This article takes a look at AARP’s most affordable places to retire in recent years. If you prefer to skip our detailed analysis of retirement trends, you may go to the AARP’s 5 Cheapest Places to Retire in Recent Years.
Retirement Trends and AARP’s Top Picks for Affordable Living
The pandemic relocation trend has died down. However, one state still seems to allure residents year after year — the popular Sunshine State of Florida. According to U-Haul Holding Company (NYSE:UHAL), Florida was the second-most popular destination for U-Haul movers in 2022, after Texas.
“People are finding that Florida is still a good place to live with a good environment.”
– Ed Hatcher, a vice president with U-Haul Holding Company (NYSE:UHAL)
Florida is one of the best states to live because of the year-round warmth, and people “seem to appreciate tax policies.” However, places like Ocala and Tampa Bay aren’t steering the crowd towards them. Rather, it is the smaller cities people are interested in, U-Haul Holding Company (NYSE:UHAL) found.
Hire a Helper notes that 234,000 retired Americans relocated to a different state in the year 2022. 12% of these migrating retirees chose the Sunshine State for their golden years. Besides Florida, the states that most retirees are moving to include North Carolina, Michigan, Arizona, and Georgia. The report also found that 1 in 8 retirees have been relocating to cut their housing expenses. Sadly, the US housing market isn’t very lucrative for home-buying retirees right now. According to a report by Redfin Corporation (NASDAQ:RDFN), the monthly mortgage payment in the US reached an all-time high of $2,632 for the four weeks ending September 10. Due to increasing home prices and a 7%-plus mortgage rate, buying a home has become pricier than ever.
Big Four accounting firm KPMG further notes that the supply of single-family homes is tight, and may be a determining factor driving down the economy. With mortgage rates climbing, home buyers are being left in a frenzy, and existing home sales continue to demonstrate a downward trend. The National Association of Realtors further revealed that existing home sales in October were down by 4.1% from September 2023. This current housing market is significantly challenging for retirees who depend on the value of their homes. This is because retirees who have homes often use it as a potential source of funds, such as through collateral-based loans, during difficult times. Consequently, the decline in home sales will leave retirees unprepared for their retirement, especially those who have been counting on their real estate for funds.
“A lot of Americans are sitting on piles of money in their homes, and some are opting to cash out even if it means giving up their low mortgage rate; they’re worried there’s a possibility home prices will fall if rates remain elevated. We expect rates to remain high for the foreseeable future. But we also expect prices to stay high into next year. Housing supply is so strained that even a small uptick in listings lures buyers off the sidelines, bolstering sales.”
– Redfin Corporation (NASDAQ:RDFN) Chief Economist Daryl Fairweather.
According to Redfin Corporation (NASDAQ:RDFN), there has been an 8.9% year-over-year decrease in new home listings as of September 2023. Consequently, numerous retirees and prospective home buyers who are selling their existing home and purchasing a new one must accept the drawback of potentially accepting a higher mortgage rate.
In such a case, a wise move for retirees is to choose an affordable place to relocate, particularly with a lower-tax environment. According to a report called Empower, one of the most affordable US cities to retire, is Las Vegas, Nevada. Famous for its sunshine, tax-friendly policies, and lots of entertainment, the city is a popular choice for retirees looking to move. Pittsburgh, Pennsylvania, is also one of the best places for seniors to live thanks to its strong focus on healthcare.
However, both of these places don’t seem to be recommended by AARP. AARP, formerly the American Association of Retired Persons, has devised its own list of top livable communities of 2023. The AARP Livability Index Top 100 is a data-driven, web-based tool that measures every community and neighborhood in the US for the key amenities and services that affect the quality of life for people of all ages in the areas of Housing, Transportation, Neighborhood, Health, Environment, etc. From their list, we have sorted out AARP’s most affordable places to retire in recent years for retirees.
Pixabay/Public domain
Methodology
To compile the list of AARP’s most affordable places to retire in 2023, we have used the AARP Livability Index Top 100. We assessed the cost of living for all communities, cities, and counties provided in the list, filtering out the ones that had a cost of living higher than the US average. This gave us a list of affordable places to retire. Next, we arranged them in descending order from those with the highest cost of living index to the lowest.
