Finance

Where Should I Retire?: I’ll retire with a military pension and want to move to a bicycle-friendly, beer-loving place — so where should I go?

Dear MarketWatch,

I have five years until I retire. I have a nest egg of $ 1 million and will also have a monthly military pension of approximately $ 6,000, and Social Security on top of that.

I like cycling 60 miles a day and want to retire in a place that is known for good, safe cycling. I hate hot humid weather and don’t want a lot of snow. I love craft beer. And I would prefer a place with limited or no income tax on a military pension.

Where should I retire? Fort Collins, Colorado, and Asheville, N.C., seem like good places, but the cost of living in Fort Collins seems above average, and I am told Asheville has a lack of housing.

What other places should I consider and how do they compare with the two locations already mentioned? My wife likes the sound of “the Hill County in Texas,” but she knows the heat is bad.

Charles

Dear Charles,

The Fort Collins and Asheville areas sound lovely. And popular places tend to be more expensive — that’s just the reality of supply and demand. If that’s where you want to be, the trade-off might be as simple as a smaller house/condo/rental.

You also could seek cheaper housing a bit further from these two cities — Greeley, Colo. (don’t believe everything about the smell), or Hendersonville, N.C. (recommended here), for example. Or what about Raleigh-Durham, with the American Tobacco Trail as the trail network’s spine? You’d have to accept more humidity with that one, however.

I started my search by looking at the League of American Bicyclists’ bicycle-friendly communities. Five, including Fort Collins, are platinum. Housing in only one is cheaper than Fort Collins, but I don’t think you’ll appreciate the snow in Madison, Wis. I ruled out Davis, Calif., because the state is one of seven that taxes military retirement pay in full. (It doesn’t tax Social Security checks, though.)

So I looked further down the list while taking weather and taxes into consideration. You can estimate your state taxes using this calculator, but you may want to verify that with a tax professional.

I’ve described three suggestions for you below. Boise (a silver-level BFC) and Corvallis, Ore. (a gold BFC), recommended here and here, may be other places to consider.

As always, taxes, housing costs, the number of craft brewers and even bike-friendliness can change over the next five years. And some of these places may not mesh with whatever your wife’s wish list includes.

Another piece of advice: Be sure to experience a place in all weather, or at least the worst season, to make sure it’s a fit. Data can only tell you so much. Consider renting, at least at first. Your pension and Social Security may cover your regular expenses, but don’t make yourself house-poor.

Equally, state income taxes aren’t always everything. Virginia, which does tax retirement pay, is rated the best state for military retirees according to this survey and scores second-highest for the “economic environment,” behind Alabama.

Why not check out your shortlist on a bike tour?

A kayaker and a paddleboarder in Mead’s Quarry, part of the Ijams Nature Center in the South Knoxville section of Knoxville, Tenn.

Justin Fe/Visit Knoxville

Instead of Asheville…Knoxville, Tenn.

Asheville is one of America’s premier craft beer destinations, but Knoxville has an above-average number of breweries too. By moving here, you’d get a city twice the size (nearly 190,000 people) and the state’s flagship university (33,000 students and the potential for practically free classes starting at age 65). You’d be in a valley with the Smoky Mountains visible to the east; Asheville’s elevation is more than 1,000 feet higher. Average July highs would be a couple of degrees warmer than in Asheville, and January highs would be a couple of degrees cooler, but a little less snow.

Knoxville is a bronze-level bike-friendly community, as is Asheville. Check out bike rides that tour the breweries. You can also join BikeWalk Knoxville on one of its rides to explore the city.

Tennessee has been reducing its state income tax and will abolish it at the end of 2020. North Carolina will give you a more modest break on your pension and tax your Social Security check.

Housing is much cheaper in Knoxville than in Asheville, whether buying or renting. Here’s what’s for sale in Knoxville now, using listings from Realtor.com (which, like MarketWatch, is owned by News Corp.

And here’s Asheville.

You can flip to the rental market for both.

A sunrise near Wenatchee, Wash.

Courtesy Wenatchee Valley Chamber of Commerce

Instead of Fort Collins…Wenatchee Valley, Washington

The Wenatchee Valley is a bronze-level bicycle-friendly area of 67,000 people in central Washington, so far from Fort Collins’ platinum status and even smaller than Asheville. The city of Wenatchee has nearly 35,000 residents, and the narrow, 50-mile-long Lake Chelan is an hour away. This is an agricultural area — fruit is a big crop, and there’s wine, too — so you should have plenty of rural roads to pedal on. Yes, you’ll also find craft brewers

Washington state doesn’t have an income tax, so Wenatchee checks that box. Colorado offers some tax breaks on both military pensions and Social Security.

The Wenatchee area is more affordable and less busy than Fort Collins, which you should think of as a cheaper(!) version of Boulder. Fort Collins has 170,000 people, plus there are almost another 80,00 in neighboring Loveland and 110,000 in Greeley. The plus side is that it gives you a broad range of neighborhoods and prices.

Average summer highs in Wenatchee are in the mid-80s; average highs in the winter are just above freezing. Fort Collins is a touch cooler in the summer and warmer in the winter. You’d get little rain, unlike cities on the other side of the Cascade Mountains, but expect 7 to 9 inches of snow on average in December and January. Despite its higher average temperatures, the snow starts earlier in Fort Collins, lasts longer and you get more of it.

You will find plenty of retirees around Wenatchee. Nearly 20% of Chelan County’s 77,000 residents are 65 or older, according to the Census Bureau. Fort Collins comes with Colorado State University.

If Wenatchee looks too pricey, check out Spokane, another bronze-level BFC. It’s far bigger, with about 225,000 people (and 525,000 in the county), and has more craft brewers. The drawback is more snow. If you want to go smaller, Ellensburg, about 90 minutes south of Wenatchee, is a silver-level BFC and a touch cheaper than Wenatchee.

Here’s what’s on the market in Chelan County.

This is what the housing market looks like in Fort Collins, Loveland and Greeley.

Indiana University’s Little 500 bike race.

Visit Bloomington

Wild card: Bloomington, Indiana

If you like older biking movies, you know this town of 85,000 people from “Breaking Away” and the Little 500 bike race. But did you know the home of Indiana University is a gold-level bike-friendly community?

And we’re not talking about just biking past miles and miles of corn fields on those 60-mile rides. (That would be retiring near rival Purdue University in West Lafayette, a bronze-level community.) Southern Indiana is hilly — test yourself on the brutal Hilly Hundred weekend ride outside of town during peak foliage. Others might prefer the all-terrain Gravel Grovel through the Hoosier National Forest. To chill, take the 9.2-mile trail that runs from the north end of town to the limestone quarry on the south side.

For beer, check out Upland Brewing, which won a gold medal at the Great American Beer Festival in 2019. Six more gold-medal winners are in Indianapolis an hour to the north.

Indiana is changing how it taxes military retirement pay; your pension should be exempt as of 2021. The state also doesn’t tax Social Security income.

Temperatures in Bloomington reach an average of 86 in July, while January means an average high of 37 and about 5 inches of snow. If you want to hang out on campus, seniors get 50% off tuition, and the break starts at age 60.

Here are homes on the market now:

Readers, where should Charles and his wife retire? Leave your suggestions in the comments section.

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