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The Ideal Retirement Location

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What is your ideal retirement location? Do you dream of beaches or of mountains? Of your home state, or exotic international locales? Of urban skylines or of rural landscapes? Do you like snowy winters, hot dry summers, or moderate temperatures year round? Will you pack up and retire far away from where you worked a career and raised a family, or will you stay put — perhaps downsizing — in your current, familiar community?

It should be no secret to regular readers that Caroline and I are wrestling with this question right now. We sold our home about 3 months ago and have been traveling ever since, living on the road, staying in our trusty camper van, in the homes of family and friends, and in short-term rentals.

Our end goal has been to travel through our favorite regions of the country until we found the right place to put down new roots. Now, we’re getting close to making a decision.

In the past few months we’ve spent time in the southeast, the southwest, and the northeast — the three quadrants of the country that we are most likely to call home, by virtue of familiarity and proximity to family. (Pacific northwesters please take no offense: we love that region too, but, given the distance, it’s a more likely destination for travel than relocation.)

Several readers have asked to hear more about the process we are going through to determine where to live. They’re very interested in our personal experiences, and the possible lessons learned for their own retirement.

Since this is primarily a personal finance blog, you might assume that our relocation decision is primarily driven by financial considerations — cost of living, taxes, and so on. But that just isn’t the case. Since early in my career, I’ve unapologetically chosen living locations based on quality of life factors first, then striven to optimize our finances to support that decision. And that’s always worked out well. Fortunately our tastes haven’t required us to live in the most expensive areas of the country!

This time appears to be no different. We are again likely to choose where we want to live based on quality of life and aesthetic factors, then apply ourselves to living there relatively inexpensively. I’ll get into our own personal criteria for making this decision shortly. But first a little history. As I’ve alluded, this is not the first time we’ve been through this exercise….

The Southeast

I was a software engineer and telecommuted for most of my career. This gave us the luxury of choosing our living location. And we exercised that option in a big way at mid-career, a few years after the birth of our son. We decided we would move out of the cold and expensive northeast before he reached school age. Our criteria then were to settle down in a good community for raising kids, with a reasonable cost of living, and moderate winters. Passionate about outdoor sports, we viewed every location candidate through that lens. If a place didn’t have great mountains, climbing, and trail systems, it just didn’t make it onto our “short list.”

On a long cross-country drive the year before we relocated, Caroline pulled an outline map of the United States out of her school supplies and we began color-coding our options. Black meant “no way,” gray meant “probably not,” orange meant “possibly,” and green meant “first choice.” As the miles ticked by, we discussed the options in depth. When it was all over there were just four states colored green: Arizona, Tennessee, North Carolina, and Virginia.

At that time, we still didn’t envision living in the west, far from most of our family. So, over the next year, we researched the most appealing cities in the eastern states. We made two trips through the southeast. We phoned chambers of commerce, subscribed to local papers, inspected schools, and talked to local businesses.

Ultimately we chose Chattanooga, Tennessee. In retrospect, it was a great move. Chattanooga, which has always been blessed with great natural resources, had just started transforming itself from an old industrial center to the new economy. A privately-funded aquarium on the riverfront kicked off increasing rounds of public and private redevelopment. Always a regional tourist destination, the downtown drew even more visitors, and now permanent residents. In 2010, the city added the fastest fiber-optic Internet in the country: 1 gigabit-per-second speeds are available to every home and business. Volkswagen, then Amazon, located major facilities there. Already in possession of some of the best rock climbing in the country, the area added great whitewater facilities and mountain biking trails. In 2011, online voters overwhelmingly chose Chattanooga in Outside magazine’s poll to determine the nation’s leading outdoors destination.

