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All Contents © 2020The Kiplinger Washington Editors
By Stacy Rapacon, Online Editor
| July 9, 2019
Small towns can pack in big benefits for young retirees: little to no traffic, tight-knit communities, typically lower living costs and some peace and quiet. And you don't necessarily have to lose out on important big-city amenities—such as ample job opportunities (should you decide to dip back into the workforce for some extra income in your early retirement), diverse cultural attractions and an active nightlife—to settle down in one.
We pinpointed 50 great places in the U.S. for early retirees—one in each state—focusing on living costs, median incomes and poverty rates for residents ages 45 to 64, as well as local tax environments and labor markets. Of our 50 picks, these 16 towns boast modest populations that won't overwhelm your retirement.
The list is ordered alphabetically by state. See "How We Picked the Best Places for Early Retirement" at the end of the list for details on our data sources and methodology.
Total population: 32,434
Share of population, age 45 to 64: 29.3%
Retired cost of living: 33.2% above national average
Median income, age 45 to 64: $102,396
State's retiree tax picture: Most Tax Friendly
If you crave adventure—and don't mind long winters and vast swaths of wilderness—it pays to live in Alaska. Literally. The state's oil wealth savings account gives all permanent residents an annual dividend: $1,600 per person in 2018. That's on top of the state's generous tax situation: Alaska has no state income tax or sales tax (although municipalities may levy a local sales tax), and it doesn't tax Social Security or other retirement benefits. No wonder Alaska ranks as the most tax-friendly state for retirees.
Still, seniors don't seem too interested in facing the Last Frontier. Only 10.1% of the entire state's population is age 65 and older, compared with 14.9% of the U.S. That leaves more room for younger residents—with 25.8% of the state being 45 to 64 years old and an even higher share of the capital city belonging to that age group—to take advantage of the state's financial benefits. Younger retirees might also enjoy all the local, natural benefits: Juneau offers endless outdoor activities, from kayaking to whale watching, as well as a charming downtown.
Total population: 97,994
Share of population, age 45 to 64: 27.1%
Retired cost of living: 8.0% below national average
Median income, age 45 to 64: $49,692
State's retiree tax picture: Not Tax Friendly
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 bathhouses, where you can drink from fountains and soak in the water. The relaxing experience extends into the city proper (where the town's population totals just 37,169), where you can find 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, transportation and health care costs for retirees are particularly low, at 23.3%, 20.3% and 8.2% below the national average, respectively. The median home value in Hot Springs, about 60 miles southwest of Little Rock, is $114,700—far below the national median of $193,500, according to the U.S. Census Bureau.
Photo by LFLamb via Flickr
Total population: 27,380*
Share of population, age 45 to 64: 33.4%
Cost of living: 16.6% above the national average**
Median income, age 45 to 64: n/a
State's retiree tax picture: Least Tax Friendly
Young retirees seeking peace and quiet without getting bored ought to consider settling in New Milford. About 82 miles north of New York City and 150 miles south of Boston, the New England village is a short train ride away from big-city amenities but bursting with small-town charm. It offers a quaint downtown area with shops, restaurants and an expansive town green. And Candlewood Lake and the Housatonic River provide a great setting for a host of outdoor activities, including swimming, boating, kayaking and rowing, and a chance to connect with nature.
The local financial situation is not quite as picturesque. Connecticut at large tends to be quite pricey and aggressive with taxes. But living costs in New Milford are a bit more affordable than the rest of the state at 18.4% above the national average. And local household incomes are typically also high. Across all ages, the median household income in New Milford is $83,676, according to the U.S. Census Bureau, compared with $57,652 for the U.S.
*Town population, according to the U.S. Census Bureau.
**Overall cost of living for all residents, according to Sperling's BestPlaces.
Total population: 33,673*
Share of population, age 45 to 64: 16%
Cost of living: 11.5%**
State's retiree tax picture: Tax Friendly
College towns typically offer strong economic bases and brilliant amenities—and Newark, home to the University of Delaware, is no exception. Young retirees, in particular, may appreciate the vibrant campus lifestyle, including games, concerts and other events open to the whole community, as well as numerous restaurants and businesses drawn by co-ed consumers. As you age, you might also appreciate the continuing education offerings, as well as the quality health care facilities, of the University. Beyond college-related offerings, the area is also home to more than 17 miles of trails and 650 acres of parkland to enjoy and explore.