Cost of living indices have been derived from Best Places. An index below 100 signifies a cost of living below the national (US) average. For example, an index of 97.9 means cost of living is 2.1% lower than the national average. Similarly, livability scores above 60 signify an above-average quality of life. The median listing home price is sourced from Redfin Corporation (NASDAQ:RDFN), Realtor, and Zillow. Meanwhile, livability scores, population, and percentage of seniors aged 65 and above have been derived from the AARP database.
Here is the list of AARP’s Most Affordable Places to Retire in Recent Years:
25. Allentown, Pennsylvania
Cost of Living Index: 97.9
Median Home Price: $215,000
Livability Score: 61
Population: 121,156
Seniors aged 65 and above: 12%
Allentown, Pennsylvania is a great place to retire owing to its vibrant arts scene, active lifestyle, and affordable housing options. The state of Pennsylvania itself is revered for its taxes and cost of living, making it an ideal retirement destination.
24. Los Alamos County, New Mexico
Cost of Living Index: 97.7
Median Home Price: $633,000
Livability Score: 67
Population: 18,976
Seniors aged 65 and above: 18%
Huddled in the mountains of Northern New Mexico, Los Alamos County is a scenic yet serene place to retire that offers hundreds of miles of biking, hiking, and equestrian trails.
23. Traverse City, Michigan
Cost of Living Index: 95.8
Median Home Price: $459,000
Livability Score: 66
Population: 15,525
Seniors aged 65 and above: 22%
Next on our list of AARP’s most affordable places to retire is Traverse City, located on the shores of Lake Michigan. Amidst the natural beauty and picturesque bay side setting, retirees will find a strong base of modern amenities and outdoor recreation.
22. Montpelier, Vermont
Cost of Living Index: 94.2
Median Home Price: $554,000
Livability Score: 66
Population: 7,434
Seniors aged 65 and above: 24%
The classic New England town of Montpelier is embraced by the beautiful landscapes of Vermont, characterized by rolling hills, forests, and picturesque rural scenery. The downtown is small yet attractive, and retirees love it for its small-town charm.
21. Rochester, Minnesota
Cost of Living Index: 94.2
Median Home Price: $320,000
Livability Score: 65
Population: 117,134
Seniors aged 65 and above: 16%
Minnesota is safe to be considered as one of AARP 2023’s top states for retirement, evident from the increasing number of affordable options making their mark on our list. In particular, Rochester is a good place to retire because of its vibrant cultural scene, affordable housing, high-quality healthcare (home to the renowned Mayo Clinic), and ample recreation opportunities.
20. Olmsted County, Minnesota
Cost of Living Index: 94.2
Median Home Price: $335,000
Livability Score: 63
Population: 156,446
Seniors aged 65 and above: 15%
One of the top reasons to retire in Olmsted County is that it is home to the world-famous Mayo Clinic, offering exceptional healthcare services. The entire county deserves a separate place on our list due to its high quality of life, natural beauty, and numerous cultural attractions.
19. Lancaster County, Nebraska
Cost of Living Index: 92.6
Median Home Price: $296,000
Livability Score: 62
Population: 315,976
Seniors aged 65 and above: 14%
Retirees in Lancaster County get to enjoy a quality of life that is on par with other metropolitan areas, but at a lower cost. Housing affordability, happiness, and quality of healthcare have earned it a spot on our list.
18. Lincoln, Nebraska
Cost of Living Index: 92.6
Median Home Price: $285,000
Livability Score: 63
Population: 286,388
Seniors aged 65 and above: 14%
Lincoln is one of the best places to retire in 2023, and affordable living costs aren’t the only reason. The capital city is also known for its vibrant cultural scene, outdoor recreational opportunities, and access to lifelong learning programs.
17. Allegheny County, Pennsylvania
Cost of Living Index: 91.8
Median Home Price: $230,000
Livability Score: 58
Population: 1,218,380
Seniors aged 65 and above: 19%
Allegheny County is another one of AARP’s affordable places to retire due to its rich cultural scene (particularly around Pittsburgh), high-quality healthcare facilities, and access to institutions such as the University of Pittsburgh and Carnegie Mellon University.
