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by Sarah Mahoney, AARP The Magazine, August 2006
Have you ever driven through a town and thought, "Gosh, this might be a nice place to retire"? Or stopped by the local real-estate office during a trip to the beach—just to peek at the available homes and dream about what it might be like to live there year-round? We have, but we've usually been stopped short by the cost (million-dollar condos, sky-high property taxes).
Luckily, not all retirement destinations are expensive. In fact, some are downright affordable. We hired a team of researchers to come up with the cheapest states to live in as a retiree, based on income, property, and sales taxes. We then factored in weather, recreational opportunities, and livability (access to health care and transportation), and came up with five great places to retire. (To pick a dream town based on your favorite criteria, use our free, interactive Location Scout.) Read on to meet people who already live in these places, and hear in their own words why they wouldn't want to be anywhere else.
LAS CRUCES, NEW MEXICO
Tina and Doug Bailey
Like many residents of Las Cruces, Tina and Doug Bailey are happy to talk about the city's wonderful weather, the cultural perks that come with living in the same town as New Mexico State University, and the delicious New Mexico-style Mexican food (Las Cruces calls itself the chile capital of the world). But also like most people, the Baileys struggle a little to explain the ethereal charm of this desert town, set at the foot of the Organ Mountains, that has of late attracted so many retirees. "It's the light," says Tina, 56, who moved here in 1971 and married Doug, 64, a California transplant, in 1985. "It just makes everything look and seem so beautiful—that's why so many painters come here."
What's more, Las Cruces, despite its rapid growth and its rank as New Mexico's second-biggest city, still has a relaxed pace and affordable prices. Real-estate prices in Las Cruces are climbing (the median home price in 2005 was $168,000), but they're still a far cry from those in Santa Fe (median house price: $470,000). "We can get in the car and drive to Santa Fe for the weekend, without having to pay those housing prices," Doug says.
The Baileys, who own a government-contracting company, still work but are inching their way toward full retirement. And they're conscious of laying the groundwork they believe will keep them happy in Las Cruces well into old age. Both are avid swimmers, and they work out often with the Las Cruces Aquatic Masters Team. Both also are active volunteers, and they're big fans of the local arts. "We really love the musical and theatrical productions the university does. We pay around $300 for season tickets to the symphony, fifth row, center," says Tina. "We've had these seats ever since we married, and we're lucky—it's often sold out.
Why the locals love it
Las Cruces is a bargain
In addition to having low property taxes, New Mexico taxpayers 65 and older may exempt up to $8,000 (single filer) or $16,000 (married, filing jointly) from any income source if the income is under $28,500 (single filers) or $51,000 (filing jointly). If you're 100 or older, you pay no income tax whatsoever.
Thanks in part to the facilities of New Mexico State University and the growing retiree population, Las Cruces has plenty of outdoor fitness options, including four golf courses. And the mountains offer great hiking and camping.
Santa Fe, with its many cultural events and festivals, is a four-hour drive. The gypsum hills of the White Sands National Monument are 40 miles away, while Juárez, the nearest shopping town in Mexico, is just an hour's drive away.
Watching the sun set over the Organ Mountains. "There are oranges, blues, purples, greens—sometimes in the winter there's a dusting of snow—it's always breathtaking," says Tina. "We don't get tired of it."
Average temperature in summer: 95° F
Average temperature in winter: 65° F
Number of sunny days per year: 330
Casual supper for two at Peppers on the Plaza, and maybe even a run-in with the ghosts of star-crossed lovers who are said to haunt it: $40
Hot tickets: Las Cruces Symphony, $25
Gracious Southern living
CHARLESTON, SOUTH CAROLINA
Margaret and Ian MacDonald
For Margaret and Ian MacDonald, retired life in Charleston is a work in progress. Ian, a native New Englander, was first introduced to the area in 1959 when he was stationed there as a young officer in the U.S. Navy. The couple didn't move south until 1985, though, when Margaret was offered a job running a girls' school. They bought a house downtown in the city's historic district, and for five years, Ian, an engineer, commuted to New England, eventually starting a consulting business in Charleston that allowed him to ease into retirement.
