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All Contents © 2018The Kiplinger Washington Editors
By Stacy Rapacon, Online Editor
| Originally Published January 2016
The southern states can give you a lot of comfort in your retirement. In many desirable locations, the mild climate and natural offerings can help get you out and active all year long. You can also enjoy lower-than-average living costs and great tax advantages in the majority of destinations in both the southwest and southeast regions of the U.S.
Check out these 12 great places to retire in the South and consider whether you might want to head to one of them for your own retirement.
Estimates of living costs for retirees, where available, come from the Council for Community and Economic Research. Populations and median home values are from the U.S. Census Bureau. Estimates of states' average lifetime health care costs during retirement for couples retiring at 65 are from HealthView Services. Tax rankings are based on Kiplinger's Retiree Tax Map, which divides states into five categories: Most Tax-Friendly, Tax-Friendly, Mixed, Not Tax-Friendly and Least Tax-Friendly. Crime statistics are from the FBI. Retirement destinations are listed in alphabetical order by state.
MPearsallArt via Wikimedia Commons
Cost of living for retirees: 11.0% below U.S. average
Share of population 65+: 14.5% (U.S.: 14.5%)
Alabama's tax rating for retirees: Tax-Friendly
Lifetime health care costs for a retired couple: Below average at $364,860 (U.S.: $394,954)
The Heart of Dixie offers many great spots for affordable living, but Decatur is among our picks for the cheapest places where you'll want to retire. While the median home value is $176,700 for the nation as a whole, it's just $122,500 in Alabama and $120,400 in Decatur. The Tennessee River offers inexpensive options for outdoor recreation, including some of the state's best bass fishing in Wheeler Lake.
The tax situation is equally attractive. Alabama doesn't tax Social Security and most pension income, and homeowners 65 and older are exempt from state property taxes (and some, if not all, local property taxes).
Cost of living for retirees: 3.7% below U.S. average
Share of population 65+: 30.8%
Arizona's tax rating for retirees: Most Tax-Friendly
Lifetime health care costs for a retired couple: Below average at $378,205
Undoubtedly, many of you have considered the Grand Canyon State for its retiree-friendly climate and beautiful natural setting. Plus, the tax situation is equally attractive. With its low income taxes and lack of state taxes on Social Security, Arizona is among the 10 most tax-friendly states for retirees.
Prescott, about 100 miles north of Phoenix, eases the stress on your retirement kitty even more with its below-average living costs. In fact, we named the city one of the cheapest places where you'll want to retire. But affordable doesn't mean boring. Prescott offers an active cultural scene with numerous theaters, galleries and music venues, as well as a wealth of things to do outdoors, including golfing and hiking.
Cost of living for retirees: 7.5% below U.S. average
Share of population 65+: 21.3%
Arkansas's tax rating for retirees: Tax-Friendly
Lifetime health care costs for a retired couple: Below average at $355,695
You won't need to travel far for rest and relaxation if you settle in this retirement hotspot. Surrounding the north end of the city of Hot Springs is Hot Springs National Park, which has 47 hot springs that come out of the mountain of the same name and two bathhouses, where you can drink from fountains and soak in the water. The relaxing experience extends into the city proper, where there are many spa and massage services to choose from. You can also unwind by golfing at one of the area's 11 championship courses or by fishing or boating on one of the three local lakes.
Even your wallet can de-stress. Housing and health care for retirees are particularly low, at 24.1% and 12.2% below the national average, respectively. The median home value in Hot Springs, about 60 miles southwest of Little Rock, is $115,600—far below the national median of $176,700.
Courtesy VISIT FLORIDA
Cost of living for retirees: 5.2% below U.S. average
Share of population 65+: 47.9%
Florida's tax rating for retirees: Most Tax-Friendly
Lifetime health care costs for a retired couple: Above average at $409,097
With its desirable climate and favorable tax status, Florida is filled with popular retirement destinations. Punta Gorda consistently ranks as one of the best. (It was among our top picks for cheapest places where you'll want to retire.) Because nearly half of its residents are age 65 and older, the city is wise to recognize its strong senior presence and do all it can to satisfy them. You can find numerous retirement communities, restricted to people age 55 and older, that offer waterfront sites, golfing, fishing and other activities. In town, the Harborwalk along Charlotte Harbor is just a portion of the 18 miles of bike trails and pedestrian pathways you can enjoy.
