Consider the best places to retire for renters if you hope to save money on retirement housing costs. Retirees’ top criteria typically include access to good hospitals, proximity to family and cost of living — including taxes and the cost of buying a home.
But these days, you may want to remove that last item from your checklist. With average single-family home prices up nearly 24% since 2020 and home mortgage rates hovering above 6.5%, renting may be a better choice for many retirees who want to relocate.
Criteria for the best places to retire for renters
Kiplinger’s has long recommended renting in a potential retirement destination before buying a house, and that advice is even more compelling now. We’ve selected eight cities that offer appealing options for renters, including quality hospitals and physicians, plenty of green space, and retiree-friendly amenities, such as free classes at local colleges and universities.
Because one factor high on retirees’ list of where to relocate is proximity to family, we chose locations spread across the U.S. That means not all the cities on our list are in snow-free climates or income-tax-friendly states.
Renting vs buying
Even if you can afford to buy a home — perhaps with cash from the sale of your existing home — you may have a difficult time finding one that suits your needs. Many homeowners with fixed-rate mortgages of 3% or less are unwilling to sell, even if they’ve outgrown their homes. That has led to a shortage of homes for sale, particularly smaller houses that appeal to downsizing retirees.
The boom in housing values has also boosted rental costs. The lack of affordable housing increased demand for rental properties, which pushed up the median cost of renting by nearly 30% between January 1, 2020, and August 1, 2022, according to data from Rent, which tracks listings for apartments and rental houses. However, monthly rental rates have started to moderate. A recent report from Zumper, an online marketplace for renters and landlords, found that the median price for a one-bedroom apartment was flat, at $1,495 a month. The median price for a two-bedroom apartment rose half a percentage point, to $1,842.
A boom in real estate development in Sunbelt cities has led to an oversupply of rental properties and an increase in vacancies, says Jay Lybik, national director of multifamily analytics for CoStar Group, which provides data to the commercial real estate industry and is the parent company of Apartments.com.
“If you’re looking for an apartment in Phoenix or Austin or Tampa, there’s a fantastic amount of new supply coming online,” he says. “There are a lot more options available for potential renters than in 2021 and 2022, when the market was incredibly tight.”
The value of flexibility
Perhaps the main reason to rent, at least initially, is that it’s a lot easier to change your mind. “Even the most desirable cities are going to have less-than-desirable areas,” says Nick Lyons, a certified financial planner with the Goff Financial Group in Houston. “Rather than buying a new home and incurring all of that up-front cost, renting will give some mobility and flexibility to assess whether you like that area.”
Although you may not have lived in an apartment since you were just out of college and didn’t mind sleeping on a futon, apartment living offers many benefits for retirees. Apartment complexes are often close to community centers and within walking distance of restaurants and other attractions, says Michelle Polowy, a senior content marketing associate with Zumper. Many also offer amenities that are attractive to retirees, such as swimming pools and fitness centers. Lybik recently toured a new apartment complex in Phoenix that featured a craft room with storage space and plenty of room for residents to work on their projects. “One thing crafters need is space,” says Lybik, adding that his wife is a crafter.
If you’d prefer living in a house, the proliferation of homes available through Airbnb, VRBO and other short-term rental services provides plenty of options for retirees who want to rent. Some of these property owners may be delighted to negotiate a long-term rental arrangement, particularly with retirees who are unlikely to leave the premises in disarray when they move out.
Low maintenance
With inflation still a concern, owning a home with a fixed-rate mortgage — or better yet, one with a paid-off mortgage — offers retirees significant comfort. But the mortgage — or lack of one — is only one cost of homeownership. Homeowners must also pay homeowners insurance, property taxes and the cost of maintenance and repairs, all of which are subject to increases. Property taxes, for example, rose an average of 20% between 2016 and 2021, according to an analysis by Today’s Homeowner.
Renting could offer some tax benefits as well. Lyons recently met with a client who was considering withdrawing $300,000 from her IRA to buy a home near family in Wyoming. He cautioned that such a large withdrawal would trigger a significant tax bill, because withdrawals from tax-deferred accounts are taxed as ordinary income. The client decided to rent instead. And because her destination is a popular tourist area, there are plenty of vacation homes available for renters, Lyons adds.
