4 Things to Consider about Your "Destination Retirement"

If sinking your toes in the sand or communing with cacti on the golf course are your idea of a dream retirement, then the tax-friendly, warm-weather states of Florida and Arizona are still the top two destinations for retirees. If, however, beach-bumming it or playing 18 holes a day sounds more like a vacation than a way of life, you’re not alone. For many Americans, retirement is less about slowing down than shifting gears, which means they have different expectations for how they spend their post-career time than past generations did. It also means where they choose to retire might look very different, too.

Although many people base their decisions almost solely on tax-friendliness, selecting a retirement destination is a multi-faceted decision, with lots of levers to push and pull. Here are four considerations you might take into account, along with tips on where they might lead you (Florida and Arizona aside):

• Healthcare quality and costs
• Youthfulness of the population
• Cultural enrichment
• Economic friendliness

1. Healthiest senior populations

Next to taxes, access to and the affordability of health care top many lists of retirement concerns, so getting a feeling for the health of an area’s retirees is a good idea before deciding on a destination. Not surprisingly, states whose citizens engage in healthy behaviors (such as eating right and staying active) and which make high-quality care and community support available to its population boast the healthiest retirees. According to the United Health Foundation’s senior health rankings report, the three healthiest states for seniors in the U.S. (with corresponding healthcare costs for retired couples from Kiplinger’s best states for retirement) are:

1. Utah (about 3% below national average)
2. Hawaii (11.4% below national average)
3. New Hampshire (almost exactly the national average)

However, affordable care is only part of the story. Medical care and support for seniors may not be as accessible in less expensive states. For instance, Minnesota, which Caring.com ranks at 31^st in the nation for affordable healthcare, is also ranked 1^st in the nation for senior care options. Similarly, Washington – which scores 16^th in the nation for the health of its senior population – ranks a dismal 37^th for healthcare costs but 2^nd for its service offerings.

Conversely, the same study ranks Utah 2^nd in the nation for its affordable care but 39^th for its elder support, and Alabama, which ranks 1^st for affordability is also ranked one of the five worst states for its support services.

Researching health care options for your destination – costs, accessibility, and quality of care – is an important step in your decision process. But there are other ways of measuring and maintaining well-being that also bear consideration.

2. Youthful living amongst the young

If you’re a retiree (or soon-to-be retiree) with a youthful outlook, Florida may not suit you: A hefty 19.1% of its population is aged 65+ (almost 5% above the national average). And while it’s healthy to belong to a community of people of similar age, studies also find that intergenerational connections are mutually beneficial both for seniors and youth. Forming friendships with younger people keeps mature minds sharp, and the mentoring relationships that often emerge foster not only feelings of purpose but also a sense of legacy, while the younger recipients often find the experience and perspectives of their older friends helpful when they need a little tutelage or advice from a trusted source. Living in or near university towns energize many older adults, inspiring them to learn new things while they benefit from the youthful energy of school attendees. More youthful populations also tend to be more physically active, an important component of aging well. The three most youthful states, according to Kiplinger:

Utah: Only 10% of its population is 65 and older, and while the state isn’t as tax-friendly as others, it does offer a dizzying array of outdoor activities across 5 national parks, 7 national monuments, 5 national forests, and 43 state parks.

Colorado: This state ranks particularly high in clinical care and healthy behaviors, with low rates of obesity and inactivity in its 12.7% senior population.

Georgia: One of the 10 most tax-friendly states in the U.S., Georgia’s over-65 demographic is only 12.3% of the state’s population. Its cost of living and healthcare costs also fall below the U.S. average.

Maintaining a youthful outlook has numerous mental and physical health benefits, so it might benefit you to take a close look at the demographics of the area to which you plan to relocate. These can, in fact, significantly influence the next factor in your selecting a retirement destination: culture.

3. Cultural enrichment

Does your taste in music run toward Grand Ole Opry or Boston Pops? When you seek out museums, are you looking for modern or indigenous art? Does history make you yawn, or could you spend years admiring Revolutionary-era architecture? Is your ideal theater an old restored church, or will only Broadway do?

While small towns and rural areas can be home to lively theater and music scenes, as well as havens for artists and craftspeople of all kinds, larger cities often offer a wider variety and greater depth of cultural enrichment. And cities, in general, are often considered “incubators for healthy aging” where empowered seniors use their voice to become agents of change.

How you spend your free time will be at least as important in retirement as it is prior to retirement. Fully explore the area to which you’re considering relocating so you get a good feel for what it culturally offers its residents.

4. Economic friendliness

Of course, you can’t completely ignore the economics of your move. The influence of economic factors on your choice of retirement location will likely be complex, with tax-friendliness only part of the equation. For instance, while Nebraska ranks highest in the U.S. for its fiscal stability, it’s one of the least tax-friendly states for retirees. On the other hand, although Hawaii’s cost of living is a whopping 87% above the national average, the average income per senior household is almost 34% above it at $71,997. Moreover, Hawaii is tax-friendly, and its healthcare costs come in at 11.4% below the national average.

Tax-friendly Tennessee ranks 3^rd in the nation for its fiscal stability, and its cost of living falls 12% below the nation’s average, balanced, however, by an average income for retirees that also falls about 11% below the national average.

If you want to continue working after retirement, you’ll need to research where seniors are still hired for the kinds of work you want to do. For example, Virginia might be a good place to land. It was highly-ranked as one of the best states for employment opportunities for retirement-age workers, with nearly 20% of its citizens aged 65 and older still in the workforce.

The interplay among cost of living, healthcare costs, and the financial health and employability should be weighed equitably against how you’ll be taxed at state and local levels. Your financial advisor should be able to assist you with calculating the economics of any move you’re contemplating.

The best place to retire is…a balancing act

The bottom line where choosing a retirement destination is concerned is that you have to think outside the tax brackets. Making your savings last and finding affordable health care are certainly important. But where you call home next will be a complex mix of factors that make up the quality of the life you want for yourself.