Lower Costs

• If you want to keep your living costs reasonable, you might need to reconsider living in some of the nation's most expensive areas. Small-town America has a lot to offer retirees, including less cash outlay for housing expenses and public services. A 2009 US News report includes towns and major cities where the median cost for a three-bedroom house was less than $150,000, along with other favorable criteria that helps retirees spend less and conserve their resources. Chattanooga, Tenn., and Cocoa, Fla. (near Orlando), ranked high on this list. Housing prices barely topped $100,000 in Omaha, Neb., home of financier Warren Buffett. Affordable cities, including college towns that offer the benefits of culture, sports or exceptional senior perks included Pittsburgh, Penn.; Binghamton, N.Y.; Eau Claire, Wis.; and South Bend, Ind. (home of Notre Dame University). San Antonio, Texas, a metropolitan area with employment growth prospects and no state income tax, also made the US News list, along with Montgomery, Ala., and Roswell, N.M.
  
  

Enjoying the Simple Life

• Perhaps your retirement dream is to downsize and simplify so that you can focus on your passions and pleasures such as fishing, skiing or community service. AARP Magazine says that you can combine affordable living costs with a median housing price of less than $175,000 with your personal interests and the simple life. Consider Montpelier, Vt., a town with fewer than 10,000 permanent residents, near world-famous ski slopes in Stowe. Greenville, S.C., Logan, Utah, and Ames, Iowa, make the simple life list with populations below 100,000. These cities offer excellent hiking, biking, canoeing and other outdoor recreation options. Tucson, Ariz., earns its place on this list with 286 average days of sunshine annually and its proximity to the Coronado National Forest and the Santa Catalina Mountains.
  
  

Taxes

• Once you are on a fixed income, unanticipated tax bills could quickly deplete your resources. US News factors local tax rates into their selections of potentially great places for retirement. Because taxes vary so much by location, investigate tax obligations beforehand if you are considering a move. Using 2006 tax data, US News shows that a retired couple with a $30,000 annual income and a home valued at $175,000 would pay substantially more state and local taxes in Pennsylvania ($7,586) than in Delaware ($172). The annual average tax bite for this asset bracket was $3,396. At $60,000 annually, with a home value of $225,000, the tax rate averaged $5,382. However, the tax difference was over $6,000 between the low in North Carolina and the high in Connecticut.