Best Places to Retire 2011

By Beth Braverman and Sarah Max

The single most effective move in making your retirement stash go further is, well, a move. "There's nothing more powerful than relocating from a high-cost-of-living area to a low-cost one," says Baltimore financial planner Tim Maurer.

If "low cost of living" conjures up visions of some bleak backwater, think again. MONEY combed its Best Places to Live database to find affordable cities and towns that offer lots to do, both inside and out. Places that are safe, with violent-crime rates below the national average. Where there's good medical care close at hand. And where at least 30% of the population is over the age of 50, so you'll have no shortage of golf or bridge partners.

The ten places you'll read about in the story that follows offer all that plus they're exceptionally kind to your wallet. Their cost-of-living indexes range from 87 to 97, meaning that as little as 87 cents buys residents what a dollar would buy the average American. Homes are affordable, with median prices below the $173,100 national median (some well below). And tax rates are reasonable, with either no state income tax or significant exemptions for retirees. Could one of these places be your new home?

Footnote: The nation's average cost of living index is 100; the lower a place's number, the less expensive it is. Median home price is for 2010. Source: OnBoard Informatics.

Marquette, Mich.

Photo: Dave Lauridsen


Population: 21,400
% over 50: 30%
Median home price: $145,000
Top state income tax: 4.35% (*Social Security and some pension income exempt)
Cost of living (as % of national median): 95%

As lovely as it sounds to sip margaritas on the beach, doing it year round can get old. This picturesque town on Michigan's Upper Peninsula offers outdoor fun for all seasons. With an average of 141 inches of snow a year, there's plenty of the white stuff for cross-country skiing and other winter sports. And when things warm up, you can grab a kayak and start paddling on Lake Superior.

And when outdoor activities grow tiresome, retirees can take advantage of a wealth of offerings at Northern Michigan University, in town. People 62 or older can attend classes free, and the affiliated Northern Center for Lifelong Learning offers low-cost diversions, from bird watching to dinner clubs.

If all that excitement causes heart palpitations, you're in the right place: Thomson Reuters ranks Marquette General Health System among the nation's top 50 cardiovascular hospitals.

Cape Coral, Fla.

Courtesy: Tarpon Point Marina

Population: 154,300
% over 50: 38%
Median home price: $95,000
Top state income tax: None
Cost of living (as % of national median): 96%

For retirees who are looking for lower taxes, cheap housing and a gentle climate, Cape Coral scores on all fronts. Home prices here, for example, have fallen more than 60% since the 2006 peak. For homebuyers, that means a lot of bang for the buck: A newly renovated three-bedroom, 1,800-square-foot house with a pool was recently bought here for $145,000.

Lots of Florida towns have seen dramatic price drops, of course, but Cape Coral has something else going for it: It's paradise for water lovers. The town is sliced with 400 miles of canals, half of which have access to the Gulf of Mexico, about 20 minutes away by boat.

This quiet place doesn't offer much nightlife. But there's a public golf course, a weekly farmers' market with live music, and a nearby outlet mall. Training camps for the Boston Red Sox and Minnesota Twins are just 15 minutes away.

Boise, Idaho

Photo: David R. Frazier


Population: 205,600
% over 50: 30%
Median home price: $120,000
Top state income tax: 7.8% (*Social Security exempt)
Cost of living (as % of national median): 97%

If you're the type who can't survive without your symphony, art, and theater fix, you may have resigned yourself to staying in some pricey coastal burg during retirement. Take a look at Idaho's capital city instead.

Granted, Boise is no Manhattan. But its thriving cultural scene includes an opera company, a philharmonic orchestra, and a ballet. At Boise Art Museum, which focuses on contemporary American art, you'll see works by Ansel Adams and Chuck Close.

Catch shows at Boise State University's Morrison Center for the Performing Arts, which hosts not only classical events but also touring Broadway shows and such boomer draws as Merle Haggard and Kris Kristofferson. Or hit the annual Shakespeare Festival at the city's 770-seat outdoor amphitheater.

Residents also enjoy all the outdoor activities you might expect of a city that's flanked by mountains and bisected by a river full of fish and that has a mild climate year round.

Another plus: Violent crime in Boise is little more than half the national average. That's a remarkable score for a city this size.

Danville, Ky.

Photo: Clay Jackson

Population: 16,200
% over 50: 37%
Median home price: $120,000
Top state income tax: 6% (*Social Security and up to $41,110 of retirement income exempt)
Cost of living (as % of national median): 93%

You can't stroll through this small town in horse country without feeling a strong connection to the past. A half-dozen different districts in Danville are listed on the National Register of Historic Places.

It was in Danville's Constitution Square that delegates assembled in 1792 to proclaim Kentucky the nation's 15th state. The original log post office dating from that same year still stands, as do many antebellum buildings. And there's plenty in the area to keep Civil War buffs happy, including nearby Perryville Battlefield, where Union and Confederate soldiers skirmished in 1862.

Expect plenty to do in the here and now, too. In the past 18 months, a new microbrewery and three new restaurants joined the art galleries and gift shops downtown. The Norton Center for the Performing Arts, at 190-year-old Centre College, offers many cultural events. In summer, Danville shows free outdoor movies each week; in fall it hosts an annual arts festival (with historic reenactments) that draws artists from all over the state.

Two more pluses: The area's regional medical center is right in town. And the urban amenities of Lexington and Louisville are a 40- and 90-minute drive away, respectively.

