Inflation is changing where and how people retire.
Where to retire is a decision that comes with both emotional and financial implications. While many want to be as close to the grandkids as possible, an expensive city can drain one’s savings and take away from quality of life.
The U.S. Labor Department found that 1.5 million Americans who retired between 2020 and 2022 later re-entered the labor market. Another study from financial advisor Edward Jones found that 59% of Americans close to retirement age in 2022 delayed their plans to do so.
Every year, the U.S. News and World Report creates a list of the best places across the U.S. to retire. While affordability and tax rates together weigh most heavily on the ranking, factors such as resident quality of life and access to health care also contribute to earning a spot among the 150 largest cities across the country.
“Due to inflation, retirees are very concerned about finding an affordable place to live,” U.S. News Senior Editor Emily Brandon told MoneyWatch. “If you are living on a fixed income, it’s important for your budget to stretch as far as possible, and housing is the biggest expense for most people.”
Who Needs Florida (When There’s PA)?
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While four of the cities in the top 10 were in Florida, the state was not the one that came out on top of the most retirement-friendly cities. The fifth largest state in the country by population, Pennsylvania had five of the top 10 best cities in 2022.
In the heart of Amish country, Lancaster took the top spot as the single best place in the country to retire. The 60,000-person town is a 90-minute drive outside of Pennsylvania and ranked first due to a combination affordable housing (a median home lists for $285,000) and tranquil, small-town quality of life.
“Lancaster, Pennsylvania, offers a balance between natural and commercial spaces that residents appreciate,” U.S. News and World Report wrote in its ranking. “Expansive farms rub elbows with manicured suburbs, which lead right into the bustling city.”
Pennsylvania cities like Harrisburg, York, Allentown, and Reading also all appeared in top 10 list. While Florida’s Pensacola took the second spot, the state’s long-standing association as the place where one goes to retire has been sending home prices up in many destinations that sit right on the water.
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Retirement Is What You Make It
In recent years, many retirees coming to Florida have been choosing more inland locations for affordability. Florida’s Tampa, Naples, and Daytona Beach all appeared in the top 10 while Michigan’s Ann Arbor was the one outlier outside of Pennsylvania and Florida.
“Ann Arbor is a city of contrasts,” U.S. New and World Report wrote. “It is at once rural and urban, sporty and smart, outdoorsy and high-tech, counterculture and high society. It is best known as the home of the University of Michigan, and locals here enjoy all the trappings of a stereotypical Midwestern college town.”
A ranking from Realtor.com earlier this year named Michigan’s Traverse City as the best place to retire. While Florida is often chosen for the year-round sun, retirees who don’t mind cold winters can get both a peaceful quality of life and a lot more bang for their buck closer to the Midwest–in 2022, an average house in Florida cost $415,762 compared to $234,386 in Michigan and $267,549 in Pennsylvania.
