50 Great Places for Early Retirement in the U.S.
Early retirement can be more than just a daydream for those long Tuesday afternoons at work. With some smart planning, you can make leaving the workforce early a reality. You just have to keep in mind the unique challenges facing early retirees.
First of all, entering retirement at a relatively younger age means needing to stretch your nest egg further (hopefully). One way to do that is to find the right retirement destination for you. That's because where you live makes a big impact on your budget, as it helps determine your living costs, tax bills and employment and income opportunities. Yes, you'll be retired, but still being young, you may actually want to keep working a bit, whether to help pad your budget, pursue some passion project or just to stay busy with some kind of structure.
With this in mind, we crunched the numbers in search of 50 great places--one per state--for early retirees to settle in, focusing on areas with lower living costs and favorable tax situations, both specifically for retirees. We also looked for places where the economy, typical household income and physical population are all in relatively good health. And we favored locations with high concentrations of residents ages 45 to 64, so you can enjoy early retirement with your peers. Take a look at the list of early-retirement cities.
Huntsville, Ala.
Courtesy Huntsville/Madison County Convention & Visitors Bureau
Total population: 444,908
Share of population, age 45 to 64: 27.8% (U.S.: 26.1%)
Retired cost of living: 5.4% below the national average
Median income, age 45 to 64: $77,266 (U.S.: $69,909)
State's retiree tax picture: Tax Friendly
As one of the 10 Cheapest States Where You'll Want to Retire, the Heart of Dixie boasts many great spots for affordable living. And Huntsville, in northern Alabama, is one of the best. It offers all the low-cost, low-tax advantages as the rest of the state, but adds more generous household incomes.
Home to NASA's Marshall Space Flight Center, the Redstone Arsenal and the Huntsville campus of the University of Alabama, the city offers a robust economy and a highly educated population. You can also find plenty of cultural attractions, from a sculpture trail to a symphony orchestra, as well as opportunities for outdoor recreation (think bass fishing). In fact, Alabama at-large offers many of Florida's popular retirement attractions--warm weather, nice beaches and plenty of golf--all at a typically lower price.
Juneau, Alaska
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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.
Lake Havasu City, Ariz.
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Total population: 204,691
Share of population, age 45 to 64: 28.0%
Retired cost of living: 0.2% below national average
Median income, age 45 to 64: $44,328
State's retiree tax picture: Mixed
Lake Havasu City, situated on the eastern shore of its namesake lake, is a popular destination for co-eds on spring break and snowbirds in the winter--a testament to its attractiveness for a wide age range, making it a great choice for early retirees. Indeed, for the whole year, the local median age is 50.4, compared with 37.8 for the U.S.
Being lake-adjacent, the area along the California border offers plenty of water-related recreation, including boating, fishing and swimming, as well as scuba diving and water skiing. But it's more than just fun and games: Kiplinger named Lake Havasu City one of 15 Satellite Cities Poised to Thrive. That's based on expanding regional business growth and a hot job market, so it offers a strong economic base should you decide to unretire in some form.
Hot Springs, Ark.
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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 you can find many spa and massage services to choose from. You can also unwind by golfing at one of the area's