Many retirees who are interested in downsizing use the proceeds from the sale of their home to purchase a retirement home. That arrangement is tax-friendly, since proceeds from the sale of a primary residence up to $250,000, or $500,000 for a married couple who file jointly, are tax-free as long as you’ve owned and lived in the home for at least two out of the past five years. (Any excess is taxed at long-term capital gains rates, which range from 0% to 23.8%, depending on your taxable income.)
But even in a seller’s market, selling your home takes time. By renting, you can keep your home on the market until you get the price you want, without having to dip into your retirement savings to buy a new home, Lyons says.
Where to rent
Just as the cost to buy a single-family home varies dramatically across the country, so does the cost of renting. RentCafe, an apartment listing service, cataloged the square footage you can get for $1,500 a month. Not surprisingly, Manhattan was at the bottom of the list: $1,500 will pay for just 243 square feet — basically a walk-in closet. That amount of money will buy you only slightly more space in Boston (320 square feet) or San Francisco (336 square feet), RentCafe found. But head to the Midwest or the South and $1,500 will get you more than three times as much space: more than 1,460 square feet in Wichita, for example, or 1,238 in Fayetteville, N.C.
Typical monthly rent for our eight cities ranges from about $1,194 a month (in Birmingham) to $2,197 a month (in Ann Arbor), according to data provided by online real estate marketplace Zillow. In general, rents are lower in the South and Midwest than on the East and West coasts.
In addition to the criteria described above, we used data from Zumper, Zillow and some of Kiplinger’s own research to identify cities that are attractive for retirees who want to rent. In some high-cost cities, such as Spokane, average monthly rents are considerably lower than the cost of a mortgage payment for a typical single-family home, according to data provided by Zillow; in others, the difference is marginal.
But even when a monthly mortgage payment is significantly lower than typical rent payments — as is the case with Birmingham — you may still want to rent initially before deciding to buy. (Zillow’s rental data includes apartments and homes. If you limit your search to apartments and condos, your monthly payments may be lower than shown for our cities.)
Give our cities a look, but keep in mind that when you’re a renter, the world is your oyster. Renting offers the opportunity to live for a year or two in a city that may otherwise be unaffordable. And if you decide winters in Pittsfield are too cold — or summers in Tallahassee are too hot — you can move.
Buying a home still makes sense if you know you’re going to stay in it for the long term — say, five years or more — says Andy Baxley, a CFP in Chicago. But retirees who aren’t sure they’ll stay in one place that long, he adds, “can benefit tremendously from the flexibility of renting.”
Tallahassee, FL
- Population: 201,731
- Cost of living: 95.6
- Typical monthly mortgage payment: $1,354
- Typical monthly rent: $1,385
- Number of hospitals within 25 miles: 3
- What retirees love: St. Marks National Wildlife Refuge
Located midway between the Georgia border and the Gulf of Mexico coastline of the state’s panhandle, Florida’s capital city attracts retirees seeking warm weather and low taxes.
Tallahassee is surrounded by lush wildlife reserves, including St. Marks National Wildlife Refuge, a sprawling ecosystem of estuaries, coastal marshes and islands located about 20 miles from the city. The St. Marks Lighthouse, the second oldest lighthouse in Florida, is one of the most-photographed landmarks on the Gulf Coast.
Cyclists can enjoy hundreds of miles of trails, including the hard-packed clay trails of Munson Hills Mountain Bike Trail System, which wind through the woods. The biking trails are part of a growing network of nature trails in Greater Tallahassee used by walkers, joggers and bikers.
Retirees interested in expanding their intellectual horizons, engaging in social activities and volunteering can take advantage of the Osher Lifelong Learning Institute at Florida State University. The program offers nearly 100 classes annually and a variety of cultural and social activities for adults age 50 and older. Faculty at Florida A&M University, one of the nation’s largest and oldest historically black universities, also teach some of the courses at the Osher Institute and offer community engagement programs of their own.
The going-out scene often revolves around the FSU football schedule, but you can escape college crowds at restaurants such as Sage, which features New American cuisine, or by sampling the extensive catalog of cocktails and spirits at Bar 1903, inside the restored Walker Library Building.