That was in 2000 (Margaret retired in 2004), and Charleston still has all the allure that it did when the couple were working—except now they have time to appreciate it all. Both volunteer as docents for the Historic Charleston Foundation, which has helped to preserve dozens of historic homes, plantations, and other landmarks. Ian, 72, has developed a special passion for the Revolutionary War, and he narrates one of the naval-history cruises around the harbor.
Last year, itching for more space, the MacDonalds sold their downtown home and moved to a more suburban neighborhood, still within Charleston. For about $350,000, they bought a 3,000-square-foot home set on a 14-acre lake, with plenty of wild birds and turtles. And the yard has plenty of mature landscaping, so Margaret, 67, can practice gardening. "Charleston is a city of many famous gardens, and I don't pretend to have that knack—but I do love my azaleas, and I just enjoy pruning and weeding."
What the MacDonalds like most, they say, is how pleasant it is simply to walk through Charleston. "I love to go down to Waterfront Park and watch all the kids playing in the fountains. Or I'll just stroll with the dogs across the College of Charleston, where it's so gracious and calm and cool under the trees," says Margaret. "People love to be outside here, and the weather is so beautiful."
Charleston is a bargain
While retirement income is taxed, Social Security is exempt in South Carolina. Under age 65, $3,000 in pension income is exempt. The income tax deduction for those 65 and older is $15,000 (single) and $30,000 (joint).
Charleston exudes a grace and civility few other cities can match. Maybe it's the 180-odd houses of worship that dot the eight square miles or so of Charleston's main peninsula, or maybe it's the Southern charm, but one etiquette expert's survey has voted Charleston the most polite city in the United States ten years running.
Ninety minutes to the north is Myrtle Beach, the self-proclaimed seaside golf capital of the world. Nearby resort areas include Hilton Head, Kiawah, and Seabrook islands, which attract thousands of bird watchers and nature lovers.
Charleston's plentiful opportunities to head back to college, including numerous nondegree courses at the College of Charleston (those 60-plus can audit as many classes as they want for a $25-per-semester registration fee). The Citadel, the military college based in Charleston, also offers a Senior Scholars program, with twice-monthly speakers. (For those over 55, it costs $35 per semester.)
Average temperature in summer: 79° F
Average temperature in winter: 49° F
Number of sunny days per year: 102
Casual supper for two at Jestine's Kitchen: $24
Hot tickets: For $16 you can get a ticket to two of Historic Charleston Foundation's most famous houses: the 1808 Nathaniel Russell House and the Aiken-Rhett House.
Summer living, all year long
REHOBOTH BEACH, DELAWARE
Sonja and Hoyte Decker
Two years before they planned to retire, Sonja and Hoyte Decker settled on the Delaware coast as their retirement destination. Living in Chevy Chase, Maryland, near where Hoyte worked for the U.S. Department of Transportation, the two had been spending weekends and vacations on the sandy beaches of the Maryland and Delaware shores for years. But they liked friendly little Rehoboth Beach best of all. Just three hours from friends and their daughter in Washington, D.C., it was also reasonably close to Hoyte's two children from a previous marriage.
But finding their retirement house was challenging: Rehoboth Beach itself is only about one square mile, with fewer than 1,500 full-time residents. Housing costs—as in many beach communities—were sky-high. "Houses were just too expensive, even in the late 1990s," says Hoyte, 65, "or else they were just small cottages, or they weren't winterized. We decided against buying an existing home. We had retired without a mortgage—that had always been our goal. And we wanted to keep it that way," he says.
Instead, when Hoyte retired in August 1998, the couple decided to build their own retirement home. They didn't waste any time, either. By September they had purchased a lot. By December they had contracted with a builder. And by Memorial Day 1999 they moved in. It's been one long beach season ever since.