And Chattanooga remains a great location today for raising a family, or retiring. If you like being outdoors and you’re looking for a warm, economical city in the southeast, you’ll be hard pressed to find a better retirement location. The setting is among the most beautiful in the country, with a beguiling mixture of mountains and water leading to incredible views. The economy is vibrant. Fine arts, entertainment, and dining abound. Nice houses in desirable downtown neighborhoods can still be found for under $200K. Though summers can be hot and humid, there are four full seasons, and green abounds.

Our Retirement Criteria

As for us, with family increasingly spread around the country, and having spent most of the last two decades in the same location, we are ready for a change of scenery. Otherwise, we would have stayed in Chattanooga.

But now that we are on the move again, what are our location criteria this time around? When I go through my related lists and spreadsheets, here is what the ideal retirement location boils down to for us, in priority order:

Geography — Aesthetics are still #1. We want to live in a naturally beautiful place. I’m mostly a mountain person. Caroline is too, though she also loves beaches. So living in, or below, great mountains with excellent trail systems for hiking, biking, or climbing is what grabs my attention about an area. I can’t imagine living somewhere that I couldn’t easily escape to the rugged tranquility of high places….

Proximity — Being near family was always important, but has taken on a new dimension in later years. Unfortunately, with family members spread across much of the height and width of the country, it’s not a criteria that can be perfectly met. What’s required, practically speaking, is to be within driving distance of some of our important people, and near enough to a major airport (preferably no more than an hour on public transportation) so that we can reach the others easily when desired.

Climate — Physical comfort gets more important as the years pass by. We aren’t wimps. We love being outdoors in all kinds of conditions. But for day-to-day living, she’s sensitive to heat and humidity and I’d like to avoid cold and snow. So a temperate climate with moderate summers and winters is important to us. And yet we do like the seasons. We cherish every colorful fall spent in the eastern woods. And, though we love the exotic flora and dry heat of the great southwestern deserts, we can feel a bit parched and forsaken without some greenery around. Finally, Caroline loves to garden, especially vegetables. Needless to say, it’s hard to find a natural environment that satisfies all of these climate criteria! But that doesn’t stop us from searching….

Services — Next we come to the man-made world. We don’t care for the frenetic intensity of urban living, but we’ve seen enough of rural living to know that it probably wouldn’t suit us either. (It is hard to exist in a rural location without either being totally self sufficient, or spending lots of time in the car driving into town for stuff.) That’s why we lean to medium-size cities, populations of 100,000 plus/minus. These places have most of the services of major metropolitan areas, without most of the drawbacks — congestion, high cost, and crime. We like to have a variety of good dining options. And we’d like access to at least one large natural foods grocer. The only lingering requirement for locating in a truly major metropolitan area — and it’s an important one — might be health care. But that can be mostly resolved by living within an hour or two of a major city.

Cost — Finally we come to finances: the cost of living. For me, the most important cost variable from a retirement location perspective is housing. Though I don’t have figures at my fingertips, I suspect that national variations in the cost of real estate dwarf any such variations in other necessities such as food, fuel, or utilities. The latter are commodities in a national or regional market. Real estate, however, is always local — because you can’t import land. The cost of housing in an area is the largest single financial factor that we can’t directly control. Though we can optimize a bit by analyzing whether renting or buying is more advantageous, we need a nice, safe, quiet, 2-bedroom house or apartment and will have to accept the going rate in an area, within some fairly narrow parameters. In general, we can fine tune the other commodities as part of a frugal lifestyle.

Taxes — What about taxes? You often hear that income tax rates should be a major consideration for retirement location. And, sure, you’d be advised to perform some due diligence on your current versus prospective taxes before packing up the moving van. A couple of excellent sites for researching and comparing tax costs between states include Kiplinger and Retirement Living Information Center. However, as I’ve written before (Why I Don’t Fret About Taxes), I don’t see tax rates as a make or break issue for our own personal retirement location decision. For frugal and careful retirees in the lower tax brackets, standard deductions/exemptions plus fine-grained control over retirement income using a variety of sheltered and non-sheltered accounts can shield substantial income. It’s also important to look at the total tax picture for a state. Some states have no or low income tax, for example, but may compensate via higher sales or property taxes. It’s wise to understand your own lifestyle, tax bracket, and income sources, and the possible implications of tax rates in different locations. But I wouldn’t personally let this drive my relocation decision.

