Best Places for Retirees

Warm weather and the availability of early tee times will always help make cities attractive to retirees. But early signs suggest that as baby boomers begin to enter a longer and more active retirement than their parents, they're looking for more.

To determine the best places for retirees, Forbes.com compared 100 of the largest U.S. metropolitan areas along traditional criteria, including availability of health care and leisure activities. But we also looked at new factors, like the "retirement job market"--and came up with a surprising list of winners.

The top U.S. city for retirees is Tampa, Fla. The city's cost of living and tax burdens are relatively low, and health-care costs and access are very favorable. And Tampa's arts and leisure rank is in the top third of cities measured, so there's plenty to keep retirees active.

Florida is often considered a hot spot for retirement, but based on the criteria we used, only one other city in the Sunshine State (Jacksonville) made the top 10. Instead, Tampa was joined by such unlikely candidates as Fort Worth, Texas, Washington D.C., and Indianapolis, Ind.

To put together the list, we ranked each city on factors including cost and availability of health care; sales, property and income-tax rates; an index of arts and leisure activities ranging from museums to parks to sports teams; and cost of living, based on data from Sperling's BestPlaces.

But we also added a Forbes.com study of inter-metro migration patterns of people between the ages of 55 to 65. That showed us where people approaching or beginning their retirement are actually going, and which places are worth relocating to, as opposed to which cities simply have aging populations.

The most often relocated-to city? Phoenix. The weather and tax rates and are amenable to retirees, and the city boasts good health-care availability and costs. Drawbacks include a cost of living above national averages and relatively underwhelming number of culture activities.

Other interesting patterns emerged in our analysis, showing the growth of new retirement centers. Washington, D.C., beat Miami; Portland, Ore. attracted more boomers than Orlando, Fla., and Boise, Idaho; and Idaho drew more older migrants than San Diego.

Why are these migratory patterns changing? One reason is a new factor, never before worried about much by retirees: jobs. For the boomers, retirement won't be throwing a switch between working one day and playing canasta the next. Instead, it's increasingly becoming a period where people cycle in and out of working and not working.

Demographers use terms like "working retirement" or "active retirement" to express these new retirement patterns, where boomers are often going into small businesses, teaching, consulting jobs or jobs where they can do what they've always wanted to do.

"There's a curious thing about boomers, because in their early formative years they went through a very idealistic time," says Larry Cohen, director of consumer financial decisions at SRI Consulting Business Intelligence. "It won't be as important for them to earn six-figure salaries, so long as they don't [spend] their nest egg."

To reflect this change, we included the quality of the retirement job market in our rankings. A retirement job is classified as either a full- or part-time job done after retiring from a long-term career. Using data from RetirementJobs.com, cities were assigned a score based on the quality of this growing job market.

Boomers also want to live in cities that younger people enjoy. "You have baby boomers buying properties where they can get their children and grandchildren to come visit," says David Hehman, president of EscapeHomes.com, a San Francisco-based real estate research company. "That desire is often large."

Maybe all of these changes are representative of boomer denial, and people who don't feel like they're getting old. But life expectancies are the highest they've ever been, and climbing--so maybe there's something to it.

"Boomers think, 'Why is everyone getting older while I stay the same?'" says Cohen. "They don't feel that old or think they look that old ... and they might be right. The time that they're going to have in retirement is going to be significantly longer than previous generations ... and [they] are moving toward what they want and like to do instead of what they have to do."