For more amenities, including many restaurants and a lively arts scene, Sarasota is a little more than 50 miles away on the Gulf coast and is another great place to retire.
Courtesy Sandy Springs Hospitality & Tourism
Cost of living for retirees: 5.1% below U.S. average*
Share of population 65+: 10.8%
Georgia's tax rating for retirees: Most Tax-Friendly
Lifetime health care costs for a retired couple: Below average at $376,884
A suburb of Atlanta, Sandy Springs (population: 102,000) offers small-city comforts with close proximity to big-city attractions. Outdoor enthusiasts can enjoy area birding and fishing, as well as 22 miles of shoreline along the Chattahoochee River.
Under construction is a new walkable city center named City Springs, with plans to include a performing arts center, family theater and park, as well as restaurants, retailers and housing. Groundbreaking on the site was in 2015, and the development is slated for completion in late 2017 or early 2018. In the meantime, you can take a Marta train to downtown Atlanta's Five Points neighborhood. The ride costs just $2.50 and takes less than 40 minutes.
*Based on cost of living for retirees in the nearby Marietta metro area
Cost of living for retirees: 4.3% below U.S. average
Share of population 65+: 10.9%
Louisiana's tax rating for retirees: Most Tax-Friendly
Lifetime health care costs for a retired couple: About average at $395,452
Pleasure-seeking retirees can find a lot to satisfy them in the Big Easy. The unique cultures, delicious foods and signature music are big draws. The city offers brass band parades and festivals throughout the year, including the hugely famous jazz fest.
Considering New Orleans is a world-renowned convention and tourism destination, the cost of living for residents is surprisingly reasonable. So, too, are taxes on retirees, explaining why Louisiana ranks as one of our 10 most tax-friendly states for retirees. The city's median home value is $183,700, slightly higher than the national median of $176,700, though it might be worth it to pay a bit more to live in nearby Metairie (where the median home value is $209,500). The New Orleans suburb offers greater safety and a higher share of seniors, who make up 17.1% of the population.
SEE ALSO: Great Places to Retire in All 50 States
Cost of living for retirees: not available
Share of population 65+: 10.5%
Mississippi's tax rating for retirees: Most Tax-Friendly
Lifetime health care costs for a retired couple: Below average at $379,852
Ole Miss can breathe new life into your retirement. Hometown Mississippi Retirement, the state's official retiree attraction program, has designated Oxford a certified retirement city, which required a three-month evaluation that assessed its affordability, safety, access to quality medical care and abundance of recreational opportunities. Housing in the city can be expensive; the median home value is $224,100, much more than the state's median of $99,900. But the Magnolia State's tax situation is one of the nation's friendliest for retirees.
The University of Mississippi makes Oxford a great college town to retire to. You can enjoy football and other sporting events (plus tailgating), musical and theater performances, and academic pursuits. Residents 65 and older can take one university course per semester free. Or you can take your education to go with the academic traveler program, which organizes weeklong, faculty-led trips several times a year.
Share of population 65+: 17.6%
New Mexico's tax rating for retirees: Mixed
Lifetime health care costs for a retired couple: Below average at $348,002
Sunny Santa Fe would be nice for your retirement. The city is close to the Sangre de Cristo Mountains, which provide a great site for hiking and biking for the majority of the year. In winter, ski slopes are just 35 minutes or less away. And indoor entertainment abounds, with 250 art galleries, 12 museums and a downtown full of shops and restaurants.
Affordability may be the area's dark cloud. Overall, the Land of Enchantment has a cost of living that's slightly above average, which contributed to making New Mexico one of our worst states for retirement. Specifically in Santa Fe, the median home value is $282,400, much higher than the state's median of $160,000 and the nation's median of $176,700. Retirees might not even get much of a break on taxes—Social Security benefits are subject to state tax, though you may be able to include that income in the retirement-income tax exemption of up to $8,000 per person, if you qualify.