The Envelope, Please

So cost of living and taxes are definitely important items. I consider them, but they are last on a personal list that begins with geography. Why? It gets back to my philosophy, and quest for quality of life: Live a rich life. Follow your passions. Make today count. Then track and optimize your finances so you can do those things.

It’s the living that’s the point, not the cost of it. Of course you can’t ignore expenses. But I’d rather choose the location I want and configure my finances to be able to live there, than settle in a cheap location where I’d be miserable.

That equation doesn’t necessarily apply to everybody. If you’re a beach or water person, then I’m probably speaking your language here, though your preferred locations might be different. On the other hand, if you are somebody who can take or leave beaches or mountains, then you are fortunate indeed. You can live many more places happily, and can afford to optimize other criteria instead.

So what’s the verdict? Where are we going to live in retirement? I don’t have the precise answer just yet, but when all is said and done, our “short-list” for retirement living comes down to these areas:

  • northern Arizona around Sedona or Flagstaff
  • northern New Mexico centered on Santa Fe
  • the Colorado Front Range

I expect we’ll be settled in one of these locations by year’s end. To find out which one, stay in touch!

There are other places that we love or have heard great things about, and will definitely visit, but don’t expect to settle in, mostly due to lack of climate or proximity. These include:

  • Asheville, NC
  • Ashland, OR
  • Bar Harbor, ME
  • Bend, OR
  • Cape Cod, MA
  • Chattanooga, TN
  • Key West, FL
  • Lander, WY
  • New Paltz, NY
  • Tucson, AZ

We’ll continue to visit these places, and other new ones that we discover, and enjoy all that they have to offer.

So how about you? What are your most important criteria for retirement living? And which locations are at the top of your list?

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Comments

  1. I’ve been traveling full time in an RV for 3 years in search of my town to settle down to start a family. Our criteria are pretty eerily similar, however Pac NW is not off the table.

    Have been keeping a list with all data that is of interest to me. Flagstaff is up there on the list. Really enjoy Oak Creek canyon. I like Golden, CO a lot. Sort of a poor man’s Boulder. I spend my winters there because of proximity to ski mountains. Good clean living there. Housing market is really in seller’s favor right now though. One of my favorite intangibles is for a town to have a 2 hour weather escape plan. For example, on Front Range if it’s hot you can drive an hour and elevation changes enough to be 20 degrees cooler. Flagstaff has that too only vice versa. Other towns I like include Durango CO, Missoula MT (the dark horse favorite), and Port Townsend and Bellingham WA.

    I’m in Bend now for six weeks and it’s got some great outdoor rec but just don’t think I could live here. I’ve heard good things about Boise surprisingly and is my next stop in a few weeks. Any thoughts on any of these?

    • Hi Cyrus, thanks for the great travel notes! Oak Creek canyon is a gem. Good thoughts on Golden too. We love Boulder but are interested in alternatives to the expense and crowding there. Great concept with your “weather escape plan” — that’s a familiar idea, I just didn’t have the words for it. Certain cities out west that are near large changes in elevation qualify: Tucson with Mt. Lemmon comes to mind. Durango is a beautiful place, but fails my major airport test: It’s a long ways from anywhere. I keep hearing good things about Missoula, so I’m nudging it up our travel list. Thanks again for the contribution!

      • Glad to contribute… have gotten so many great insights from your blog. Only 7 years away from retiring at 40!