16. Sioux Falls, South Dakota
Cost of Living Index: 90.7
Median Home Price: $312,000
Livability Score: 63
Population: 180,927
Seniors aged 65 and above: 13%
One of the best places to retire for AARP is Sioux Falls, which is also endorsed as one of the best by reputable sources such as Forbes. Retiring in this city means stretching your dollar further due to its low cost of living and affordable housing. Sanford and Avera are two of the best healthcare systems here.
15. Minnehaha County, South Dakota
Cost of Living Index: 90.7
Median Home Price: $341,000
Livability Score: 62
Population: 191,682
Seniors aged 65 and above: 13%
The entire Minnehaha County deserves recognition owing to its lively community, many amenities, and a mix of cultural attractions. Housing options are lower than the national median at $341,000 as of October 2023.
14. Iowa City, Iowa
Cost of Living Index: 89.6
Median Home Price: $279,000
Livability Score: 64
Population: 75,849
Seniors aged 65 and above: 11%
Iowa City is a small college town boasting a high ratio of physicians per capita, per The Gazette, good air quality, and affordable living options. The town also features a strong healthcare system, well-maintained parks, and a range of cultural and recreational attractions.
13. La Crosse, Wisconsin
Cost of Living Index: 89.5
Median Home Price: $230,000
Livability Score: 66
Population: 51,543
Seniors aged 65 and above: 13%
Overlooking the Mississippi River, La Crosse is another one of AARP’s affordable place to retire. The city is home to quality healthcare, many amenities, and a variety of outdoor activities.
12. La Crosse County, Wisconsin
Cost of Living Index: 89.5
Median Home Price: $270,000
Livability Score: 62
Population: 118,168
Seniors aged 65 and above: 16%
La Crosse County is an epitome of beauty, featuring picturesque landscapes and scenic views of the Mississippi River. Retirees have a chance to embrace nature and enjoy the many recreational activities.
11. La Crescent, Minnesota
Cost of Living Index: 86.7
Median Home Price: $377,000
Livability Score: 70
Population: 5,135
Seniors aged 65 and above: 19%
Known as the “Apple Capital of Minnesota,” retirees will enjoy their lives in La Crescent because of its scenic views and thriving wildlife population. The city emits a small-town vibe yet features all the necessary amenities.
10. West Des Moines, Iowa
Cost of Living Index: 86.6
Median Home Price: $314,000
Livability Score: 64
Population: 66,724
Seniors aged 65 and above: 14%
West Des Moines is one of the best places to retire in Iowa. The city enjoys a high quality of life, characterized by modern amenities and a safe living environment.
9. Des Moines, Iowa
Cost of Living Index: 86.6
Median Home Price: $193,000
Livability Score: 61
Population: 215,408
Seniors aged 65 and above: 12%
One of the best places to retire on a budget is Des Moines, Iowa. The city offers a range of amenities for retirees, such as quality healthcare services, cultural attractions, parks, and plenty of recreation.
8. Pierre, South Dakota
Cost of Living Index: 85.1
Median Home Price: $260,000
Livability Score: 69
Population: 13,908
Seniors aged 65 and above: 13%
One city where retirees live in South Dakota is Pierre. Retirees enjoy an active lifestyle here; enjoying fishing, hiking, and camping in the summers, and snowmobiling and cross-country skiing in the winters.
7. Decorah, Iowa
Cost of Living Index: 84.7
Median Home Price: $296,000
Livability Score: 66
Population: 7,615
Seniors aged 65 and above: 29%
Embraced by hills, bluffs, and the Upper Iowa River; Decorah is a beautiful place to call home. The city embraces a small-town charm, friendly atmosphere, and offers numerous recreation opportunities.
6. Wausau, Wisconsin
Cost of Living Index: 84.7
Median Home Price: $170,000
Livability Score: 63
Population: 38,685
Seniors aged 65 and above: 17%
Home to a vibrant downtown, Wausau offers an ideal combination of small-town living and modern amenities. There is a strong sense of community, and residents enjoy an active lifestyle.
Click to continue reading and see the AARP’s 5 Cheapest Places to Retire in Recent Years.
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Disclosure: none. AARP’s Most Affordable Places to Retire in Recent Years is originally published on Insider Monkey.