Weatherford, Texas

Photo: Megan Parks

Population: 25,200
% over 50: 31%
Median home price: $150,000
Top state income tax: None
Cost of living (as % of national median): 87%

As the Dallas/Fort Worth metro area expanded over the past couple of decades, many communities were overtaken by McMansions, shopping centers, and congestion. But Weatherford, 33 miles from Fort Worth, has maintained its own identity which is all wrapped up with horses. Specifically, cutting horses, which herd cattle and perform in exhibitions.

Dozens of professional trainers can be found here; residents can catch horse-cutting events at the nearby Silverado Arena or saddle up and canter out on the 26-mile trail that winds through the countryside.

Those not into equine pursuits can enjoy the laidback vibe of Weatherford's charming downtown, which includes a recently restored courthouse and boutique shops. There's also boating and fishing in Lake Weatherford though the severe drought conditions that have gripped much of the state this year have made such recreation difficult (and forced the town to impose limits on water usage).

Here you can live in a Victorian house or on a sprawling ranch. The affordable wide-open spaces, plus the lack of state income tax, are a big draw for retirees.

Southaven, Miss.

Courtesy: City of Southaven


Population: 49,000
% over 50: 28%
Median home price: $145,000
Top state income tax: 5%
Cost of living (as % of national median): 88

This vibrant little city is a suburb of Memphis, but since it's located on the Mississippi side of the state line it offers some unique tax perks: For homeowners 65 or older, the first $75,000 of a primary home's market value is exempt from property taxes. Not bad, considering you can find a great rambler for less than $150,000. Meanwhile, qualified retirement income and Social Security income is exempt from state taxes.

But Southaven is more than just a tax haven. It's also a regional hub for medical care, thanks to its state-of-the-art, 339-bed Baptist Memorial Hospital-DeSoto.

Of course, a town can't be located that close to Memphis without offering something for music lovers. Southaven's DeSoto Civic Center and Snowden Grove Amphitheatre are a destination for big-time music and entertainment acts. If that isn't enough then it's always an easy drive to the blues clubs on Beale Street or the northern tip of the famous Mississippi Blues Trail.

Clarksville, Tenn.

Courtesy: Clarksville-Montgomery County EDC

Population: 132,900
% over 50: 22%
Median home price: $136,000
Top state income tax: None (*Salaries, wages, Social Security, IRAs and pension income are not taxed. However, a 6% tax is levied on stock dividends and interest from bonds and other obligations.)
Cost of living index (as % of national median): 88

This charming city near the Kentucky border boasts many grand 19th-century homes and historic buildings, but it isn't stuck in the past. Clarksville's three-year-old, 270-bed Gateway Medical Center offers cutting-edge specialty care in dozens of practice areas, from cardiology to oncology.

Home to Austin Peay State University, the city has a thriving arts scene, both on and off campus. Outdoor enthusiasts can cruise the Cumberland River or explore more than a dozen walking trails and state parks.

Small cities with so much to offer usually come at a premium. Yet retirees looking to downsize will be pleasantly surprised by the region's low cost of living. Spacious new brick homes here sell for less than $150,000. Plus, there are no state taxes levied on Social Security, salaries, wages, IRAs, or pension income.

Broken Arrow, Okla.

Courtesy: Lake Charles Convention & Visitors Bureau


Population: 98,900
% over 50: 26%
Median home price: $145,000
Top state income tax: 5.5%
Cost of living index (as % of national median): 88

This Tulsa suburb is far from a sleepy bedroom community.

In the past few years alone, Broken Arrow has seen some notable new developments, including the opening of a 20,000-square-foot YMCA with many programs geared toward active older adults; an impressive performing arts center that raises its curtain for everything from the local orchestra to Broadway tours; and a 68-bed hospital within the highly acclaimed St. John Health System. A half a dozen golf courses, miles of bike and walking paths, two community centers, and civic groups galore add to the attraction.

And with updated one-story homes starting in the low $100,000s, you'd be paying about half what you would to move to some comparable communities.

Lake Charles, La.


Population: 72,000
% over 50: 34%
Median home price: $124,000
Top state income tax: 6%
Cost of living index (as % of national median): 91

Leisure time in Lake Charles largely revolves around its eponymous lake, which boasts a sandy beach and waterfront promenade. Throughout the year, the lake is the backdrop for boat parades, firework displays, and festivals celebrating everything from Cajun culture to pirate lore. (The city hosts more than 75 festivals each year.)

Lake Charles is also a regional hub for retailers, academia, medical care and the arts. McNeese State University's "leisure learning" program offers classes and lectures in everything from cooking dim sum to writing short stories. The university's new $16 million Shearman Fine Arts Building, meanwhile, is a notable addition to Lake Charles' robust performing arts community, which includes a symphony, civic ballet, and children's theater company, to name a few.

What's not to like? The city is 30 miles upriver from the Gulf of Mexico, making it vulnerable to hurricanes and floods.

Winston-Salem, N.C.

Courtesy: VisitWinstonSalem/Wachovia


Population: 229,600
% over 50: 34%
Median home price: $133,000
Top state income tax: 7.75%
Cost of living index (as % of national median): 91

Winston-Salem may be known for its close ties to the tobacco industry, but over the past decade the high-tech sector has helped breathe new life into this central North Carolina city.

For retirees, this economic renaissance has translated into a cultural renaissance, complete with a bustling downtown art district, live music events several nights a week, and an internationally recognized film festival.

Winston-Salem has a longstanding tradition supporting the arts. Its symphony, founded in 1947, is the oldest in the state; its arts council was the first in the nation; and the University of North Carolina School of the Arts is among one of the most prestigious in the country.




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