There are three hospitals within 25 miles of Tallahassee. HCA Florida Capital Hospital in Tallahassee is an acute-carehospital with 288 beds and more than 380 physicians in 20 specialties.
A two-bedroom apartment near upscale shopping in midtown Tallahassee rents for about $1,400 a month. However, the market is competitive. More than 60% of renters renewed their leases in 2022, suggesting strong competition in the rental market, according to RentCafe.
Florida has no state income tax, so income from pensions, Social Security and retirement plans is tax-free. The combined state and local sales tax is 7.5%.
Birmingham, AL
- Population: 197,575
- Cost of living: 91.9
- Typical monthly mortgage payment: $504
- Typical monthly rent: $1,194
- Number of hospitals within 25 miles: 13
- What retirees love: Pepper Place Farmers Market
Centrally located in America’s Southeast and rich with culture and history, Birmingham offers retirees a little bit of everything. On Fourth Avenue North in the city’s center is the country’s oldest black business district, a “huge part of the emergence of Birmingham” and the history of the civil rights movement, says Karla Khodanian of the Birmingham Chamber of Commerce. On the weekends, the Pepper Place Farmers Market fills with foot traffic, as local farmers and small businesses set up shop against the backdrop of the city’s Sloss furnaces, long used for manufacturing pig iron and now a historic landmark.
Festivals of all kinds are a regular occurrence in and around the city, including food festivals in the fall as well as the beloved annual Sidewalk Film Festival, which has been attracting crowds of moviegoers the last weekend of August for nearly 20 years.
The Alabama Symphony Orchestra offers free shows at a park downtown throughout the summer. Birmingham’s Museum of Art is free and open to the public six days a week. Just a few steps from the museum you’ll find the newly developed Legacy Arena, which hosts everything from basketball games to dance competitions.
Retirees seeking outdoor recreation will find plenty of choices. Red Mountain Park, Ruffner Mountain and Oak Mountain State Park are popular spots for trail runners, hikers and bikers. Just across the way, locals can also enjoy City Walk, an urban park built underneath the raised interstate.
Birmingham has some of the lowest housing costs in the U.S., so you’ll pay more to rent than you’d pay for a mortgage. Nonetheless, renting in Birmingham could be a good way to get a sense of life there before ultimately buying a home. You can rent a two-bedroom loft in downtown Birmingham for about $1,900 a month.
There are 13 hospitals within 25 miles of Birmingham, including St. Vincent’s Birmingham, a 409-bed acute-care hospital offering a state-of-the-art robotics surgery program. The hospital specializes in oncology, cardiology, orthopedics/sports medicine and neurology.
Alabama treats retirees kindly when it comes to taxes. The state income tax ranges from 2% to 5%, and there is no estate or inheritance tax. Social Security benefits, income from federal and military retirement plans, and income from defined benefit pension plans are tax-exempt.
However, the average combined state and local sales tax rate is a hefty 9.24%. If you eventually become a homeowner, Alabama has the second-lowest median property tax rate in the country.
Raleigh, NC
- Population: 469,124
- Cost of living: 96.1
- Typical monthly mortgage payment: $2,132
- Typical monthly rent: $1,656
- Number of hospitals within 25 miles: 11
- What retirees love: Film screenings at the Gregg Museum of Art & Design
Raleigh, the capital of North Carolina, is filled with arts, culture, entertainment, restaurants, museums and festivals. A bonus is the proximity to Durham and Chapel Hill and the benefits of having three major universities — North Carolina State in Raleigh, Duke University in Durham and the University of North Carolina at Chapel Hill — all within 30 miles of one another.
This area, known as the Triangle region, includes the three distinct cities, each with their own character and identity, but with benefits that are easily accessible wherever you live.
Known as the “City of Oaks,” Raleigh’s moderate temperatures make it easy to enjoy outdoor activities all year long. More than 100 miles of paved trails connect neighborhoods and attractions, such as the 6-mile Art to Heart trail. A special feature is the Ann and Jim Goodnight Museum Park, a paved trail lined with more than a dozen works of art.
The North Carolina Museum of Natural Sciences, the Southeast’s largest natural history museum, features interactive exhibits the grandkids will love. The Gregg Museum of Art & Design, on the campus of N.C. State, hosts regular lectures, film screenings, workshops and yoga.