        Missoula really is fantastic. A lot of people I meet dream of moving there, but the job market isn’t stellar. No problem for you though! Proximity to the Bitterroots and Flathead Lake / Glacier NP area is really what puts it over the top. Another criteria that makes a town pleasant for me is a sizeable or respectable university and U of M does the trick. It adds some nightlife culture and more importantly some great local coffee shops. Plus a bustling brewery scene (try Kettlehouse) if that’s your thing. Downtown is relatively vibrant with an actual grid for a downtown versus the Main Street strip you get with most of these towns. Also an excellent Farmer’s Market. Sorry I could go on… I don’t think the town can be fully appreciated in a few days. I didn’t start falling in love until I realized what it had to offer over the course of several months.

        One thing I haven’t done is be there in the winter, from what I hear it’s pretty grey.

        • Agreed, Missoula seems to have a lot of the right ingredients, for at least 3 seasons. Best wishes for your early retirement Cyrus!

          • I lived in Wyoming for 25+ years and much of the time in northern Wyoming. I have been to Missoula quite a few times and even cowboyed in the area. Darrow they have a pretty serious winter there. One thing that can warm the cockles of yer heart in the winter, may be not so much your toes… is the light shows from the northern lights. Ya aren’t too far from Canady!

            The town is a pretty cool place.

            Happy trails, Mike

          • Sounds like a nice travel destination more than home for us, with those winters. Still need to see those northern lights. Thanks Mike!

  2. Hi Darrow,

    Thank you for your recent post.

    In my case, at least for the next eight years, I will be staying put, which is at my two-bedroom and two-bath condominium in a somewhat remote suburb of Los Angeles (but within the city limits of Los Angeles). Although I have visited a number of states (Alaska, Oregon, Washington, Nevada, Utah, Colorado, Nebraska, and New Mexico) outside California during the course of my life, I have been a lifetime resident of the Greater Los Angeles area and I do not know where else I would want to live at this time. Almost everyone I know lives either in the Los Angeles area or in other parts of California. My mortgage will be paid off in less than four years. Although taxes generally are high, I have learned ways to keep my taxes at a reasonable level. For example, as I purchased my current residence for an extremely good price, which was $172,000 in October 2008, my property taxes are well under $2,000 per year (thanks to Proposition 13, which the voters approved in the late 1970’s).

    Public transportation has improved considerably over the past 23 years. I drive my car about once a week, usually to go grocery shopping either at Costco or one of the many grocery stores and supermarkets close to my residence. The rest of the time, I use public transportation. I have a loadable transit pass, for which I pay $75.00 for a 30-day period for unlimited bus and train rides. Not only do I save a considerable amount of money on gasoline, but I minimize the physical and psychological stress associated within driving within the Los Angeles area. Since I also do some walking (perhaps about one mile per day total), I also get quite a bit of exercise, stay in shape, and stay healthy. I found out that once I reach age 62 (less than 4 1/2 years from now), I will become eligible for a senior’s transit pass at a tremendously lower price than what I am paying now (and what I am paying now I consider to be quite reasonable).

    Living in Los Angeles can have its challenges, but smart planning and having, what I call, “street smarts,” can mitigate, sometimes considerably, those challenges. I do not know if I would move to Los Angeles if I did not already live here, but as I have been here for all of these years, I am reasonably content to stay where I am. I have, what someone could say, over 57 years of “on the job training and education” of living in the Los Angeles area. I continue to learn my lessons well.

    I have a few comments about Santa Fe, New Mexico.. I visited Santa Fe during the late 1990’s. Santa Fe, which is New Mexico’s state capitol, is a beautiful city. That city has wonderful restaurants and beautiful scenery, due to its proximity to the southern Rocky Mountains. However, it is my understanding there that housing, although not as expensive as the affluent suburbs of Los Angeles, is not cheap. Suffice it to say that Santa Fe is a very desirable place to live.

    • Thanks for the details Steve. You seem to have living in LA dialed — sounds like a good case for staying put in retirement. That transit pass is a great deal. And thanks for the notes on Santa Fe too. It’s one of our leading contenders. Houses do look a little expensive there, at least downtown, but it appears to be a renter’s market right now, and that’s how we’d start out wherever we wind up.

