many factors to consider before you make that important decision, beginning with what is important to you. Before making the big move, you may want to consider:
Cost of living, including income and estate taxes. While you will probably have fewer expenses, you will most likely also be living on less income. And the old advice of planning to withdraw 4% of your assets every month during retirement has, honestly, not worked out that well for a lot of folks. When you have more time, you often find more things on which to spend your money! So, making sure you can afford your lifestyle in your designated retirement location is critical. When I lived in California, the ladies I took water aerobics with—all born and raised in San Jose—confessed that they would have to move to another state when they retired; they already knew they couldn’t afford to retire in the homes they had lived in for decades.
When calculating your estimated retirement outlays, don’t forget to evaluate renting vs. buying a home, and how many autos—if any—you will retain. Both of those choices will affect the type and cost of insurance you will require, as well as maintenance expenses.
You’ll also want to consider local, state and estate taxes. As shown in the box below, there are currently eight states in the U.S. that do not tax earned income. That can make a big difference in funding your lifestyle!
For example, if you currently live in Chicago, you are residing in the city with the highest combined state and local sales tax rates in the nation, according to the Tax Foundation. Chicagoans pay the city 1.25%, the county 1.75%, the transit authority 1% and the state 6.25% – for a total sales tax rate of 10.25%. Added to that, they pay a Cook County tax rate of 5.0%, higher than the U.S. average of 4.6%. And they are also subject to the Illinois flat individual income tax rate of 4.95%, no matter how much money they make.
Now compare that to where I live in Tennessee. We have a 9.75% sales tax; I pay no county or city taxes (other than property tax) and no state income tax. If retirement cost of living is a major concern, which place would you choose?
States with no Income Taxes
- New Hampshire
- South Dakota
The chart below illustrates the cities in the U.S. with the highest state and local sales tax rates.
Now, if you don’t want to have to roll up your sleeves and tackle a comprehensive study of which states provide the lowest overall cost of living, this calculator will help you immensely:
There are currently 32 states in the U.S. that do not levy estate or inheritance taxes. They are:
And here’s a link to 12 states that—in addition to Federal Estate Taxes—also impose state estate taxes.
Climate. Here in my town in Tennessee, our average year-round temperature is 55 degrees. We get about 56 inches of rain and some 13 inches of snow, on average, per year (although in the years I’ve lived here, I’ve never seen that much, and that suits me just fine!)
Climate can play a huge role in the enjoyment of your golden years. Cold, snowy, or rainy weather will keep you indoors (unless you are a cold weather enthusiast), and that can lead to adverse effects, such as loneliness and depression, which often accompany aging. As well, trying to traverse snow and ice can lead to medical mishaps.
To determine if the state you are considering retiring in has a suitable climate for you, take a look at this site which gives you the average temperatures and precipitation, state by state:
And here’s a link to the top 10 states with the best weather—based on comfortable temperatures, with daily highs averaging between 63 and 86 degrees Fahrenheit for seven or more months of the year, dry weather, at most 60 inches of rain a year, mainly clear skies, with sunshine for at least 60% of the time on a yearly average:
One caveat: The ratings do not consider the frequency of extreme events such as hurricanes, tornados or floods.
Healthcare. According to Fidelity Investments, it is estimated that a healthy couple retiring at age 65 this year will spend $285,000 on health-care expenses in retirement—$150,000 for women and $135,000 for men. And for many folks, proximity to good hospitals and medical providers is essential.
For many of us, in our early retirement years, we mostly need routine medical services. But, as we age, we may require significant additional services. So, if you don’t want to have to move twice as you age, you may want to consider including good healthcare as a priority when searching for a new home.
The Top 10 States with the Best Access to Healthcare
- New Hampshire
- Rhode Island
Here’s a link to the 100 top hospitals in the nations, based on:
- lower inpatient mortality, considering patient severity
- fewer patient complications
- delivered care that resulted in fewer HAIs (healthcare-associated infections)
- lower 30-day mortality and 30-day readmission rates
- sent patients home sooner
- provided faster emergency care
- kept expenses low, both in-hospital and through the aftercare process
- scored higher on patient ratings of their overall hospital experience
Transportation, Proximity to Airports. There’s certainly a trade-off here. Where I live, there is no public transportation and the two closest airports are 1 ¾-2 hours driving distance. If you don’t plan on keeping an automobile in retirement, you will need public transportation, although we do have Uber, even in our small town.