The thriving restaurant scene offers much more than iconic North Carolina barbecue (which features pork and vinegar and is delicious). Zagat named Raleigh one of the hottest food cities, and local chefs are achieving national fame, including Ashley Christensen, who runs six restaurants in Raleigh and received the outstanding chef award from the James Beard Foundation.
Excellent health care is a major draw for the area, with Duke University Hospital consistently ranked as one of the top hospitals in the country. The UNC Hospitals are also highly ranked.
Raleigh is home to 10 colleges, including N.C. State, which helps keep the rental market active. You can rent a one- bedroom apartment in a new building in the trendy Glenwood South neighborhood in downtown Raleigh for $1,730.
North Carolina’s income tax rate dropped from a flat tax of 4.99% in 2022 to 4.75% in 2023 and will continue to decrease each year until it hits 3.99% in 2027. Social Security benefits are not taxed, and income from federal government retirement plans or designated North Carolina state and local government plans is exempt if the retiree had five or more years of creditable service as of August 12, 1989.
Pittsfield, MA
- Population: 43,641
- Cost of living: 101.5
- Typical monthly mortgage payment: $1,338
- Typical monthly rent: $1,433
- Number of hospitals within 25 miles: 2
- What retirees love: Summer concerts at Tanglewood
Residents of Pittsfield, which is nestled in the Berkshire Hills of western Massachusetts, have ready access to some of the best music and theater in the country. And Pittsfield offers a lower cost of living than pricey neighboring towns.
Tanglewood, the summer home of the Boston Symphony Orchestra since the 1930s, is only a 15-minute drive from Pittsfield. The 500-acre campus is known primarily for the open-air Koussevitzky Music Shed and its summer concert series, featuring more than 75 performances each year.
Pittsfield’s downtown cultural district features the historic Colonial Theatre, which hosts opera, plays and musicals. It was built in 1903 and reopened in 2006 after a $21 million restoration. Down the street is the recently renovated Berkshire Museum, whose exhibits combine art, science and history, and the Barrington Stage Company.
Pittsfield is also home to historic sites, including Arrowhead, the farm and home that Herman Melville bought in 1850, which is now run by the Berkshire County Historical Society.
Outdoors enthusiasts will enjoy the Pittsfield State Forest for hiking, snowshoeing and cross-country skiing. You can fish, swim and canoe on 617-acre Onota Lake. Bousquet Mountain, also located in Pittsfield, has winter activities and hiking in the summer. Just one mile from the center of Pittsfield is the Canoe Meadows Wildlife Sanctuary, which is run by the Massachusetts Audubon Society and includes walking trails, birding and a community garden.
The typical rental cost is only slightly more than the typical monthly mortgage. A two-bedroom, newly renovated apartment in downtown Pittsfield costs about $2,250 a month.
There are two hospitals located within 25 miles of Pittsfield. The Berkshire Medical Center in Pittsfield is a 298-bed teaching hospital that’s affiliated with the University of Massachusetts Chan Medical School and the University of New England College of Osteopathic Medicine.
Massachusetts has a flat income tax rate of 5% of federal adjusted gross income. Starting in 2023, the state imposes an additional 4% tax on income over $1 million. Estates valued at more than $1 million may be subject to a Massachusetts estate tax at rates ranging from 0.8% to 16%.
Columbus, OH
- Population: 905,748
- Cost of living: 86.4
- Typical monthly mortgage payment: $1,196
- Typical monthly rent: $1,423
- Number of hospitals within 25 miles: 9
- What retirees love: Franklin Conservatory and Botanical Gardens
Columbus is the home of Ohio State University, but Ohio’s capital city has a lot to offer retirees, even if they’re not fans of Buckeye football or basketball. The university provides plenty of music and theater, and Ohio State’s lifelong learning program, Project 60, offers tuition-free, non-degree programs for seniors age 60 and older.
Throughout the year, the city features numerous festivals, including the Holiday Blooms festival in the winter and the Fiery Foods Festival in the summer.
The Clear Creek Metro-park has 5,300 acres for hiking, and bikers can get their workout on the Heron Pond Trail. The Franklin Park Conservatory and Botanical Gardens, about two miles from downtown Columbus, is a sprawling 88-acre area featuring more than 400 species of plants. The conservatory hosts exhibitions throughout the year and offers classes and workshops in cooking, gardening, fine arts and wellness.