      • Darrow – I agree with you that renting in Santa Fe or wherever you and your family decide to live would be a good idea initially. I wish all of you the very best!

  3. I’m so glad the southwest made the final list. I’m partial to northern Arizona (especially the little town of Jerome).

    I personally would like to live in a couple different places during our early retirement, possibly doing the snowbird thing with living in AZ from October to April, and then living in the Rustbelt (Pittsburgh, Cinci, Buffalo) or in a liberal pocket of the Southeast (Athens, Nashville, Charlotte). Recently the idea of Panama came up, and my wife is especially fond of that notion.

    I love thinking about these ideas of where we might live. You’ve given us a lot of places to consider!

  4. I think the reasoning you are doing here will serve you very well. I went through a similar decision with similar taste back in 2008, ending up in Louisville, CO (next town over from Boulder). I tried Santa Fe, Bend, and Flagstaff as well. Santa Fe just wasn’t overall a match for me, Bend was nice but the airport logistics were too cumbersome and winters too long. Flagstaff was my second choice after Boulder and over the years I am trending steadily away from the density of NYC I lived in after college, so I could see being happy in Flagstaff eventually. I read that same article about Chattanooga and I’d like to live there for a while to check it out at some point.

    http://findyourspot.com/ is a fun little site to play around with as well.

    • Thanks Peter, that’s a great list for my tastes too. Appreciate hearing about your personal experiences. I often see Louisville recommended as a Boulder alternative. We like Flagstaff a lot — the trail systems are amazing — but the winters there may be a deal-killer for us as far as a full-time location.

      Thanks for the FindYourSpot link too. Fun site: I tried it out and got a few ideas, but mostly confirmation that we’ve done our homework. (Readers beware: the quiz is fairly involved, takes 5-10 minutes, and you will have to supply some contact information to see your results.)

  5. Great analysis!

    As for us, if/when we leave NH and if we stay in the US, CO or NM will likely get the nod. I like a bit of altitude and low humidity.

    But having just gotten back from a motorbike ride, New England in the Fall is very hard to beat!

    • Thanks Jim! Welcome back from your travels. And yes, New England in the Fall will always be a draw, regardless of where we settle. The colors and temps outdoors then are sublime.

  6. I retired from full time employment in March this year but in 2009 we set up our online home exchange travel business to keep us busy in retirement and to help us travel more. Since retiring, I have spent part of most days ‘working’ on our website, developing and marketing it to increase our member numbers.

    Can I recommend that for those who want to travel, either before or after they retire, that they think about Home Exchange for a vacation. Swapping homes saves money but also provides great travel experiences. Why pay for a hotel room or rent a villa when you can stay for free?

    We also find that a few of our members use Home Exchange as a way of getting to know an area prior to moving there on a permanent basis. Spending a few weeks etc in a chosen area does let you get a feel for it and can confirm or otherwise if you want to live there long term.

    Brian

  7. As an RN I just have to say that as you get older healthcare proximity should be first in importance. Living 2 hours from a major medical facility on a nice clear day when you could be airlifted is one thing but on snowy roads it could be life ending if a 2-3 hour drive is needed. When you need specialists you also don’t feel like driving 2 hours each way to see them. I see people at least every month in my small hospital that we can’t maintain due to limited speciality availability but the hospital that can treat them is 15 min away. It is hard on families when someone has to be sent somewhere that is 2 hrs away. Hopefully you will never need that type of care but the reality is that you will. Good luck on your final choice.

    • Hi Lorraine. We’re aiming to live about an hour from a major city. The importance will probably grow as we get older. Thanks for the insights.

      • Hi Lorraine and Darrow. Thank you for your comments. One of the reasons why I stay in the Los Angeles area is that excellent health care is close by, just in case I need it. Fortunately, I have good health insurance.

  8. canyon wanderer says:

    We chose Santa Fe.