Plus, the First State is tax-friendly to residents of all ages, so young retirees don't have to wait to take advantage of low taxes. Indeed, with no sales tax and low property tax, Delaware ranks among our top 10 Most Tax-Friendly States.
Total population: 71,093
Share of population, age 45 to 64: 28.3%
Cost of living: 67.5% above the national average**
Median income, age 45 to 64: $82,891
With its tropical climate and pristine beaches, Hawaii can be a retirement paradise for sun- and fun-loving folk. But the state's high costs is a big deterrent, especially for early retirees who need to make their money last even longer. With that in mind, we suggest considering the micropolitan area of Kapaa (which means "solid"), where living costs are not quite as intimidating. While still very high compared with the U.S., in general, they're notably lower than the rest of the state (86.9% above the national average) and capital Honolulu (89.7% above the national average for all residents and 92.2% above the national average for retirees).
Kapaa proper is a small town with a population of just 10,505. It sits on the eastern shore of Kauai. Like many spots in Hawaii, it has plenty to offer in terms of natural beauty and outdoor recreation with beaches, parks and hiking trails lush with wildlife and ocean views. It also has the Samuel Mahelona Memorial Hospital, along with an outpatient clinic, within city limits and is just eight miles from Lihue International Airport. So it's not as remote as you might expect an island paradise to be. Indeed, it's a popular local shopping village with farmers markets, street vendors and several restaurants. Just don't mind all the tourists.
**Overall cost of living for all residents, according to Sperling's BestPlaces.
Total population: 105,287
Share of population, age 45 to 64: 22.6%
Retired cost of living: 9.3% below national average
Median income, age 45 to 64: $58,063
State's retiree tax picture: Mixed
The Gem State is a brilliant blend of affordability and economic stability that can make a great home for early retirees. In fact, Idaho is the number one state for fastest job growth rate with high-tech firms, including Boise-based Micron, being attracted to its low operating costs and drawing investors and workers alike.
Twin Falls (town population: 49,764) is particularly cheap for retired residents, compared with all of Idaho's already low living costs 5% below the national average for the general population. But you can still find plenty to do, especially if you're an outdoor enthusiast. The area, on the edge of Snake River Canyon in Southern Idaho, offers beautiful vistas and a good setting for hiking, camping, bird watching and kayaking.
Photo by technodad via Flickr
Total population: 110,979
Share of population, age 45 to 64: 27.5%
Cost of living: 12.0% above the national average**
Median income, age 45 to 64: $105,417
About an hour and a half from Washington, D.C., the California-Lexington Park metro area of Maryland offers a quick escape from politics to the Chesapeake Bay. And despite the local population's high incomes (and the area's abundance of millionaires), living costs are lower than much of the rest of the state—Maryland's cost of living is 24.6% above the national average. And it's far more affordable than the District, where living costs are 73.9% above the national average.
In the small town proper (population: 11,626), you can visit the Patuxent River Naval Air Museum to peruse the collection of naval artifacts, expanding beyond just operational aircrafts and focusing on the research and testing stages of development. (While it was once an official U.S. Navy museum, due to federal budget restructuring, it is now a private non-profit organization.) And in the rest of St. Mary's County, early retirees can explore and enjoy more than 500 miles of shoreline on the Patuxent and Potomac Rivers and the Chesapeake Bay.
Total population: 127,751
Share of population, age 45 to 64: 30.3%
Retired cost of living: 7.4% above national average
Median income, age 45 to 64: $65,943
State's retiree tax picture: Not Tax Friendly
New England is notoriously expensive, but Pittsfield (town population: 44,737) offers a small pocket of relative affordability—at least more reasonably priced than the Boston metro area, where living costs for retirees are 55.6% above the U.S. average. Housing is particularly affordable: The median home value in the city, located in the western part of the state, is $173,100, compared with $193,500 for the U.S. and a whopping $455,100 for Boston proper.