Although prices for homes in Columbus are lower than in many other parts of the U.S., the city is in the midst of a seller’s market, with limited inventory of homes, says Donald Payne, a local real estate agent. You can rent a three-bedroom apartment with access to a swimming pool for about $1,380. Here, too, though, there is strong demand, Payne says, so if you find an apartment you like, move quickly to nail down a lease. Seniors who prefer urban living may consider renting in downtown Columbus, a walkable neighborhood that features a variety of restaurants, shops and entertainment venues.
Thanks to the university, health care in Columbus is top-notch. The Ohio State University Wexner Medical Center is ranked as one of the best hospitals in the U.S., with nine health care specialties.
Ohio’s income tax ranges from 2.765% on income from $26,051 to $46,100, to 3.99% on income over $115,300. Tax breaks for seniors include a retirement income tax credit ranging from $25 to $200, depending on the amount of qualifying income you receive from a pension or retirement plan.
In addition, taxpayers who are age 65 and older can claim a senior citizen credit of up to $50 per tax return. Ohio doesn’t tax Social Security benefits.
Ann Arbor, MI
- Population: 123,851
- Cost of living: 110.7
- Typical monthly mortgage payment: $2,356
- Typical monthly rent: $2,197
- Number of hospitals within 25 miles: 6
- What retirees love: Ann Arbor Art Fair
Retirees who don’t mind cold winters — and an above-average cost of living — can find plenty to do in Ann Arbor, from classes and day trips offered through the University of Michigan’s Osher Lifelong Learning Institute to the city’s summer jazz series. The Ann Arbor Art Fair, held every July, is the largest juried art fair in the U.S., with more than 1,000 artists. In the fall, football fans can join more than 107,000 students and alumni to cheer on the Big 10 university’s Wolverines.
For the young at heart, Ann Arbor has a lively nightlife. You can enjoy microbrews at Wolverine State Brewing Co. or hear some music at the Blind Pig, where Jimi Hendrix and other rock legends have performed. Every Friday from 6:30 to 9 p.m., Live, an off-campus nightclub, sponsors a happy hour for music aficionados older than 50. This event, affectionately labeled by locals as “Geezer Happy Hour,” has been going on at various venues for more than 50 years.
Outdoor activities range from ice skating at Buhr Outdoor Ice Arena to golfing at the Georgetown Golf Club to canoeing down the Huron River Water Trail. For a break from small-town life, you can venture to Detroit, about 45 miles away, or Chicago, about 230 miles from Ann Arbor. For longer trips, Detroit Metropolitan Airport is only 20 miles away.
For $1,889, you can rent a two-bedroom apartment that’s just minutes from the University of Michigan Medical Center. Other rental living arrangements in Ann Arbor include senior living facilities and condos, says Stephen Hollowell, a real estate agent with Keller Williams in Ann Arbor.
Thanks to the university, Ann Arbor offers world-class health care. The University of Michigan’s Medical Center is an acute-care hospital with more than 1,100 beds that offers a variety of specialties. Trinity Health Ann Arbor Hospital is an expansive, 538-bed teaching facility that has been treating patients for over a century.
Michigan taxes income at a flat rate of 4.25%, but retirees are eligible for a generous standard deduction that will offset taxes on some of their retirement income. If you were born before 1946, up to $56,961 of income from private retirement plans is exempt (up to $113,922 for joint filers). Those taxpayers can also deduct up to $12,697 of interest, dividends, and capital gains ($25,394 for joint filers). Taxpayers born after 1946 are eligible for a standard deduction of up to $20,000 ($40,000 for joint filers). Military pensions and Social Security payments aren’t taxed.
Spokane, WA
- Population: 230,160
- Cost of living: 103.1
- Typical monthly mortgage payment: $1,907
- Typical monthly rent: $1,450
- Number of hospitals within 25 miles: 9
- What retirees love: The 40-mile Centennial Trail
Retirees embrace Spokane for its relatively affordable cost of living compared with other major cities in the Pacific Northwest, top-notch health care and overall quality of life.