  9. Had no idea you were from Chattanooga! It is indeed a good place to be!

  10. Holy smokes.. key west !?!? Your wife being sensitive to heat and humidity. due points are over 70 , mostly 75 from April to October. Putting it in perspective things get sticky around 55…. anyone north of florida during the summer starts to complain around 65… 75 you basically have to sit inside all the time. Flood and hurricane insurance (“wind” not covered under homeowners) can run you thousands per year, food is also more expensive too (only one road in from miami). So its hard to be “frugal” there… bet on at least $5,000 for those 3 items alone. If I were you I would rent a RV lot from May to October or even just a few months in summer. Rates are lower once the snow birds leave and you can see if you really like it. As for your post on taxes I mostly agree, but would caution you to the possible tax reform bill that could come out of committee this fall. I suspect the tax free nature of muni bonds will at least be capped. This could hurt muni’s causing governments to raise taxes to cover the higher rates (to keep investors in). On the flipside Florida’s books are very well balanced (because property tax rate increases on retires is limited so spending is well controlled). So despite whatever happens at the federal level I expect states like Florida to absorb the changes better than other states.

    • Hi Joe. Agreed on Key West. It’s strictly a winter travel destination for us. I’d never own property in a flood or hurricane-prone area. We were there last winter in our camper van and loved it. We had a very nice, inexpensive campsite on Stock Island and had a blast walking, biking, and scootering places from there. It was a great deal, for all the fun we had. Thanks also for the notes on possible tax reform. We’ll see what happens.

  11. Other considerations for me besides location of family/friends, cultural and educational opportunities, weather and geography are religious and political views. For example, if you are a member of a smaller religious group, you may not find a similar faith community in many areas — for example, it might be hard to find a Unitarian, Greek Orthodox or Coptic Church or Buddhist temple in many areas. As one gets older, having a religious home nearby can become more important. It’s easy if you are part of a mainstream/majority sect, much less so for other groups. Similarly, if you are politcially liberal, you may be very uncomfortable in a beautiful, affordable community filled with Tea Party types. I’m not saying you should live in a political echo chamber and people need to know how and when to discuss differences civilly, but having at least a few neighbors with whom you don’t always have to bite your tongue may also be important. These considerations have led me to cross many areas off of my list.

  12. Any thoughts on Utah?

    • Hi Stephanie. We love Utah. I’ve done a half-dozen trips to Moab — one of the most beautiful and amazing places in the country, for me. But it is very small and hot in the summer. So I’m not as sure about cities for settling down. Salt Lake seems a little large for us, though there might be some nice-sized satellite communities. FindYourSpot.com recommended St. George, but I haven’t been through there in a long time. I put it on our ‘to-visit’ list. Anybody else have thoughts on living in Utah?

  13. Well Darrow, sorry you left us in Chattanooga. Please be careful not to tell too many about our cost of living, wonderful landscape, hang gliding, large lakes, biking, rock climbing, Southeast football and plenty of hunting/fishing plus camping. When you need a new VW or a Moon Pie, we welcome you back anytime to the Little Grand Canyon. Take care and let us know how you are doing. Peace, Gage of Red Bank

  14. Darrow – I was struck with a couple of things. First, CA seems to have not been on any of your lists and two your wife got short shifted on sitting on a beach…:-) Were there any consideration given to a beach location or CA even in the initial “orange” phase of this latest search?

    • Hi Gary, that’s true. We lived in CA for a few years early on and are familiar with the pluses and minuses. Right now no one location there draws us, and it’s a little far from family. That said, if you or other readers want to nominate some locations in CA we’d all be interested! As for beaches, we’ll probably need to make annual pilgrimages, but fortunately she’s a mountain person too!

  15. Mark Priest says:

    Wonder if Saint George would be too hot for you. Also very little green. You can bunk here if you want somewhat close to the beach for a vacation – orange, ca. Best climate in the world but probably too major for you guys.