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.
For many people, New York conjures up images of crowded streets, honking taxis and towering skyscrapers the kind of rat race they may hope to escape in their golden years. But there's another New York beyond the Big Apple, one that retirement experts say can be very appealing for seniors. Among the things that draw retiree to the state: natural beauty, cultural activities, and several international airports allowing retirees to travel to pretty much anywhere, says Gary Schatsky, an adviser and president of planning firm ObjectiveAdvice.com. Unlike many states, make you pay income tax on the full amount of your IRA withdrawals, the first $20,000 of withdrawals from an IRA isn't taxed by the state of New York so long as you wait until after age 59 1/2.
Like any state, New York has its share of drawbacks. The two biggest are probably the weather and the cost, experts say. "The weather is intimidating to some," says Schatsky. The winters mean snow, and in upstate New York, the white stuff is measured in feet, not inches. On top of that, income and property taxes are high in many areas, says Kay Conheady, a financial planner at Apropos Financial Planning in Rush, New York. Overall, the cost-of-living in New York is 26% higher than the national average, with New York City being the singlemost expensive big city in the United States, and among the most expensive in the world.
One of the pricier retirement havens in the state is the Hamptons. The median home in East Hampton costs more than $1.1 million (and that's not for beachfront), and the cost of living is 167% higher than average, according to Sperlings Best Places. Of course, residents get many advantages beyond just the bragging rights of a fancy address: quaint towns with grey clapboard homes, a wide smattering of shops and galleries, pristine beaches and an artist community that over the years has included luminaries like painters Jackson Pollock and Mark Rothko. But they also must fend off a hoard of summer visitors (including twenty-somethings crammed into a "summer share" -- often code for 20 people to a three-bedroom house). There's so much wealth and power concentrated in the Hamptons, say advisers, that it can make even millionaires feel poor.
For those considering retiring in New York, below are four options that are less pricey than the Hamptons, but still have a compelling cultural and outdoors scenes.
Saratoga Springs: For the artist
By the numbers
- Population: 29,256
- Median home cost: $260,000
- Cost of living: 20% higher than average
- Unemployment: 6.3%
Every summer, thousands of people head to Saratoga Springs for horse racing, but the historic city is also well-known for its arts and shopping, both of which retirees in the area love, says Annamaria Bellantoni, the vice president of tourism for the Saratoga County Chamber of Commerce. The Saratoga Performing Arts Center, the so-called "cultural hub of upstate New York," regularly hosts both the New York City Ballet and The Philadelphia Orchestra. There's also the Beekman Street Arts District; a dedicated area for art galleries, which has everything from pottery to handmade jewelry to painting; and Skidmore College, which is home to the Zankel Music Center and the Tang Modern Art Museum. And foodies can take their pick of more than 100 restaurants -- some run by top-notch chefs who wanted to escape the hustle and bustle of New York City.
Of course, the cost of living, while lower than the Hamptons, is still 20% higher than the national average. And some retirees may not enjoy the town being taken over every summer by tourists, say experts. Still, advisers say there are plenty of R&R options for retirees from soaking in one of the city's many natural springs spas to strolling through the 2,000-acre Saratoga Spa State Park, which features mineral springs (the city's namesake), classical architecture and an 18-hole championship golf course.
New Paltz: For the outdoor enthusiast
By the numbers
- Population: 6,476
- Median home cost: $245,100
- Cost of living: 20% higher than average
- Unemployment: 8.1%
While there are a number of towns in the Catskills region that are more well-known, advisers say New Paltz is an affordable alternative for many retirees. Not only is it a small college town (it's home to SUNY New Paltz), it's also within an hour of other famed Catskills towns like Woodstock (an artsy hippie town) and Phoenicia (located near Esopus Creek and known for tubing). The town is also just a 15-minute drive from Poughkeepsie, where the Metro-North railroad can easily whisk residents back and forth from New York City a plus for those who may want to keep some working hours in retirement.
But the main draw for many retirees is the area's hiking, says Heather Martin, a realtor at Heather Martin Realty in the Catskills. Indeed, some locals refer to the town as the "poor person's Boulder [Colorado].") (The town also has a very liberal vibe the town's mayor created a national controversy in 2004 when he began performing same-sex marriages, long before it was legal in the state -- which could turn off some retirees). But for hiking enthusiasts options include the Shawnagunk Mountains and the 12-plus-mile Wallkill Valley Rail Trail, an former railroad track that was converted into a walking and biking path. Staying in town isn't too shabby either, as historic Huguenot Street, a national landmark district and the center of New Paltz, is populated by a number of locally-owned bookstores, antiques shops and restaurants.
Tarrytown/Sleepy Hollow: For the "I need to be near NYC" retiree
By the numbers
- Population: 11,251
- Median home cost: $507,900
- Cost of living: 72% higher than average
- Unemployment: 6.7%
Those wanting to live within 45 minutes of New York City -- in a house that's larger than a college dorm room, and in a town with at least some endearing personality of its own -- usually have to pay up, say advisers. Tarrytown is not an exception, but it's significantly cheaper than ritzier neighbors like Chappaqua and Scarsdale.
For retirees, the appeal of Tarrytown is clear: The mere 35-minute train ride to Manhattan means it's a breeze to hit up those Broadway shows, restaurant and gallery openings, dance performances, film screenings and all the other cultural offering, says Gus Montero, a broker at Sleepy Hollow Real Estate. But once home, the quiet burg has few of the city's hassles.
One it does share with the big city, though, is a lofty price tag. The cost of living is 72% higher than average and the median home costs $507,900. But Tarrytown is more than just a place to park your stuff near NYC, say retirement pros, who note that it has a friendly, small-town feel, with few chains and lots of little stores like antiques and chocolate shops, as well as several art galleries. It also has historical sites, including the Rockefeller Estate and Lyndhurt, a Gothic-style mansion, and offers retirees lots of outdoor activities, including a bike path along the Old Croton Aqueduct. In fact, the beauty of the area inspired much of Washington Irving's work, including The Legend of Sleepy Hollow. "We also have a really active senior center," says Montero. "They have everything from yoga classes to day trips."
Ithaca: For the lifelong learner
By the numbers
- Population: 30,640
- Median home cost: $164,500
- Cost of living: .3% lower than average
- Unemployment: 5.6%
On store windows, car bumpers and telephone polls in Ithaca, you'll find stickers with the city's unofficial tagline: "Ithaca is Gorges" -- a tribute to the natural beauty of the city. Not only are there lots of gorges, there are also dozens of waterfalls and 25,000 acres of national forest along Cayuga Lake, one of the Finger Lakes. (There's also an up-and-coming wine region in the area.) Even the Dalai Lama was apparently attracted to this beauty, building a temple here with the goal of offering "Western students the opportunity to study authentic Tibetan Buddhism in a monastic setting."
What really sets Ithaca apart are its two top-rated universities, Cornell University and Ithaca College, which provide not only adult classes, but also help attract lots of arts, music, public concerts, restaurants and more to the area. "It's unusual to find so much cultural activity in such a rural environment," says Bruce Stoff, a spokesperson for the Ithaca/Tompkins Convention & Visitors Bureau. "There are public concerts, lectures and arts events almost every day -- a lot of it is free, particularly the events on campus."
The central New York town isn't for everyone, locals say. "There's a zany political culture here," says 76-year-old Roger Battistella, a retired Cornell professor. Plus, the winters in this town can be brutal, with winter temperatures plunging into the teens and plenty of snow.