Retirees can enjoy, fishing, boating, golfing and hiking in the alpine landscapes surrounding Spokane in the warmer months and downhill skiing, snowboarding, cross-country skiing and snowshoeing in the winter. Situated near the Spokane River, in eastern Washington, the city itself also features numerous parks, trails and other outdoor recreation opportunities. Riverside State Park, just 9 miles from downtown Spokane, features the 40-mile paved Centennial Trail, which ends in Coeur d’Alene, Idaho.
Spokane is home to a vibrant arts and culinary scene. Many murals can be found on building walls, painted by local artists throughout the city. The city’s three-day ArtFest, held every June, features sculpture, photography, ceramics, jewelry and more, with all sales going directly to the artists. Spokane has a wide range of restaurants and eateries catering to different tastes and preferences. Clover and The Wandering Table, for example, have received acclaim for their innovative cuisine.
With typical rent at $1,450, retirees can enjoy a comfortable lifestyle for much less than the cost of a monthly mortgage. The rental options are also eclectic in downtown Spokane and Spokane Valley, including apartments, townhouses, single family homes and senior living facilities. A two-bedroom apartment in a downtown apartment complex with a rooftop lounge deck rents for about $2,300.
Retirees have nine hospitals to choose from within a 25-mile radius, including such well-regarded facilities as Providence Sacred Heart Medical Center. The hospital has more than 800 primary care doctors and specialists who focus on areas including cancer treatment and heart and vascular health.
Washington doesn’t have an income tax, so you won’t pay state taxes on withdrawals from your retirement plans, pension payments or Social Security benefits. However, Spokane has a combined state and local sales tax of 9%, and tax on gasoline, at $0.49 per gallon, is one of the highest levies in the U.S. Washington also taxes estates valued at $2.193 million and up at rates ranging from 10% to 20%.
San Antonio, TX
- Population: 1.45 million
- Cost of living: 92.1
- Typical monthly mortgage payment: $1,333
- Typical monthly rent: $1,463
- Number of hospitals within 25 miles: 17
- What retirees love: Performances at the 94-year-old Majestic Theater
San Antonio has everything you’d want in a city, just without the crowds or high price tag. With a population of just over 1.4 million, San Antonio has all of the big-city amenities — including tons of restaurants, shopping, arts and entertainment — but its geography, history and intentional use of outdoor space make it feel smaller.
San Antonio’s climate is perfect for year-round outdoor activities. You’ll find walking, hiking, biking and even paddling trails throughout the city.
Renters have plenty of options in and outside the city. A one-bedroom apartment near the recently renovated Pearl Brewery rents for $1,545 per month. In the Stone Oak and Medical District north of San Antonio, you can find two- bedroom apartments for around $1,500 a month.
The 15-mile River Walk, created in the 1940s, continues to expand and provide access to more areas of the city, extending north to the 343-acre Brackenridge Park and south to San Antonio’s five Spanish Colonial missions, including the Alamo.
San Antonio’s entertainment options include the Majestic Theater, built in 1929; the Tobin Center for the Performing Arts for ballet, musicals and concerts; and many other smaller venues throughout the area.
San Antonio is known for its food, which combines its European and Mexican heritage, and was one of only two cities in the U.S.—and only 36 in the world—to be named a UNESCO Creative City of Gastronomy, an international culinary destination.
San Antonio also has big-city amusements, including Six Flags Fiesta Texas and Sea World. You can cheer on the San Antonio Spurs NBA basketball team, the San Antonio Missions baseball team, which is the AA affiliate of the San Diego Padres, and the San Antonio FC professional soccer team.
Known as “Military City USA,” San Antonio is home to one of the largest concentrations of military bases in the U.S. The bases provide a center of activity for servicemembers and military retirees, who can shop tax-free at the Exchange and Commissary. Several retirement communities cater primarily to military retirees.
San Antonio has world-class health care, for both military and civilians. It is the home of the U.S. Army Medical Command and Brooke Army Medical Center, the Army’s flagship medical institution, a Level 1 trauma center. The city’s other Level 1 trauma center, the University of Texas Health Science Center at San Antonio, includes a 716-bed hospital and is the primary teaching facility for UT Health San Antonio.
Texas has no income tax, so retirement income is tax-free. It also has no estate or inheritance taxes.
Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
