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Choosing the Best Place to Retire: 7 Crucial Factors to Consider Thumbnail

Choosing the Best Place to Retire: 7 Crucial Factors to Consider

By Dan Miller, CFP®

Imagine you could simply close your eyes and find yourself living your dream retirement. What does it look like? Lounging by serene beaches or strolling through familiar streets?

Regardless of when you retire or how you plan to spend your newfound free time, your choice of retirement location holds tremendous significance. It can influence your daily expenses, transportation, relationships, and overall quality of life.

So, how do you go about finding the perfect spot? Let's delve into the seven key factors to consider when deciding where to live in retirement.

Factor #1: Cost of Living

The cost of groceries, gas, utilities, dining out, recreational activities, and day-to-day living expenses can vary widely from one retirement destination to another. Striking the right balance ensures you can enjoy your preferred lifestyle while making your retirement savings go the extra mile.

Tip: Begin your research with reliable sources like the Federal Reserve to access up-to-date cost-of-living data.1 Or better yet, embark on exploratory trips as a tourist to gain firsthand experience of local expenses.

Factor #2: Climate

Consider the climate of your prospective retirement location. Are you prepared to handle dramatic temperature variations or seasonal shifts? Extreme weather conditions can affect your daily activities, necessitate extra precautions, and introduce new challenges.

Tip: Renting for at least six months before buying a home allows you to uncover climate-related issues that might be deal-breakers, such as extreme summer bugs or harsh winter temperatures.

Factor #3: Proximity to Loved Ones

How far will you be from your loved ones, especially children and grandchildren? Will your choice of location limit visits to just a few times a year? Proximity to family members can significantly impact your post-retirement happiness, ease of staying connected, and the ability to offer or receive assistance.

Tip: If you opt for a retirement location that's not necessarily close to loved ones, consider areas with access to commercial airports, making travel more convenient.

Factor #4: Staying Active

Where can you pursue your favorite activities and interests? Are there ample opportunities to stay active and socialize with like-minded individuals? Staying active and social can be key to your happiness as a retiree. And being able to enjoy your favorite activities won't be as fulfilling if you can't enjoy them with the folks, you care about.2

Tip: Seek out areas that offer easy access to events, activities, and volunteering opportunities to keep you active and engaged with peers of your age group.

Factor #5: Access to Healthcare

Investigate the availability of healthcare services, including doctors, dentists, specialists, pharmacies, and emergency healthcare in different retirement destinations. Accessibility to necessary medical equipment and supplies is also essential for a comfortable retirement.

Tip: Consider telemedicine, medication subscriptions, and medical supply delivery options to minimize the need for travel for healthcare services. If contemplating retirement abroad, remember that Medicare does not cover overseas healthcare.3

Factor #6: Tax Considerations

Examine the tax-friendliness of potential retirement locations. Will you be subject to higher income or Social Security taxes? Some states, like Alaska, Florida, Hawaii, Illinois, Mississippi, and New Hampshire, are known for their tax-favorable retirement policies like no tax on Social Security or pension income.4

Tip: Consult a financial professional to evaluate your retirement tax situation, especially if you plan to work part-time during retirement, as this may affect your tax liability.

Factor #7: Inflation

Inflation can significantly impact retirement savings, and its effects can vary from one area to another. Some cities experience sharp price increases during inflationary periods, while others remain relatively insulated.

So, which cities have been hit the hardest by recent bouts of inflation? Anchorage, Phoenix, Atlanta, Seattle, and Miami are just a few, according to recent data. On the flip side, other locations haven't seen huge price jumps due to recent inflation.5

Tip: Keep an eye on local food prices as an indicator of inflation's impact. Additionally, consider the option of part-time work during retirement to counteract the effects of inflation and ensure financial peace of mind.

Choosing the ideal place to retire involves careful consideration of various factors. Your decision will not only affect your day-to-day life but also your long-term financial security and overall happiness. By assessing the cost of living, climate, proximity to loved ones, opportunities for staying active, healthcare access, tax implications, and inflationary trends, you can make an informed choice and embark on a fulfilling retirement journey.

Remember that a well-planned retirement is not solely about how much you save but also where you choose to live out your golden years. Who knows, you may not even move!


  1. https://meric.mo.gov/data/cost-living-data-series 
  2. https://www.cnbc.com/2023/03/10/85-year-harvard-happiness-study-found-the-biggest-downside-of-retirement-that-no-one-talks-about.html 
  3. https://travel.state.gov/content/travel/en/international-travel/while-abroad/retirement-abroad.html 
  4. https://money.usnews.com/money/retirement/baby-boomers/slideshows/the-most-tax-friendly-states-to-retire?onepage 
  5. https://thehill.com/homenews/nexstar_media_wire/3597703-these-cities-are-hit-hardest-by-inflation-report/ 
Dan Miller, Kaleb Robuck, and Marcus Taylor are investment adviser representatives of, and securities and advisory services are offered through, USA Financial Securities Corp. (Member FINRA/SIPC). USA Financial Securities is a registered investment adviser located at 6020 E Fulton St., Ada, MI 49301. Milestone Financial Group is not affiliated with USA Financial Securities.