Leaf peeping in the fall may be enough to draw you to the Berkshires. But you can find plenty to enjoy year round, including camping, fishing, hiking and skiing. Nearby, enjoy musical performances at the Tanglewood Music Center, the summer home of the Boston Symphony Orchestra. Art lovers may want to make short drive to the Clark Art Institute in Williamstown and the Massachusetts Museum of Contemporary Art (MASS MoCa, for short) in North Adams.
Total population: 100,733
Share of population, age 45 to 64: 23.0%
Retired cost of living: 2.6% above national average
Median income, age 45 to 64: $75,219
State's retiree tax picture: Not Tax Friendly
If you've ever dreamed of retiring to the mountains, here's your chance. Bozeman is in southern Montana, nestled in the Gallatin Valley and surrounded by majestic ranges and national forests. Yellowstone and Grand Teton national parks sit due south of Bozeman. The geography means you have to be comfortable hiking, mountain biking, skiing and backcountry exploring your way through retirement. Hunting and fishing are also popular local activities.
But don't expect total isolation. Montana State University's Bozeman campus is home to about 15,000 students, swelling the town's population to 48,532. Exuberant co-eds might not be the neighbors you pictured in your mountain-view retirement destination, but you may enjoy the dining, culture and entertainment options that come with a college town.
Total population: 47,632
Share of population, age 45 to 64: 31.1%
Cost of living: 34.1% above the national average**
Median income, age 45 to 64: $69,183
If you retire a millionaire, you'll be in good company in Gardnerville Ranchos. The small Nevada town (population: 11,312) near Lake Tahoe is home to a surprising number of millionaires. With its prime location, the draw is understandable—across all income levels. The nearby Sierra Nevada mountain range and Lake Tahoe provide ample opportunities for hiking, biking and boating in warm weather, and world-class skiing in winter. And just about an hour away, you can enjoy big-city amenities in Reno with its downtown full of restaurants, nightclubs, art galleries, music venues and, of course, casinos.
Downside: You'll pretty much have to be a millionaire to afford the local living costs. Housing is the biggest budget killer with the median home value in Gardnerville Ranchos being $254,000, according to the U.S. Census Bureau, compared with $216,400 in Nevada and $193,500 in the U.S. Upside: State taxes are light not just for retirees, but for residents of all ages. In fact, the Silver State is one of Kiplinger's Most Tax-Friendly States in the U.S., with its low property tax and zero income tax.
Total population: 15,511*
Share of population, age 45 to 64: 24.2%
Cost of living: 25.5% above the national average**
If you're hoping for a beach-based retirement, New Jersey may not be the first place that comes to mind. But the Jersey Shore can be a lovely place to retire to, albeit generally pricey, just like the rest of the Garden State. Central and South Jersey offer a bit more affordability in retirement than the northern, New York City-adjacent region, at least. For example, in Middlesex and Monmouth counties, the cost of living for retirees is 16.1% above the national average—not quite as bad as in Bergen and Passaic counties, where it's 23.1% above the national average.
One of the relatively more affordable oceanfront towns is Asbury Park, for bad reasons. Until recently, the 1.4-square-mile city was as famous for its crime and corruption as it was for its boardwalk and beaches. But revitalization efforts over the past several years are bringing the latter characteristics back into the spotlight and adding on ritzier housing options, restaurants and shops, mainly on the east side of town. And still, Asbury Park maintains a quirky vibe with an arts and music scene that persisted even through the town's darker days.
Total population: 128,673
Share of population, age 45 to 64: 25.8%
Retired cost of living: 2.8% below national average
Median income, age 45 to 64: $82,884
The capital city’s strong economy means plenty of employment opportunities for early retirees who want the option of popping back into the workforce, if only part time. It also means you can find an array of restaurants and shops around town, as well as attractions, including the Lewis and Clark Riverboat, the North Dakota Heritage Center, Fort Abraham Lincoln and the Dakota Zoo. Bismarck is one of the bigger towns on this list, with a city population of 73,112, but it doesn't feel too big.