The Deckers aren't the only retirees flocking to the area. With a median age of 57, and 38 percent of the population over 65, Rehoboth and the surrounding communities are a retiree's haven. That trend shows no sign of slowing: Delaware expects its 65-plus population to increase 75 percent in the next 25 years.
What makes Rehoboth Beach magical, of course, is the beach. "Walking along in the early morning, it's like having the ocean to yourself," says Sonja, 61. "There are dolphins all summer long, different kinds of birds—it's beautiful. And it means that in the summer we have constant houseguests, which is great."
Rehoboth Beach is a bargain
Housing in Rehoboth Beach proper is, admittedly, expensive, but the nearby communities of Long Neck and Milton are quite reasonable (and they're still only a few miles from the beach). All Delaware residents can take advantage of the state's super-low property taxes; plus, Delaware has no sales tax on goods, food, or entertainment. Social Security and railroad-retirement benefits are exempt from income tax, and taxpayers 60 and older can exclude up to $12,500 of investment and qualified pension income. Out-of-state government pensions also qualify for the pension and retirement exemptions.
The Deckers love that they can walk everywhere—whether it's on the beach, along Rehoboth's mile-long boardwalk (circa 1873), or to the area's little boutiques and more than 70 restaurants.
Washington, D.C., and Philadelphia are within a three-hour drive.
The small-town atmosphere and the constant events—from Christmas parades to the Annual Chocolate Festival. "Where else would I be able to know the mayor, the chief of police, and be able to be on the beach so much?" says Hoyte. "In Washington there were a lot of things to do, and I did a few. In Rehoboth there are not so many things to do—and we do them all."
Average temperature in summer: 68° F
Average temperature in winter: 41° F
Number of sunny days per year: 96
Casual supper for two at Dogfish Head Brewings & Eats: $30
Hot tickets: The Rehoboth Film Festival in November screens about 100 of the year's best independent films, with a special $6 rate for seniors.
Big-city style, small-town charm
Ella B. Martin Mathis
When Ella B. Martin Mathis, 66, and her husband started sketching out their retirement dreams, it was the view of the Mississippi River that sold them. "Our two children had graduated from high school, gone to college, gotten jobs, and we didn't need all that grass to cut and all those stairs to climb," Ella says. "So we started looking for a condo and found this one on the Internet. It overlooks the river, and we said, 'Wouldn't this be a nice retirement home—we can just sit and watch the water, and rock.' "
In any other place, that "rocking chair w/river vu" destination might have meant pulling up stakes and moving to the country. But Ella and her husband found just what they were looking for in downtown Memphis. This revitalized cultural mecca has everything a retiree could want and more: great parks, including the extensive Memphis Botanic Garden; an incredible musical history (think Johnny Cash and B.B. King); and, of course, the attractions for which it is most famous—Elvis Presley's Graceland and the daily duck march at the Peabody Hotel.
For six years Ella and her husband enjoyed their new life, spending plenty of time with their grandchildren who live in the area and taking long walks in the city park across from their home. Her husband's death two years ago has changed many things. "You never get over it," Ella says, but she's made adjustments. Instead of walking in the park, she prefers to walk indoors at a nearby gym. And facing retirement on her own hasn't dampened her enthusiasm for the ongoing revitalization of Memphis.
"Everything I like to do is so accessible," says Ella, a retired educator who owns a car but seldom uses it. "I can take the trolley everywhere—downtown to the museums and restaurants, to The Orpheum Theater, or to the FedEx Forum if I want to watch the Grizzlies play a basketball game."
Memphis is a bargain
There is no state income tax on salaries, wages, Social Security, IRAs, or pension income in Tennessee; a 6 percent tax is levied on stock dividends and interest from bonds. People over 65 with a total income of less than $16,200 (single filer) or $27,000 (married, filing jointly) are exempt from that tax also. One drawback is an average 8.4 percent tax on groceries, the highest in the country, which many Memphians beat by driving into nearby Mississippi or Arkansas. Despite the downtown building boom, real-estate experts have cited Memphis as one of the best values in the country. The average downtown condo sold for $164,940 in 2005.
