10 cheap places to retire that offer great quality of life

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Galveston
Image Credit: Galveston Chamber of Commerce
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When it comes to retirement, you want to live in a place where you’ll enjoy a great quality of life and where your money will stretch the furthest.

Kiplinger has crunched the numbers for the top retirement spots in 50 states and narrowed down a list of places where the following criteria are present: Affordable homes, great dining options, a vibrant arts scene, outdoor recreation options, good health care networks, no excessive traffic congestion, a laid-back lifestyle, proximity to major metro areas, walkable downtowns, strong local economies, reasonable property taxes and even some tax perks for retirees.

Read more: Top 10 highest paying work-at-home careers

10 affordable places where you’ll actually be happy retiring

Galveston, Texas

Texas has no estate tax and no state income tax. Property taxes, meanwhile, will run you a median of just under $3,000.

Ensenada, Baja California

Dust off your passport! This Mexican seaside town attracts a lot U.S. retiree expats. One word of advice from Kiplinger: You might consider renting rather than buying because of local laws that limit foreigner ownership of coastal property.

A modest apartment close to the water can be had for about $500 a month. Want an ocean view? You’ll pay about $1,500 in monthly rent.

Lincoln, Nebraska

Located just outside the Omaha metro area, Lincoln offers a nice blend of the outdoor lifestyle and close proximity to the hustle and bustle for city lover.

You can get a four bedroom, three bathroom custom-built home with a three-car garage for $300,000.

Colorado Springs, Colorado

Nestled in the shadow of Pike’s Peak, Colorado Springs is where nature lovers live to access nearly 10,000 acres of parkland, more than 100 miles of urban trails and more than 150 miles of park trails.

And bonus for your wallet: No inheritance or estate taxes in Colorado!

Northfield, Minnesota

Love the philosophy of lifelong learning? Then you’ll love Northfield, home to St. Olaf College and Carleton College. Locals get to take in any number of art shows, lectures, film screenings, performances and more.

Kiplinger says you can snag a four bedroom, two bath bungalow built in the ’20s (with detached garage) close to downtown for $300,000.

Springfield, Massachusetts

Described by Kiplinger as “surprisingly affordable,” this mid-sized city situated on the outskirts of Hartford, Conn., has a variety of housing options in the $150,000 to $200,000 range.

While Massachusetts is known for its heavy tax burden, the state is friendly to retirees in the sense that it doesn’t tax Social Security benefits or government pension income. Though estates in excess of $1 million may be hit with an estate tax.

Ligonier, Pennsylvania

Love small town America? Then you’ll love Ligonier! This town with a wee population of just around 1,500 is chock full of close-to-town colonials for less than $200,000 and land-rich mountain homes for $300,000 and up.

And bonus: Pennsylvania won’t tax your Social Security benefits or distributions from 401(k)s, IRAs or other retirement plans. But your heirs may face an inheritance tax that starts at 4.5% and can go as high as 12%.

Easton, Maryland

Want to live in a town with a population that’s greater than four digits? Try Easton!

This mostly rural and coastal community offers a nice blend of outdoor activities and arts and culture.

Retirees won’t have their Social Security benefits taxed in Maryland. In addition, they may qualify for up to $29,000 in a pension exclusions, according to Kiplinger. Estates worth more than $4 million will be taxed beginning in 2018.

Hickory, North Carolina

North Carolina’s retirees don’t have their Social Security benefits taxed, though most other retirement income is considered taxable in the state. Fortunately, your heirs won’t face either estate or inheritance tax.

From a totally practical standpoint, your grocery budget will likely be low when you live in North Carolina. That’s because German hard discounter Lidl has chosen North Carolina as one of three states where its setting up shop before mounting a nationwide push.

Chattanooga, Tennessee

The very definition of a walkable community, Chattanooga features a real gem for outdoor enthusiasts in a 13-mile paved greenway called the Tennessee Riverwalk.

Residents of the Volunteer State enjoy paying no income tax or estate tax. Moreover, taxes on dividends and income from investments are currently being phased out. But you will pay hefty sales tax living in Chattanooga. The combined state and county rate is a whopping 9.25%.

What if you think you can’t afford to retire?

As you read this, you might be thinking, “Gee, that’s nice, but I don’t have a dime saved for retirement. I will probably work until I die.” That’s kind of a bleak scenario. But the beauty of it is that you can change that scenario starting today!

Maybe you feel there’s no money to save with. If you feel you couldn’t possibly do a 401(k) because there’s no room for any savings, money expert Clark Howard talks about starting by saving just 1%. That’s a scant one penny out of every dollar you earn.

Then, six months from now, bump your contribution up by just another 1%, and do it again in another six months. After five years of that, you’ll be saving 10% of your pay before any employer match! But by doing it just 1% at time, you won’t notice the difference in your paycheck because it’s all little baby steps.

You can open a Roth IRA at Charles Schwab for as little as $100 or for $1,000 through Vanguard.

See Clark’s investment guide for more details.

Read more: Over 40 with no retirement savings? Take these 6 steps

Big investments start with small steps

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Theo Thimou About the author:
Theo is director of content for clark.com. He has co-written 2 books with Clark Howard, including the #1 New York Times bestseller Clark Howard's Living Large in Lean Times.
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