Courtesy Explore Asheville
Cost of living for retirees: 0.2% above U.S. average
Share of population 65+: 16.3%
North Carolina's tax rating for retirees: Mixed
Lifetime health care costs for a retired couple: Below average at $380,474
The University of North Carolina has a small campus in Asheville of about 3,900 students, and it offers big benefits to local retirees. The school's Osher Lifelong Learning Institute gives seniors a chance to exercise their minds with more than 300 courses a year. You can even give the program a trial run while you're still working through its Creative Retirement Exploration Weekend.
Off campus, Asheville retirees can enjoy the city's world-class symphony, an active local arts scene and plenty of breweries and restaurants. But all the amenities come at a relatively high price. While local living costs are just slightly above the national average, the median home value is $196,300; for the entire Tar Heel State, the median is just $153,600.
Sk5893 Via Wikimedia Commons
Cost of living for retirees: 3.5% below U.S. average
Share of population 65+: 15.1%
South Carolina's tax rating for retirees: Tax-Friendly
Lifetime health care costs for a retired couple: Below average at $381,681
Myrtle Beach is a great setting for the classic retirement dream of endless rounds of golf, broken up only by lounging on the beach. Tee off from any of about 100 championship golf courses in the area. And enjoy 60 miles of beach, where you can just lay out or opt to boat, fish, surf, kayak, scuba dive or partake in other water activities.
Life with all these amenities comes relatively cheap in Myrtle Beach. For example, housing-related costs for retirees typically come in 28.5% under the national average. By comparison, Hilton Head Island—another popular South Carolina retirement destination, where 28.8% of the population is age 65 and older—has housing-related costs 8.2% above average for retirees.
Dave Lawrence via Flickr/Creative Commons
Cost of living for retirees: 6.0% below U.S. average
Share of population 65+: 14.7%
Tennessee's tax rating for retirees: Tax-Friendly
Lifetime health care costs for a retired couple: Below average at $382,360
The Volunteer State is a good choice for most retiree budgets. On top of the friendly tax situation, most areas have below-average living costs across the board for retired residents. Chattanooga's housing-related costs for retirees are notably low, at 12.9% below average. The city's median home value is just $138,100, compared with $176,700 for the U.S. Single occupancy at an area assisted-living facility costs a median $41,400 a year; the national median is $43,200 a year.
The city's vibrant arts scene is a nice draw, with many galleries scattered throughout the Bluff View Art District, as well as the NorthShore and Southside districts. You can also enjoy a lot of quality music events, such as the nine-day Riverbend Festival and Three Sisters Bluegrass Festival, and you can take in theater performances year-round. For outdoor recreation, you can take an easy bike ride or stroll along the Tennessee River, or challenge yourself with area rock climbing, mountain biking, white-water rafting or hang gliding. Be aware of the high crime rates for the state and city. But also recognize that you can certainly find safe neighborhoods, such as Ryall Springs and West View—the safest neighborhoods in Chattanooga, according to www.neighborhoodscout.com.
Courtesy City of Sherman
Cost of living for retirees: 13.0% below U.S. average
Share of population 65+: 13.2%
Texas's tax rating for retirees: Tax-Friendly
Lifetime health care costs for a retired couple: About average at $393,414
With a population of less than 40,000, the small city of Sherman offers retirees big savings. Overall living costs are cheap, and housing-related costs for retirees are particularly affordable, at 24.8% below average. The median home value is $98,100 in Sherman proper and $79,100 in Denison (also part of the greater metro area)—well below the state's $128,900 median. Residents can save on taxes, as well: The Lone Star state levies no income tax.
In Sherman, you can enjoy boutique shopping, unique cafés and several community gatherings throughout the year, including an Earth Day festival and free "Shakespeare in the Grove" performances. Also explore the 12,000-acre Hagerman National Wildlife Refuge, home to about 500 different wildlife species. And when you feel the urge for big-city stimulation, Dallas is about an hour's drive away.
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