Here's where retirees are moving

Allworth Co-CEO Scott Hanson shares some new data on the international and domestic destinations that more and more retirees are starting to call home.

Just where are people retiring to these days? And more importantly, why are they retiring to those places?

As I’ve recently written, in some circles here in the U.S., the word “retire” is itself beginning to get … well, close to being retired.

That’s because due to longer lifespans, better overall healthcare, and a host of changing expectations, fewer people are embracing what we might have always thought of as a “traditional retirement.”

The reason most of us just can’t up and entirely quit using the word “retire” is that it’s ubiquitous. (And because no one has yet come up with a synonym that concisely captures the essence of today’s retirees: “modern-post-career-but-still-very-active-and-engaged-people.”)

It’s clumsy.

When we refer to retirement today, be it to open a new business, to volunteer, to pursue a passion or hobby, to return to school, to work full or part time at something we’ve always wanted to do, or maybe some combination of each of these … there’s currently no single phrase that nails it.

Let’s accept it and move on to destinations.

Simply, where exactly are people moving when they retire … and why?

First, international retirement destinations

International Living magazine’s “Best Places in the World to Retire in 2022,” publishes an index that calculates the number of Americans who are moving to a particular destination and combines it with important financial considerations such as cost of living, ease of residency, and, of course, access to top-notch healthcare. (This list is not based on total retirees, but upon which countries ranked highest for satisfaction levels.)

The Top 10 rated international destinations for American retirees for 2022, are:

Panama (first time as #1)
Costa Rica
Mexico
Portugal
Colombia
Ecuador
France
Malta
Spain
Uruguay

Panama topping the list of Americans’ international retirement destinations was a bit of a surprise to me, but after conducting some research, it’s no mystery why. Panama is extremely affordable, the weather and overall infrastructure are all good, and, most importantly, in-part due to the existence of the Panama Canal, and a century-plus bottleneck of shipping and luxury yacht travel traffic, it has excellent healthcare options.

The other obvious factor common to all these international locales is, that outside the Alps and parts of France, they are all warm weather destinations.

Is retiring abroad a viable option?

I have a lot of clients and friends who have retired abroad. Some love it, while others feel it was a huge mistake. The #1 complaint is predictable: they miss their family and friends. (Culture shock ranks right up there, too, as living someplace and visiting are entirely unique experiences.)

Of course, most people aren’t going to retire abroad. They may indeed relocate once they leave their career, but they aren’t willing to fly over a border or an ocean to do it.

Where are the top domestic destinations for American retirees?

First, a few surprising statistics on relocation and retirement:

Just 226,000 Americans retired and relocated in 2021, the lowest in a decade and, due to COVID, a 43% decline from 2019
50% of those who relocated moved to a new state
The #1 destination for retirees who moved to a new state in 2021 was Tennessee (13.1%)1

Besides Tennessee, which five states attracted the most out-of-state retirees in 2021?

Florida (11.3%)
Pennsylvania (10.7%)
North Carolina (10.3%)
South Carolina (9.4%)
Kansas (7%)

Which five cities were the most popular for out of state retirees?

Pittsburgh (7.2%)
Kingsport-Bristol, Tennessee (3.9%)
Detroit-Warren-Livonia (3.9%)
LA-Long Beach-Anaheim (3.8%)
Nashville (3.6%)

5 great cities to retire to in 5 different regions

In the South there’s Athens, Georgia.

The upside of Athens is it’s a great college town 70 miles east of Atlanta. The median home price is $289,000, which is 23% below the national average. There’s a ton of great culture, the air is rated as “very clean,” and your Social Security and as much as $65,000 per individual of retirement income may not be subject to any state income tax.

Next, there’s Fargo, North Dakota.

Fargo became famous when it appeared as the backdrop (and punchline) in the award-winning Coen brothers’ movie “Fargo,” but it’s actually a popular retirement city. The reasons include that its median home price is $271,000, which is 28% lower than the national average, there is terrific access to healthcare with an excellent ratio of doctors to patients, the air quality is first rate, and it’s not prone to natural disasters. Lastly, the largest city in North Dakota is easy to walk and bike.

The downside of moving to North Dakota is that it does impose a state income tax on Social Security income.

Then there’s Pittsburgh, Pennsylvania.

An early 20^th Century economic power-center due to industrialists such as Andrew Carnegie and George Westinghouse, there was a time some years back that Pittsburgh was thought to be a relic of the past and in decline.

But perhaps no other major U.S. city has so thoroughly reinvented itself and recovered from the loss (or decline) of its premier industry (steel production) than has Pittsburgh, a cultural oasis in Western Pennsylvania.

The pros of Pittsburgh include a housing market that is 38% below the national average, no state income tax on Social Security, several terrific colleges that give it a youthful feel, much-loved professional sports teams, a doctor-to-patient ratio that is among America’s best, and it’s a city that, as it’s evolved, has become famously bike and pedestrian friendly.

The downside of Pittsburgh is the cold winters, so-so air quality, and a state inheritance tax.

Spokane, Washington.

Tucked in Eastern Washington 280 miles from Seattle, there’s pretty much no getting to Spokane by accident. But this mid-sized city of about 230,000 people has a lot to offer retirees, including good access to healthcare and the outdoors, and it has no state income tax.

The main downside of Spokane would probably be that home prices are 10% above the national average.

Sun City, Arizona.

Sun City is a bit different from the rest of this list in that it’s an artificial city of 45,000 built exclusively for healthy, active retirees.

But just because there are minimum age requirements to live there doesn’t mean it’s expensive. In fact, with an average home price of just over $300,000, houses there are 17% below the national median. Other positive factors in favor of Sun City include a strong regional economy, no state income tax on Social Security, no state estate tax, and a slightly better than the national average ratio of doctors-to-patients.

The downside of Sun City is the infamous heat, with a daily average summer high of well over 100 degrees.

I expect that when next year’s list appears, it will show a rebound to pre-2021 levels for the number of people who have retired and moved to new states. But until then, you get the idea: with almost four million people retiring annually, under 10% move to a new state or country. But those who do are generally seeking better weather, easy access to culture and healthcare, a lower cost of living, and fewer tax restraints than the locales they previously called home.

₁_{Study shows Tennessee is top destination for out-of-state retirees | WJHL | Tri-Cities News & Weather}