"What makes Memphis so special is that even though it's a big city, it's so friendly it still feels manageable," says Ella. "At heart, this is really a small town."
Memphis offers easy access to the Mississippi Delta region. Many residents occasionally hop on a Mississippi riverboat, taking cruises that last from a few hours to a full week.
Living in a cultural hot spot. Whether it's blues (B.B. King), country (Johnny Cash), rock (Elvis Presley and Jerry Lee Lewis), or literature (Tennessee Williams), Memphis has put its stamp on almost every aspect of American entertainment. And its cultural cachet shows no sign of wearing out: Walk the Line and Hustle & Flow, two of last year's hottest movies, were filmed in the River City.
Average temperature in summer: 81° F
Number of sunny days per year: 118
Casual supper for two at The Arcade, Memphis's oldest restaurant: $16
Hot tickets: For $5 you can get lawn seating for the Memphis Redbirds—the local minor-league baseball team.
ST. GEORGE, UTAH
Nora and Pat Flannery
Four years ago Nora Flannery, 54, was flipping through a magazine when she came across an article on St. George, Utah. "My husband, Pat, and I knew St. George because we had been driving through on family vacations to Lake Powell for years," she says. What they had never done, though, was actually stop. A few months later they did, staying at SunRiver, a fast-growing 55-plus community just outside St. George. Within the year the Flannerys sold their restaurant-supply business in central California and put a down payment on a house. "I guess we were really ready for the change," says Pat, 59.
Much of the appeal of St. George lies in its myriad opportunities for hiking, biking, and other fitness activities in the red-rock cliffs that surround the town. Both Nora and Pat play pickleball—a fast-paced racquet game popular in the area—and since moving, they have also bought bicycles. "And on Sundays we try and make it a point to take the Jeep off-roading, because there's such great territory to explore," says Pat. "We could never have afforded this kind of life back in California," adds Nora.
Like many of the "equity refugees" from California, the Flannerys were able to put a large down payment on a house that cost about $200,000 four years ago. They both still work, albeit part-time. But mostly they enjoy the constant activity in and around SunRiver. "We go to lots of parties," Nora says.
They are not alone in their newfound love for St. George. Originally a Mormon enclave, the city is in one of the ten fastest-growing counties for people who are 60 and up in the United States, according to a 2006 AARP report on the migration patterns of older adults. SunRiver alone has more than 1,000 homes. In the last five years St. George has added more than 7,500 new homes; in 2005 more residential building permits were issued in tiny St. George (population 65,968) than in any other Utah city. Still, the spacious desert landscape makes it feel as if there's room for everyone.
St. George is a bargain
Retirees here get Arizona weather and scenery but also enjoy Utah's tax advantages. Taxpayers who are 65 or older at the end of the tax year may be entitled to a retirement exemption of up to $5,700, depending on their income (married couples filing jointly can claim up to $15,000).
St. George is all about the great outdoors. Zion National Park is within an hour's drive, and a 25-mile network of trails along the Virgin River connects with longer paths.
Las Vegas is just 120 miles south, and some of the country's most spectacular parks are less than a half-day's drive: St. George is 155 miles from the North Rim of the Grand Canyon, 132 miles from Bryce Canyon National Park, and 160 miles from Lake Powell National Recreation Area.
The camaraderie that comes with St. George's fitness culture. The city hosts the St. George Marathon, one of the country's largest and the Huntsman World Senior Games, which draw almost 8,000 50-plus competitors from all over the United States.
Average temperature in summer: 99° F
Average temperature in winter: 55° F
Number of sunny days per year: 300
Casual supper for two at the Chuck-a-Rama: $16
Hot tickets: The Tuacahn Amphitheatre and Center for the Arts hosts plays and Vegas performers: $12.50 to $29 a seat.
Whether you're looking for a place to retire or simply seeking new surroundings, our interactive Location Scout—designed especially for AARP The Magazine readers—can help you find the perfect place.
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