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Best Cities, States & Places

Why Lincoln, Neb., Is a Great Place to Retire

Located in the heart of the Midwest, Nebraska's capitol is a bustling city on the up-and-up.

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Population:
280,364

Nearby large city:
Omaha

What $300,000 will buy:
4-bedroom, 3-bath custom-built home with a 3-car garage in the Trendwood area

SLIDE SHOW: See Our Picks for 10 Great Places to Retire, 2017

Even if you’ve been con­centrating on beach or mountain locations for your retirement, don’t rule out America’s heartland. Located less than an hour’s drive from Omaha and about seven or eight hours’ drive from Chicago, Denver, Minneapolis and St. Louis, Lincoln attracts retirees who enjoy the outdoors as much as urban living.

Locals can spend time strolling through the Haymarket district, an old warehouse district that is now a popular area for shopping and dining. Or explore the new Railyard entertainment district, home to numerous live-entertainment venues and a public market. Catch a concert, Broadway show or performance by Lincoln’s Symphony Orchestra at Lied Center. Or check out what’s going on at the University of Nebraska–Lincoln or the Pinnacle Bank Arena, which hosts the college’s basketball games as well as a variety of entertainers—including recent shows by Billy Joel, the Red Hot Chili Peppers, and Tim McGraw and Faith Hill.

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And hit the brakes on those jokes about the prairie’s boring terrain. With 6,500 acres of parks and 1,475 acres of wilderness, nature lovers will find plenty to explore. The area’s flat geography is a boon for cyclists and runners alike. More than 130 miles of hiking and biking trails—more than half of which are commuter trails connecting various portions of the city—make it easy to stay active and even run some errands on two wheels.

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Much like Omaha to the north, Lincoln’s economy has seen rapid growth in recent years, driven by commercial development, several local hospitals and universities, and a growing number of entrepreneurs and start-up companies. The city boasts one of the lowest unemployment rates in the country.

Last year, the median sales price for a single-family home in Lincoln was $207,500, 7% higher than a year earlier; the median property tax for Lancaster County is $2,838. But with plenty of homes on the market, buyers typically have the upper hand. Retirees who prefer to be close to the city’s core may enjoy the apartments and condos in the Haymarket district. Those looking for a little more space often gravitate to the Country Club and Bishop Park neighborhoods south of downtown, or Eastridge, which has many single-story homes.

The Cornhusker State offers little in the way of tax breaks to retirees. Most retirement income, including pensions and retirement-account withdrawals, is taxed at ordinary income tax rates, which run as high as 6.84% for married couples filing jointly who earn more than $59,180 a year. Nebraska has an inheritance tax with rates ranging from 1% to 18%; assets inherited by spouses and charities are exempt. The total rate for state and local sales tax is 7.25%.

See Also: The State-by-State Guide to Taxes on Retirees