And for some retirees, travelling is a primary goal in their golden years, so driving this kind of distance to the airport may not be desirable. It may also be an issue if your relatives plan to make frequent visits to see you.
Recreational Activities. Consider your hobbies. How close do you want to be to your favorite pastimes like golf, boating, fishing, tennis, pickleball, or hiking?
My county is considered the ‘golf capital of Tennessee’, due to its 11 courses. We get tons of time share visitors who come just to play golf, and many of them retire here for the same reason.
Golf Digest recently rated the Top 100 Greatest Golf Courses: https://www.golfdigest.com/gallery/americas-100-greatest-golf-courses-ranking
Their rankings were based on:
1. Shot values
2. Resistance to scoring
3. Design variety
The Top 10 Golf Courses
- Pine Valley G.C., Pine Valley, NJ
- Augusta National G.C., Augusta, GA
- Cypress Point Club, Pebble Beach, CA
- Shinnecock Hills G.C., Southampton, NY
- Oakmont C.C., Oakmont, PA
- Merion G.C. (East), Ardmore, PA
- Pebble Beach G. Links, Pebble Beach, CA
- National G. Links Of America, Southampton, NY
- Sand Hills G.C., Mullen, NE
- Fishers Island Club, Fishers Island, NY
And if you are an avid follower of professional sports, you might want to live in these states:
Cultural Opportunities. If you love the theater, art museums, or concerts, you’ll probably want to be near these amenities. But note that you don’t always need to be in or near a big metropolis to enjoy these niceties. Local theater and art events can be found at most colleges and universities, as well as in many small communities.
Employment Availability. If you are not quite ready to completely retire, you may want to relocate in an area with a robust economy that offers significant employment opportunities.
USA Today recently published a report by 24/7 Wall St. that listed the states with the best and worst economies:
The Top 5 States with the Best Economies were:
4. New Hampshire
And the 5 States with the Worst Economies were:
46. New Mexico
50. West Virginia
Proximity to Family and Friends. In my grandparent’s generation, it was common for older folks to live with their children. But as we became more mobile, and young people pursued careers far from where they grew up, families were split, with parents and their children often living hundreds—if not thousands—of miles from each other.
A new study by Meyers Research sees that trend reversing somewhat when the parents retire. In fact, 25% of baby boomers are moving to be close to their adult children and grandchildren, sometimes to assist with child rearing, as well as financial support. Many times, that’s a second move for retirees. When their children begin having babies, grandparents often want to be close to participate more fully in their grandchildren’s activities. Although that isn’t always the final solution, as young folks may continue to move around as their careers progress, causing a dilemma for the parents who have followed them.
Contrary to what the media feeds us, only some 5% of retirees actually relocate for their golden years. That’s called the senior migration rate. And if you want to be included in that statistic and you are not moving to be near family (or to live with them), you will need to consider the senior living facilities in your expected location. And there’s a facility for just about everyone. In the U.S., there are 28,900 assisted living facilities with nearly 1 million beds, according to the National Center for Assisted Living. And they can serve from 10 to 100 residents, averaging 33.
Some questions to ask of the facilities you are investigating:
- Size and types of units available
- Are all rooms—and bathrooms—private?
- Are units with kitchens available?
- Does it offer specialized care for folks with Alzheimer’s?
- Is the facility equipped for the transition from senior living to assisted living to long-term nursing care?
There are several sources to find facilities, including your local or state Area Agency on Aging, the federal government’s Eldercare Locator https://eldercare.acl.gov/Public/Index.aspx, or 800-677-1116, or Argentum, https://www.argentum.org/, a trade association for senior living communities. Of course, a recommendation from relatives, neighbors, friends or medical providers is a great place to start.
Restaurants & Shopping. Do you like to eat out frequently, or spend your days at the local mall? Rural communities, usually, do not offer a lot of these options, so if they are important to you, you might need to live a bit closer to a metro area. And if you prefer to cook at home, consider how far away the local grocery stores are from your new home.
Political Climate. No matter in which direction your pollical views fall, if politics are important to you, you might want to reside in an area in which the majority of the people have similar political passions.
This map depicts the state of our political climate as of the 2016 elections.
Tying it all Together
For a quick and dirty evaluation of potential retirement locales, Market Watch has created a neat little research tool that looks at climate, crime rate and employment rate. You can find it here:
That’s a good place to start, then you can augment that research with the categories I’ve included above. And once you have narrowed down your options, make several visits to your favorite areas, during different seasons, attend some local events, and ask the residents what they feel are the pros and cons of living there.
Lots of Lists
Every year, a host of media outlets compile their “Best Places to Retire” lists, based on many of the factors I have outlined here. The results vary considerably, depending on the angle the reporter chose.
For your research and enjoyment, I’m including some of these lists here.
The 5 Most Fun Places to retire:
Methodology: the most attractions per capita for retirees
Taos, New Mexico
Art galleries per 10k people: 50.78
Movie theaters per 10k people: 5.25
Bowling establishments per 10k people: 1.75
Colleges and universities per 10k people: 5.25
The Taos Center for the Arts showcases art and shows independent films.
Art galleries per 10k people: 35.75
Movie theaters per 10k people: 0.99
Golf and country clubs per 10k people: 1.99
Tennis courts per 10k people: 1.99
Colleges and universities per 10k people: 3.97
If you’ve settled down to retire in Sedona, a stay at a resort might not seem feasible, so go for a day spa instead; the New Day Spa offers all sorts of holistic, exotic treatments like hot stone massage, and facials using the Pevonia Botanica line.
Art galleries per 10k people: 18.85
Movie theaters per 10k people: 5.66
Golf and country clubs per 10k people: 1.89
Tennis courts per 10k people: 1.89
Vail’s reputation as one of the U.S.’s ski capitals precedes itself, so before hitting the piste, pay homage to the grand sport by frequenting the Colorado Ski Museum, a must-visit place for what U.S. News & World Report coins those “powder hounds” amongst us.
Art galleries per 10k people: 3.72
Movie theaters per 10k people: 12.10
Bowling establishments per 10k people: 0.93
Golf and country clubs per 10k people: 2.79
Colleges and universities per 10k people: 2.79
Welcome aboard the Titanic. It’s the message bearing the name of the official Titanic Museum, dedicated to the vessel ship which lost more than 1,500 passengers after sinking on its 1912 maiden voyage. The museum hosts a number of seasonal and holiday musical events, but the piece de resistance is the chance to see the authentic Hartley violin, recused from the wreckage of the real Titanic.
Movie theaters per 10k people: 3.79
Bowling establishments per 10k people: 7.58
Colleges and universities per 10k people: 9.47
The other 45 “fun places” can be found here:
Money Magazine’s Top 8 Best Places to Retire in 2019
Methodology: places with populations above 50,000. They eliminated any location that had more than double the national crime risk, less than 85% of its state’s median household income, or a lack of ethnic diversity. They narrowed the list by putting the greatest weight on health and safety, cost of living, housing and economic factors, as well as the percentage of residents age 50 or above.
Catalina Foothills, Arizona
Population 50-plus: 54.5%
Days of sunshine a year: 284
Median home price: $349,974
A popular place for residents and visitors to hike, walk and enjoy the beauty of the Santa Catalina mountains. Catalina Foothills is a picturesque, traditional retiree destination filled with golf, sunsets and spas. Located just north of Tucson in Pima county, it draws over a million visitors a year. The area also has lots of high-end shopping at places like La Encantada; for deals, look no further than the Tucson Premium Outlets.
Palm Desert City, California
JW Marriott Desert Springs Resort and Spa in Palm Desert, California.
Population 50-plus: 54.2%
Days of sunshine a year: 263
Median home price: $334,398
Palm Desert City is situated in the Coachella Valley area, and is the place to be if you’re passionate about the arts and love perfect weather. A standout is the Sun City Palm Desert, a 55-plus gated community with 9,000 residents that offers huge a variety of activities and classes, the renowned Mountain Vista Golf Club, and more than 1,000 acres designed with waterfalls, bocce courts and jogging trails. And thanks to its Art in Public Places program, featuring a collection of over 150 pieces, the city boasts fantastic public art projects all year around. Tours of these exhibits are free.
West Bloomfield, Michigan
Population 50-plus: 45.8%
Days of sunshine a year: 180
Median home price: $276,018
Residents of West Bloomfield are a short 35 minute drive from Greenfield Village and The Henry Ford Museum, an 80 acre indoor and outdoor history museum complex. It’s an idyllic spot to consider if you picture your retirement overlooking calming shores and sunsets on the water.
Cass Lake, the largest of Oakland County’s more than 358 lakes, sits along the northern border of West Bloomfield. Neighboring Dodge State Park, a 139-acre recreation area, offers a variety of winter and summer activities.
Northfield Township, Illinois
Population 50-plus: 47.2%
Days of sunshine a year: 189
Median home price: $471,013
Only 25 miles north of Chicago sits the quiet and scenic Northfield Township.
Residents of Northfield Township can enjoy the sights of nearby Chicago Botanic Garden all year long. Courtesy of Chicago Botanic Garden. With a true suburban community feel, Northfield is filled with parks and outdoor golf clubs. Also nearby are nature preserves, lagoons, and Lake Michigan.
While the township’s median home price ranks highest on our list, those who can afford to live there will enjoy easy access to a major city by public transportation. The trip to Chicago by commuter rail takes a little over an hour and costs about $7 one way, full fare (those 65 and older are eligible to apply for reduced fare).
Bonita Springs, Florida
Population 50-plus: 57.1%
Days of sunshine a year: 249
Median home price: $333,373
If you like sunshine and volunteer opportunities, Bonita Springs City, Fla. offers both in abundance. Located on the southwest coast of Florida in Lee county, Bonita Springs boasts beautiful nature spots like Lovers Key State Park, a two-mile long beach on barrier islands that offers walking trails, kayaking and other activities. If you’re not a beach lover, the city’s downtown offers a hub of community activities like farmers markets, local concerts and seasonal festivals throughout the year.
The residents of Bonita Springs care about giving back, and philanthropy is a huge part of the community atmosphere. At the annual Southwest Florida Wine and Food Fest, you can help raise money for all kinds of charities or simply donate food to the Bonita Springs Assistance Center, which offers support to low-income seniors.
While Bonita Springs was hit relatively hard by Hurricane Irma in 2017, the city undertook extensive cleaning and rebuilding efforts, and has begun drainage and other projects to mitigate the effects of future flooding. Bonita Springs is also just a short drive to the bigger city of Naples, which is home to a large retiree community of its own.
Minnetonka City, Minnesota
Population 50-plus: 45.8%
Days of sunshine a year: 196
Median home price: $342,198
Relishing the snow, hearty Minnesotans ride fat tire bikes in 17 degree weather to raise funds for child medical grants during the UnitedHealthcare Children Foundation’s 2nd Annual Frosty Fat Tire Festival in Minnetonka Beach, just across the lake from Minnetonka in 2018.
Minnetonka offers an ideal balance between nature and a big city. Just 30 minutes away is Lake Minnetonka, where you can stroll through the 73-acre Noerenberg Gardens or take a bike ride, hike or horseback ride along the 63-mile Luce Line Trail. The line is a former railroad that ran across Minnesota in the early 1900s that was converted into nature trails.
The Ridgedale Center has more than 100 stores, several sit-down restaurants, and plenty of space for light exercise when the weather is bad. On nice days, you can take advantage of the 95-acre Big Willow Park and stroll on one of its easy trails. And for those who love to spend a day, or several, wandering through a bustling city, Minneapolis is a mere 20-minute drive away.
Georgetown City, Texas
Population 50-plus: 46.3%
Days of sunshine a year: 229
Median home price: $289,855
An effort to revitalize the town’s main square in the 1970s established a picture-perfect downtown and a community filled with well-preserved Victorian houses, landing Georgetown on the National Register of Historic Places. It’s also home to Southwestern University, the oldest university in Texas.
The town is famous for its miles of fields of red poppy flowers. It hosts the Red Poppy Festival each year, which attracts tens of thousands of people. Gardeners can even pick up your own poppy seeds at the Georgetown visitor center and grow your own blooms.
Another well-known feature of Georgetown you can enjoy as a retiree is Sun City Texas, the county’s largest retirement community. The sprawling property is home to around 11,500 residents and features resort-quality amenities, with six swimming pools and 12 tennis courts. There’s a community library and a farmer’s market every Tuesday morning. One of the perks?
It’s only 10 minutes from downtown and about 30 miles from Austin—so when you want a break from suburban living, there’s a diverse city close by to explore.
Clarkstown, New York
Population: 85, 092
Population 50-plus: 44.0%
Days of sunshine a year: 213
Median home price: $405,730
Want to retire to a place surrounded by nature, without sacrificing the amenities of a big city? Clarkstown, N.Y., can give you the best of both worlds. Located in Rockland County among a plethora of state parks, Clarkstown is roughly 30 miles from New York City.
But if you’re not an outdoor enthusiast, that’s okay too. Clarkstown is near the Palisades Center, which has all of your shopping, dining and entertainment needs. The center includes a 4-level shopping mall, 15 restaurants, a bowling alley, ice rink and comedy club.
