May 26, 2009 -- Ed Coghlan's story is the same as so many others: Over the last year, the North Hills, Calif., owner of a corporate communications firm has seen his retirement accounts dwindle from the low seven figures to the mid-six figures. While Coghlan, 59, isn't destitute, that decrease does mean that he'll have to work longer than he expected.
"I planned on retiring at 65," he says. "Now I expect to be working until my 70s."
Coghlan's not alone. The baby boomers -- defined by the Census as those born between 1946 and 1964, and the largest and richest generation of Americans to date--have seen their savings depleted by 20%, or a total of $2 trillion during the current recession, according to Conemarra Partners, a New York-based consulting company. That means postponed retirement for many of them or, in some cases, settling down in spots far away from the tried-and-true options, such as Florida and Arizona.
Why aren't these sunny spots looking as sweet these days? It's a combination of the costs and the particular lifestyle retirees seek. Some retirees are now opting to wind down in college and commuter towns, or places where they have spent significant amounts of time in the past, according to Robert G. Kramer, president of the National Investment Center for the Seniors Housing & Care Industry (NIC), a market research firm in Annapolis, Md. These include Westchester, N.Y., and Lancaster, Pa.
Similarly, in Montgomery County, Pa., a commuter suburb on Philadelphia's affluent mainline, 14.9% of the overall population--778,048--is 65 and over. While it's not cheap to live here--average property tax on a home is $3,614 per year, according to the Tax Foundation, a nonpartisan tax research group based in Washington, D.C.--it's likely that seniors find comfort in the fact that Montgomery County is close to a major metropolis. It's also close to prestigious colleges such as Haverford, not to mention the parks and recreation that come with such proximity.
Nassau County on New York's Long Island possesses similar qualities as Montgomery, and ranks second on our list of the best places to retire. However, traditional, warm-climate options such as Pima County, Ariz., Palm Beach County, Fla., and Honolulu County, Hawaii, remain high on the list because they're affordable.
Behind the Numbers
To determine which U.S. counties are the best places to grow old, we used several data points, three determined by the U.S. Census Bureau: the percentage of those aged 65 and over in counties with a total population of 500,000, median monthly housing costs and median income of those 65 and over in each of these counties. To get a sense of overall economic health, we used the most up-to-date unemployment-rate data for each county, provided by the Bureau of Labor Statistics. Finally, with data provided by New York market research firm Onboard Informatics, we determined the number of hospitals, clinics and elder care facilities per 10,000 people in each county. Click here for a complete explanation of the methodology.
While the counties that make our list aren't necessarily the most affordable, they do offer more of what retirees tend to want: easy access to medical care, a healthy local economy and the opportunity to enjoy a fulfilling second act. Westchester County, for example, attracts seniors with its picturesque towns and villages along the Hudson River, like Tarrytown and Sleepy Hollow. Many seniors who want to remain close to their New York City-dwelling children also choose Westchester.
In many instances, retirees are actually moving out of elder care facilities and into their children's homes. Sometimes, it's for the financial benefit of the retiree; others, it's for the financial benefit of the children.
"Anecdotally, we've noticed that seniors across the country are moving out of elder care facilities to move in with their children," says Kramer. "There are children who are now unemployed that need mom or dad's income to get by."
For those who want to settle down on their own, a place like Montgomery County, Md., offers a bit of everything: good weather year-round, a strong economy (with a 2008 average unemployment rate of just 3.2%, while the national average was 5.8%) and a decent number of senior citizens--12.5% of the population--so that the retiree can be surrounded by his or her peers.
Low Costs, Warm Weather
The coastal county of Brevard in Florida has one of the highest percentages of senior citizens in the country, and that's mostly due to the area's warm, tropical weather. But several warm-climate spots also offer affordability.
Even in notoriously expensive Honolulu County, average property tax on a home is just $1,295 per year, according to the Tax Foundation. And while Florida's and Arizona's economies have been hit badly by the real-estate bubble's burst, Palm Beach County and Pima County now offer good deals on prime properties.
And they're not out of reach for retirees, even as bad as the economy is right now. Dan Owens, director of the Charlotte, N.C.-based consulting firm the National Active Retirement Association, points out that while baby boomers aren't as rich as they were in 2008, 77% of all U.S. financial wealth is still held by those 50 and over.
In many cases, retirees can as easily use what's left of their savings to build a new life within a retirement community--such as Montgomery County, Md.'s Leisure World, a community of 8,500 seniors that includes an 18-hole golf course, indoor and outdoor swimming pools, restaurants, tennis courts and on-site medical care--as they can to embark on a second career. The retirement account balances may be smaller, but with 78 million baby boomers already retired or expected to retire over the next few years, the number of options for retirement relocation are only increasing.
Coghlan certainly hasn't given up on a cushy second act, even if it's a few more years away than he expected.
"I'm still invested in the markets," he says. "I'm expecting a comeback."
To determine which U.S. counties are the best places to grow old, we used several data points, three determined by the U.S. Census Bureau: the percentage of those aged 65 and over in counties with a total population of 500,000, median monthly housing costs and median income of those 65 and over in each of these counties. To get a sense of overall economic health, we used the most up-to-date unemployment-rate data for each county, provided by the Bureau of Labor Statistics. Finally, with data provided by New York market research firm Onboard Informatics, we determined the number of hospitals, clinics and elder care facilities per 10,000 people in each county.
There were 100 counties included in our methodology. We ranked each data point 1 to 100, and then averaged the rankings to procure a final ranking. The three most important data points--the percentage of those aged 65 and over, the median income of those 65 and over, and the number of hospitals, clinics and elder care facilities per 10,000 people in each county--were weighted to ensure our rankings reflected ideal places for retirement.
Onboard worked with its source partners--research firms InfoUSA and Total Living Choices--to identify and define these facilities and then standardize and match the results to create a consolidated county based content set.