By CATEY HILL
For the more than 36 million Americans who will turn 65 in the coming decade, the best cities and towns to retire in now have a much higher bar to clear: They can't just be great places -- they have to be affordable. Each week, SmartMoney.com tours a different state to find less-expensive alternatives to the most well-known golden year destinations.
Retire Here, Not There: State-by-State
Forget your parents' retirement destinations. These less-known gems offer lower prices and peppy economies.
Tiny Delaware is often forgotten on lists of places to retire, but residents say many of its cities and towns offer many of the things retirees are looking for in a community, including beautiful beaches and relatively low taxes. Indeed, the state has no sales tax, Social Security benefits are tax-exempt, income tax rates max out at 6.95% and seniors can exempt $12,500 of investment and pension income from state taxes. Plus, it's located just a short drive from Philadelphia, and just a couple of hours from Baltimore, Washington D.C., and New York. Delaware residents enjoy a high quality of life, especially in the beach towns, says Thomas McGlone, the managing partner at Heirloom Wealth Advisors in Lewes.
That said, retirement pros recommend that seniors looking to relocate to The First State (it was first of the 13 original states to ratify the U.S. Constitution) pick their spots. Residents point out that the medical services in many towns across the state haven't kept up with the growing number of older Americans moving there. Travel can be an issue too: you may have to drive to Philly, D.C. or New York to get a direct, international flight, says McGlone.
On top of that, the state's cost of living is about 14% higher than the U.S. average, according to Sperling's Best Places. Some of the more popular retirement towns like Rehoboth Beach, with its many boutiques, boardwalk and restaurants, are even pricier. The median home costs $650,800 and the cost of living is 81% higher than the national average.
But for retirees, there are cheaper alternatives than Rehoboth. Here are three places advisers say to consider.
New Castle: For the history buff
By the numbers
- Population: 4,830
- Median home cost: $210,300
- Cost of living: 11.1% higher than average
- Unemployment: 8.1%
This historic town, with its cobblestone streets and historic homes, draws comparisons to Colonial Williamsburg in Virginia. It's home to five museums, including the Old Library Museum, which houses thousands of classic books, and the Velocipede Museum, which displays vintage bikes, tricycles and related memorabilia. "A lot of people in the older generation work or volunteer at the museums," says mayor Donald A. Reese. About 15 blocks in New Castle are designated a "National Historic Landmark Area" so all home renovations and restorations must be carefully supervised -- one of the reasons this town has retained its historic charm so well. Plus, "it's a very friendly and warm town where everyone knows each other," says Reese.
Retirees looking for more action may be disappointed: Restaurant and shopping options are pretty limited, though residents point out that it's only a 15-minute drive to nearby Wilmington, the largest city in Delaware.
Bethany Beach: For the beach bum
By the numbers
- Population: 1,236
- Median home cost: $431,900
- Cost of living: 46.4% higher than average
- Unemployment: 8.7%
This community isn't exactly a bargain, but it's still less expensive than its coastal neighbors Rehoboth Beach and Lewes, according to Sperling's Best Places. Nicknamed one of the "the quiet resorts," (along with Fenwick Island), Bethany Beach prides itself on its ability to take life down a notch or two on the intensity scale -- a quality that certainly appeals to many a retiree, says Carrie Subity, the Executive Director of the Bethany Fenwick Area Chamber of Commerce.
Of course, the clean beaches are a major draw, but so is the "ecofriendly" lifestyle. One major downside of a beach town is that some of the local businesses shut down in the winter. That said, "with the miles of bike friendly roads, walking trails, great kayaking and tons of other outdoor activities where one can experience the beautiful scenery and wildlife, it is a great place for anyone to spend their retirement," says Carrie Subity, the Executive Director of the Bethany Fenwick Area Chamber of Commerce. The quaint boardwalk and downtown area, which is lined with restaurants and shops, are another big perk, she adds.
Newark: For the young at heart
By the numbers
- Population: 29,931
- Median home cost: $269,600
- Cost of living: 20.5% higher than average
- Unemployment: 6.4%
Retirees pick Newark, home to the University of Delaware, for "the college town experience" says Dana Johnston, the community affairs officer for the city. The university helps bring in "good theater, college sports, lots of entertainment programs and adds to an already vibrant downtown," she says. In the downtown alone (which is walkable), residents have their pick of 30 to 40 restaurants, she says, as well as a variety of shops. One warning, say residents: The town can get a little rowdy when school's in session.
The town also has a lot of outdoor activities. There are bike-friendly areas like the James F. Hall trail and the Pomeroy Newark Rail Trail, which is under construction and scheduled to open this year and runs through downtown. In addition to the city's fifteen miles of trails and thirty three parks totaling over 650 acres of parkland, there are roughly 12,000 acres of parkland surrounding the city, which offer walking, biking and birdwatching opportunities. Newark is right off Interstate 95, so it's an easy trek to New York City and Washington D.C., and there's a train stop in town that can easily whisk one away to both places in less than two hours. And there are eight 55 and over communities here and two major hospitals within 5 to 10 miles of town, adds Johnston.