On the banks of the Missouri River, you can enjoy more active leisure in the summertime. That’s when it’s warm enough to go cruising, boating, kayaking and canoeing, as well as hiking and biking on the trails around the city and golfing at Hawktree Golf Club. Otherwise, hope you love snow. Bismarck gets an average 46 inches of snow each year, compared with an average 28 inches for the U.S. And the average temperature in January, the coldest month, is 2 degrees.
Total population: 21,956
Share of population, age 45 to 64: 27.8%
Retired cost of living: 2.5% below national average
Median income, age 45 to 64: $71,807
South Dakota consistently tops our rankings of best states for retirement, what with its low living costs, tax friendliness and strong fiscal health. And while its farm economy is currently hurting from the recent tariffs situation, the financial services and tourism industries continue to hum along and contribute to the state's jobs growth.
The tiny capital city of Pierre, situated on the Missouri River, is a nice place to settle in the Mount Rushmore state, particularly for fisherman and hunters. Lake Oahe, Lake Sharpe and smaller surrounding lakes offer anglers year round action. And nearby Fort Pierre National Grassland consists of 116,000 acres of federal land, where hunters can bag pheasants, prairie chickens and sharp-tail grouse, as well as waterfowl, white-tail deer and wild turkeys.
Photo by VSmithUK via Flickr
Total population: 126,146
Share of population, age 45 to 64: 26.8%
Retired cost of living: 14.3% below national average
Median income, age 45 to 64: $64,446
This small Texas city—the town's population is a manageable 42,462—offers big savings for retirees with below-average costs in every spending category. It's actually among the cheapest U.S. cities to live in. Housing costs are particularly cheap—27.3% below the national average for retirees. The median home value in Sherman is $106,100, compared with $151,500 in all of Texas and $193,500 in the U.S.
In town, you'll find charming amenities, such as boutique shopping, a number of unique restaurants (and many more chains) and community gatherings throughout the year, including a free summer concert series. Nature lovers might also appreciate the local 12,000-acre Hagerman National Wildlife Refuge, with more than 500 species identified so far.
Total population: 137,475
Share of population, age 45 to 64: 23.2%
Retired cost of living: 6.3% below national average
Median income, age 45 to 64: $63,746
West Virginia University offers a number of benefits to retirees in Morgantown, from sports games to cultural activities such as Broadway shows and art exhibitions to highly rated medical facilities. If you're 50 or older, you can join the local chapter of the Osher Lifelong Learning Institute. Membership, which costs $100 a year to be a full member, gets you access to interest groups, trips, social gatherings and program classes, including local and international history, music, computers and yoga. And once you're 65 and older, you can take WVU courses at a discount.
Beyond the University, you can find a world of outdoor recreation surrounding Morgantown proper (town population: 30,955) with ample opportunities for hiking, biking, fishing, birding, whitewater rafting and more.
Total population: 97,031
Share of population, age 45 to 64: 25.9%
Retired cost of living: 7.9% below national average
Median income, age 45 to 64: $75,418
Retiring early to escape the noise and crowds of the workforce? The Cowboy State offers an abundance of space and quiet—and a scarcity of people. It has a population of fewer than 580,000, whihc works out to about six people per square mile. (By comparison, the country's smallest state in size, Rhode Island, hosts more than a million people, with more than 1,000 people per square mile.) Even the capital is relatively small, with nearly 64,000 residents living in the town proper.
The lack of crowds doesn't leave you a lack of activities. You have plenty of outdoor diversions, such as miles of trails for hiking, biking and horseback riding; fishing and boating; and birding and other wildlife viewing. Train aficionados can enjoy the area's railroad history and displays of locomotives, including the world's largest steam engine (also retired). Another big local attraction: Every summer since 1897, Cheyenne hosts the world's largest outdoor rodeo and Western celebration, Frontier Days, now a 10-day event.
To pinpoint one great retirement destination in each state, we weighed a number of factors: