Retirement represents a period of change. For most people, that means less income, but more time to do what they choose. One logical response to both: move to a place with lower costs and attractive lifestyle features–such as good weather, rich cultural and educational offerings, and ample opportunities to stay physically active and to engage in volunteer work.
With that in mind, Forbes presents our list of The 25 Best Places To Retire In 2016. This year’s picks are situated in 19 states across all four continental time zones. The list skews toward warm or moderate climates, in line with research by the National Association of Realtors and the U.S. Census showing baby boomers approaching retirement favor sunnier weather when they move. So four of our choices are in Florida, three in Texas and two in North Carolina. For those who like (or at least, can tolerate) especially hardy winters we include Fargo, N.D.; Pittsburgh and–a newcomer to our annual list–Traverse City, Mich.
Thanks to the aging of the Baby Boomers–that huge generation born between 1946 and 1964–there probably never has been more interest in retirement issues than now. Last year, there were 57 million Boomers age 55 or older. By 2020, when the youngest Boomers have passed the big 55, that number will swell to 71 million. Sure, saving for retirement is best approached as a lifelong affair. But 55 is the age at which many Americans start thinking seriously about when and where they’d like to retire.
To help you in those deliberations, we sifted through information on about 500 communities. Our primary objective: to identify places that provide what we think, all things considered, is the best retirement value. As in previous years, we didn’t rank our 25 picks. That means no place on this list can claim to be No. 1, but each can rightfully boast that Forbes considers it a terrific place to retire.
Some of the most significant factors in our rating are financial and economic, which is one of the reasons towns come and go from this list. Including Traverse City, an area of special beauty in the northern part of Michigan’s Lower Peninsula, 14 of the 2016 entries didn’t make the 2015 list, although some have been on our earlier-year or more specialized retirement place lists. The newbies include a trio in the Pacific Northwest: Corvallis, Ore.; Meridian, Idaho; and Walla Walla, Wash.
We compare the local cost of living and home prices with national norms. We also take into account the general state tax climate for retirees. Expenses (including high taxes) is the major reason we’ve selected so few locations in pricey places like the Northeast and California.
Since two-thirds of Americans now say they expect to work for pay at least part-time in retirement, we also look for places with low unemployment and a vibrant economy. Indeed, if you’re planning on moving to a new community, doing so before you fully retire will give you more years to make new friends, benefit from a moderate cost of living and enjoy what your new hometown has to offer.
To gauge cost of living, we generally use data from bestplaces.net. Home prices come from a number of sources, including quarterly reports of the Realtors and data on the websites trulia.com, zillow.com and coldwellbanker.com. According to the Realtors, the median national price of a single-family home is now $212,300, up 4.3% in a year. The average for the 25 on our list: only $184,000. That includes seven places at or below $150,000: Apache Junction, Ariz. ($129,000); Athens, Ga. ($145,000); Bella Vista, Ark. ($127,000); Grand Prairie, Tex. ($146,000); Largo, Fla. ($150,000); Mount Airy, N.C. ($126,000); and Pittsburgh, Pa. ($140,000). Only two are more than 15% above the national median: Corvallis ($280,000) and The Villages, in Florida ($260,000), which, thanks to retiring Boomers, ranked as the fastest-growing metropolitan area in the U.S. in 2013 and 2014.
Cost-of-living is expressed as an index, with 100 by definition being the national average. We tend to seek out places with indexes no higher than 105, but it’s not an absolute requirement. Three places top that: Corvallis, at 121, Bluffton, S.C., at 107, and Meridian, at 106. At the low cost end, five places have indexes less than 90: Abilene, Tex. (83), Bella Vista (88), Largo (87), Lincoln, Neb. (90) and Pittsburgh (84).
Even if you’re not planning on working in retirement, a robust economy is desirable, since it tends to raise home prices should you ever want, or need, to sell your home. So we take into account both unemployment rates, as compiled by the U.S. Bureau of Labor Statistics, and future growth prospects as gauged by a Milken Institute study of 401 metro areas. With the national unemployment rate a low 5%, no place on this list is above 5.3%. One, Fargo, is down to 1.8%.
Our consideration of a state’s tax climate for retirees takes into account the notion that what is low tax for retirees isn’t always the same as for working-age folks. Nine states don’t have a broad-based state income tax–Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. But such states tend to make up for that with other, higher, taxes, most notably, higher sales and real estate levies, which can hit seniors harder.
On the other hand, many states with income taxes give special breaks to retirees, such as light or no taxation of Social Security and pension benefits. We also consider state estate and inheritance taxes. When all is said and done, we figure the best states for retirees from a tax perspective are Alabama, Alaska, Arizona, Georgia, Idaho, Kentucky, Louisiana, Mississippi, Montana, New Hampshire, New Mexico, Nevada, Oklahoma, South Carolina, South Dakota, Utah and West Virginia. (This map shows our ratings of state retiree tax climate, including which are the worst.)
Since physical security is also important, we look at violent crime rates for cities and their surrounding metro areas, as reported by the Federal Bureau of Investigation or, in a few instances, www.neighborhoodscout.com. This has the effect of ruling out many big cities with rates above the national average (366 violent crimes for every 100,000 population). Because of its many other positive attributes, we include Pittsburgh, despite its relatively high crime rate.
Accessibility to health care is also important as you age. We use doctors per capita as a proxy, drawing data from the U.S. Census and the Dartmouth Atlas of Health Care. We also throw into the mix the latest Milken Institute report on Best Cities For Successful Aging. That study evaluates and ranks 352 metropolitan areas using a variety of factors, touching on health care, wellness, transportation, living arrangements and economics. We also look at air-quality data, as well as the general weather, although that is a little more subjective.
To round out our community assessments, we seek out data that reflect on attributes that encourage an active retirement. One is walkability–the ability to do shopping and perform errands by walking, but not too far–as measured by walkscore.com. Frankly, not much of the U.S. is conducive to this. But we find hope in a majority of the towns on this list: Athens; Blacksburg, Va.; Bluffton; Corvallis; Fargo; Largo; Lincoln; Lexington, KY; Mount Airy, N.C.; Pittsburgh, San Marcos, Tex.; Traverse City and Walla Walla.
Another element is volunteerism. Studies have shown that volunteers–those who perform unpaid activities for organizations–are more likely to have better health, as measured by life span, mobility and mental health. We use data compiled by the Corporation for National and Community Service and displayed at volunteeringinamerica.gov on the percent of the population that volunteers in a given locality. On our list the highest volunteerism scores are for Meridian, Fargo, Lexington, and Colorado Springs.
Obviously, a list like this can’t take into account every individual’s tastes and requirements, such as being close to family, which surveys show is right up there with cost when retirees decide where to live. Also, we don’t statistically factor in cultural attributes and scenic beauty. But to make the final cut on our list, towns must generally have something going for them besides the numbers. For example, 10 of our picks might be considered college towns, which usually translates into cultural and learning opportunities. This group consists of: Abilene (seven colleges); Athens (University of Georgia); Blacksburg (Virginia Tech); Columbia, Mo. (University of Missouri, Stephens College, Columbia College); Corvallis (Oregon State University); Lexington (University of Kentucky, Transylvania University); Lincoln (University of Nebraska); Pittsburgh (University of Pittsburgh, Carnegie Mellon University, Duquesne University, Chatham University); San Marcos (Texas State University) and Walla Walla (Whitman College, Walla Walla University).
And a fair number of our 25 offer inviting mountain or water environments, including Apache Junction; Bella Vista; Bluffton; Brevard, N.C.; Cape Coral, Fla.; Colorado Springs; Largo; Meridian; Mount Airy and Traverse City.
If a particular passion–say, theater, music, sailing, skiing or golf–is central to your retirement dreams, see our new list of 25 Great Places To Follow Your Passions In Retirement.
West Texas outpost, population 120,000, 150 miles west of Fort Worth. PROS: Robust economy, cost of living 17% below national average. Median home price $156,000 (national median: $213,000). Low rate of violent crime. High number of doctors per capita, extremely high rank on Milken Institute list of best cities for successful aging. Warm climate. Good air quality. Home to seven colleges. CON: Not very walkable. NOTED: Average state tax climate for retirees. On list last year. TRIVIA: Named for Abilene, Kan.
Apache Junction, Arizona
Growing suburb of 37,000 toward eastern end of Phoenix metro area. PROS: Good economy, cost of living 6% below national average. Good tax climate for retirees. Median home price $129,000. Low violent crime rate. Scenic terrain, including Superstition Mountain. Warm climate. CONS: Not very walkable, lackluster air quality. NOTED: Average physicians per capita. New to list. TRIVIA: Named for intersection with stagecoach route Apache Trail.
Classic college town (University of Georgia) of 120,000 70 miles east of Atlanta. PROS: Good economy. Cost of living 1% below U.S. average, median home price $145,000. Low serious crime rate. Extremely high Milken aging rank and walkability index. Good air quality. Warm climate. Good state tax climate for retirees. CON: None. NOTED: Average doctors per capita. On list last year. TRIVIA: Birthplace, in 1891, of America’s first garden club.
Bella Vista, Arkansas
Scenic Ozarks foothill town of 28,000 in northwest corner of Arkansas. PROS: Cost of living 12% below national average, median home price $127,000. Good economy. Very low serious crime rate. High number of doctors per capita, good rank on Milken best-aging list. Good air quality, warm climate. CON: Not very walkable. NOTED: Average state tax climate for retirees, New to list. TRIVIA: Originally a summer resort town.
A college town (Virginia Tech) of 44,000 in southwestern tail of Virginia. PROS: Economically robust. Median home price $230,000. Above average air quality. Low crime rate. High Milken aging rank. Somewhat walkable. CONS: None. NOTED: Cost of living 2% above national average. Average state tax climate for retirees and doctors per capita. Mild climate. On list last year. TRIVIA: Named two centuries ago for town’s founder.
Bluffton, South Carolina
Coastal village of 14,000 in South Carolina’s Low County west of Hilton Head and northeast of Savannah. PROS: Good economy, good state tax climate for retirees. Median home price $226,000. Warm climate, good air quality. Low serious crime rate. Highly walkable. CON: Cost of living 7% above national average. NOTED: Average doctors per capita. On list in 2014. TRIVIA: Town was early hotbed of secession sentiment before Civil War.
Brevard, North Carolina
Scenic town of 8,000, set amid waterfalls and mountains south of Asheville. PROS: Good economy. Cost of living 1 % below national average. Median home price $206,000. Above-average doctors per capita. Good climate and air quality. Low serious crime rate. CONS: Not very walkable. NOTED: Average state tax climate for retirees. On list in 2014. TRIVIA: Annual White Squirrel Festival in May celebrates unusual local rodents.
Cape Coral. Florida
Sun-drenched city of 166,000 set along Gulf of Mexico, near Fort Myers. PROS: Strong economy. Cost of living 4% below national average. Median home price $210,000. Low serious crime rate. Good weather and air quality. CONS: Low walkability, low Milken aging rank. NOTED: Average state tax climate for retirees. Average physicians per capita. On list last year. TRIVIA: City’s 400 miles of canals may be most in the world.
Inland city of 30,000 west of Orlando. PROS: Strong economy. Median home price $215,000. Good weather, good air quality. Low serious crime rate. CONS: Low Milken aging index, not very walkable. NOTED: Average state tax climate for retirees, average doctors per capita. Cost of living 2% above national average. New to list. TRIVIA: Local landmark is 226-foot-tall Florida Citrus Tower.
Colorado Springs, Colorado
Scenic outdoor playground of 440,000 population in shadow of Pikes Peak 60 miles south of Denver. PROS: Good economy, cost of living at national average. Median home price $243,000. Brisk weather, good air quality. Above-average Milken aging rank, high marks for volunteering. Very bikeable. CONS: Low walkability. NOTED: Average doctors per capital, serious crime rate, state tax climate for retirees. On list last year. TRIVIA: Breakfast food shredded wheat was invented in Colorado Springs.
For the full list, go to www.forbes.com/best-retirement-places.