History buffs won’t be disappointed, either: DeWint House, one of George Washington’s headquarters during the American Revolutionary War, is in nearby Tappan, N.Y. At Stony Point Battlefield State Historic Site, you can visit the location of one of the last battles of the war in the northeast. And for a true historic outing, enjoy brunch at Old 76 House, the oldest tavern in New York and a national landmark.
Bankrate.com Best & Worst Places to Retire
Bankrate.com ranked all 50 states, considering 11 public and private criteria that are significant in retirement, including weather, crime rates, cultural opportunities and—most important—affordability.
Here’s a look at their 5 Best and 5 Worst States for Retirement:
And to see the results for all 50 states, go here: https://www.bankrate.com/retirement/best-and-worst-states-for-retirement/
Bankrate.com also offers an interactive online tool—a map that you can click on to check out each state: https://best-retirement-states-widget.bankrate.com/
One Last Thought—Are you a Candidate for Retiring Abroad?
Retiring outside the U.S. is another possibility. It can make real financial sense, as the cost of living in some countries is considerably lower than at home. But the decision requires careful thought.
First, determine your suitability. Do you embrace change, speak another language, and are willing to live a possible long plane ride away from your family and friends? It’s a good idea to undertake a trial run, staying in your selected county for a few months before you move.
What are your top must-haves? These could include low cost of living, direct flights back to your friends and families, good health care, need for an automobile, a decent sized ex-pat community, and access to telephone and internet services.
Do you want to work? Working in a foreign country can be complicated, so make sure you find out the rules before you commit.
Research, research, research. You can find help on these websites recommended by Money Magazine: InternationalLiving.com, LiveandInvestOverseas.com, and ExpatInfoDesk.com for country-specific content. They also recommend Googling the country in which you are interested and include the terms “retire abroad,” “expat retiree,” or “expat blog.” Lastly, consult Expatistan.com and Numbeo.com to compare cost of living among countries.
If you decide to take the plunge:
Consider renting, as many countries restrict property purchases and long-term residence by foreign citizens. Also, real estate outside the U.S. can be very expensive, and handling contracts in a foreign language can be confusing—and costly.
Keep most of your money and your investments in the states, as banking can be more complex outside the U.S. and investing more expensive, in terms of fees and expenses. But you should have a local account, too, so that you are not killed with currency exchange and ATM fees. And, in most places, your Social Security funds can be transferred to your local bank.
Get a credit card that doesn’t have foreign transaction fees.
Since Medicare and many insurance companies won’t cover you in foreign countries, you’ll need to secure a healthcare policy, preferably a global insurance policy that will cover you in any country. Some countries subsidize healthcare costs, so that could be a plus.
Make sure your taxes are in order. If you are earning a high income in the foreign country, you could be subject to taxes on both ends. And double-check your estate plan. Even if you are residing in a foreign country at the time of your death, your last state of residence in the U.S. may tax your estate, especially if you still own property there.
GoBankingRates.com rates the following six countries as the Cheapest Countries in which to Live:
Hungary is 51% cheaper to live in Hungary than in New York City. Enjoy a meal out with a view overlooking the Danube River that’s 63% less pricey before heading back to your apartment where rent is just 15% of Big Apple prices. A bonus: Hungary is also one of the countries where citizens pay less in taxes than Americans.
In Nigeria, rents are 86% cheaper than in New York City and groceries are 64% less. From national parks with wide-open savannahs and towering mountains to a thriving Lagos nightlife, Nigeria is one of the cheapest countries to live and work.
Because it straddles the equator, Solinas-Ecuador encompasses diverse climates from the jungles of the Amazon to the Andes mountains. It’s also one of the countries with the cheapest cost of living. Rents are 89% less and a meal out costs just 30% of what you’d pay in the Manhattan.
You can live the Caribbean life you’ve always dreamed of when you move to an island or town along the Honduras coast. A bungalow costs 89% less than NYC prices, and the overall cost of living is 56% less.
The small island country of Taiwan is a shopper’s paradise because your money will go 6% further than New York. A bonus: Rents are just 15% of what you’d pay in the Big Apple.
As one of the countries with the cheapest cost of living, your budget stretches twice as far in Slovakia than it does in New York. Enjoy rents that are 81% cheaper and spend less time working and more time seeing the country’s many castles.
Most Expensive Countries to Live in
Whether you stay in the U.S. or go further afield, you can see that deciding where to retire is not a decision to be made lightly. But a little research can ensure that you spend your golden years in the place you want and enjoying your favorite activities.