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.
Oh poor Oregon. Lately its biggest claim to fame is the hipster-mocking IFC show "Portlandia." But the state has a much different -- and well deserved -- reputation among the 50-plus crowd. The emerging wine region, beautiful woodlands and lack of sales tax make Oregon a compelling place to retire. "One of the biggest draws here is the lifestyle," says Pasha Horiuchi, a financial adviser with Ameriprise Financial in Portland, Ore. Beaches, mountains and rivers are all within a few hours of each other, he says, making it ideal for an active retiree.
The downside? Oregon is in the Northwest and that means wet weather in many cities. In Eugene, average annual rainfall is more than 50 inches per year compared to 38 inches for Eureka, Cal., just across the border. What's more, tax rates hit nearly 10% if an Oregon resident's annual income climbs above $125,000 for single filers in 2012. While most retirees may not be so well heeled, taxes are still high. Incomes above $15,500 are charged a lofty 9% tax rate.
Oregon can be pricey in other ways. Consider Bend, located in the center of the state. Sometimes called the "Palm Springs" of the Pacific Northwest, this mild-weathered, golf-course filled town is a retiree favorite. But the cost of living in Bend is nearly 20% higher than the national average, and the median price of a home is $75,000 or so higher than average.
But retirees craving the vibrant lifestyle of the Pacific Northwest needn't worry, adviser say -- there are plenty of other less expensive hotspots in this state. Read on for four recommendations.
Portland: For the foodie
By the numbers
- Population: 569,553
- Median home cost: $266,200
- Cost of living: 18.6% higher than average
- Unemployment: 9.5%
This city owes its popularity as a retirement destination to that enviable combination of a thriving urban environment, including great restaurants, and plenty of outdoor activities, says Barbara Chiapuzio, a native of Portland for 20 years. Bon Appetit magazine named Portland "America's Foodiest Small Town" in 2009, and locals say the scene just keeps getting better. The "farm to fork" movement is big here with dozens of restaurants serving organic, locally grown cuisine. The city also boasts fleets of top-notch food carts and earns its nickname "Beertown" with dozens of well-regarded microbreweries.
On the culture front, there's the Portland Opera, Oregon Symphony and a rich smattering of music and arts festivals. And though the crime rate is quite low, the homeless population is large, says Chiapuzio.
Corvallis: For the college town experience
By the numbers
- Population: 52,691
- Median home cost: $238,400
- Cost of living: 10.6% higher than average
- Unemployment: 6.7%
When people think of college towns in the state, Eugene -- home to the University of Oregon -- often tops the list. But there's a slightly cheaper alternative to Eugene that's still got a lot of the same attractions: Corvallis. The presence of Oregon State University brings much of the cultural and educational opportunities to Corvallis (this month, the university offered everything from a quilting exhibit to a reading by mystery novelist Michael Boyce), and its prime location in the Willamette Valley (the city is nicknamed "Heart of the Valley) mean a lot of hiking and biking opportunities. "We're very bicycle friendly," says David Gilbert, the executive director of Visit Corvallis. "You can ride around the entire city and never ride on a city street." Named the "most innovative" city by scientists at Los Alamos National Laboratory and the Santa Fe Institute due to its large number of patented inventions and economic output for its size, Corvallis may delight innovative, entrepreneurial boomers.
But if you want to jet off to Paris on a whim, this town does have drawbacks: The nearest major airport is 45 minutes away in Eugene and still, that airport doesn't have direct international flights -- so residents either have to make a connection along the way or drive an hour and a half to Portland. And even though temperatures seldom climb above 90 and it rarely snows, "the tradeoff is rain," says Gilbert. (Corvallis averages about 55 inches per year, he says.)
Medford: For the artist
By the numbers
- Population: 72,047
- Median home cost: $248,900
- Cost of living: 13.2% higher than average
- Unemployment: 12%
Artsy Ashland has long attracted culture-seeking retirees. Home to the renowned Oregon Shakespeare Festival, Ashland stages nearly 800 performances a year. But with a cost of living that's nearly 30% higher than average, Ashland has become unaffordable for many.
Medford, just 15 miles down the road, is an alternative worth considering. True, it's not quite the hotspot Ashland is -- plenty of residents find themselves frequently buzzing over to their more cultural neighbor, locals say. But, says Angela Wood, sales director for the Medford Convention & Visitors Bureau, "We have lots of art galleries and great music and arts events like the Medford Jazz Festival and Art in Bloom." Medford is also located in an emerging, and award-winning, wine region, she adds. "There are a lot of wineries within a short drive if you like wine-tasting," she says.
Florence: For the outdoor enthusiast
By the numbers
- Population: 8,895
- Median home cost: $176,500
- Cost of living: 1.8% higher than average
- Unemployment: 10.3%
Florence is not a typical beach town. Given the cooler temperatures, sunbathing is less popular than sandboarding (it's like snowboarding, but on sand dunes). Residents' passion for the outdoors doesn't end there. There are 26 miles of hiking trails in the beautiful Cape Perpetua area alone and kayaking and fishing in both the ocean and two nearby freshwater lakes. Plus, "there's a quaint downtown that feels like a historic fishing village," adds Forsha.
For those needing easy access to bigger cities, however, Florence can seem isolated, locals say. To get to a major airport residents need to drive 45 miles to Eugene (and even that has limited flights and no international direct flights) or 40 miles to the Southwest Oregon Regional Airport (which also has limited flights).
Corrections & Amplifications
An earlier version of this story incorrectly stated that the movie "Twilight" was set in Oregon.