Why Retiring In A Small Town Might Be Your Best Financial Bet

You may not have been “born in a small town,” as the John Mellencamp song goes, but living in one might be perfect for your retirement. Thanks to small-town perks like lower costs of living, affordable housing opportunities, low crime rates, and access to recreational and local activities, these towns across America may help you save money in retirement.

Lower Cost of Living, on Average

When you retire, if you are living on a fixed income, you have to consider your living expenses carefully, and small towns may be less expensive, from housing to taxes to entertainment. 

Take the small town of Henderson, Kentucky, one of the friendliest places to live, according to Southern Living magazine. If you live in Henderson County, where the town of Henderson is located, your monthly cost of living, including nearly all your expenses—health care, housing, groceries, taxes, utilities, and other necessities—is $3,172 per month on average. Similar expenses in Nashville, Tenn. will cost you $4,247 per month on average. 

If you want to buy a home when you retire, many small towns, especially in rural areas, will likely cost you less. For example, if you like New England, the median price of a home listed for sale in Boston is $949,000. If you purchased a home in the charming town of Rutland, Vermont, the median listing price is only $420,000. If you plan to rent, consider that you pay less in a small town, too, although the rental stock may be smaller. 

In addition, if you sell your home (provided it has equity) in a higher-cost area, you may make enough to buy a home outright or with a smaller mortgage in a small town. 

Small towns in rural areas provide shopping opportunities at small farms and from local growers. You could even start a vegetable garden or fruit orchard—all of which could save you money. However, your grocery bill may be higher in a rural area than a suburban one, due in part to fewer places to shop and increased transportation costs.  

Transportation and Accessibility

Transportation can cost more if you depend on a car, but many small towns have walkable main streets with grocery stores, pharmacies, and other shops, making them more accessible (and safer) than urban packed streets and heavy traffic. Check out small towns with railway access, like the ones dotted along the river in the Hudson Valley of New York or built alongside the T-line in Boston. Many trains offer discount tickets for older adults so they can afford to visit for leisure or health care reasons. 

Social and Cultural Aspects

Small towns can offer a plethora of public events, social clubs, cultural entertainment, and access to recreation. Retirees can join boards and attend programming at local schools and libraries, participate in the local senior center, and join local committees. 

Many vibrant (and slightly larger) small towns are home to colleges and universities that provide a wealth of opportunities, from free lectures to cultural events for retirees. It may be easier to join recreational classes or clubs without getting on a waiting list. 

Health Care and Essential Services

When looking at small towns, always evaluate their access to health care and other services, including ambulatory care (many small towns only have a volunteer EMS team, for example). Doctors and health care workers may also have a more personal relationship with their patients in a smaller town. If you need extensive services, note how far away (and how accessible) the nearest large medical center is from your town. 

You will need to consider the cost of health care overall because Medicare usually only covers doctor visits, hospital stays, and bloodwork and labs. In a small town, your options for other care may be limited to a few offices, which may or may not be affordable. Your primary care physician should be able to coordinate care easily for you, including with specialists in the area. Ask the local doctor’s office about community health and recreational programs for older adults. 

Lifestyle and Quality of Life

Living surrounded by natural beauty can benefit everyone. In fact, according to research, spending 120 minutes a week in nature may improve your mental and physical health. Small towns can offer access to outdoor spaces, fresh air, and recreation; even simply gardening or bird watching can be beneficial to your quality of life. Many small towns offer a slower pace, often less crime, and opportunities to de-stress. 

Financial Implications of Moving for Retirement

It costs, on average, $4,890 to move 1,000 miles or more depending on your location and a few other factors, but it can be positive for your bottom line. If you save more on the cost of living after a move, you keep more savings for travel, leisure, and family. If your everyday expenses and cost of living go down, your retirement dollars will stretch further and last longer. 

Another advantage of a small town is that finding part-time work in local shops or schools may be easier, as the applicant pool is smaller and the community is closely knit. 

Potential Drawbacks

Retiring to a small town has its drawbacks. Limited access to some health care services or insufficient access to regular specialist visits may make it impossible. You may need more opportunities for arts and cultural events. If you don’t join groups or become actively involved in your community, you may risk feeling isolated in a small town versus a large city because just walking outdoors puts you in proximity to people. 

The Bottom Line

The cost of living varies widely across the United States, so you may have to do some due diligence to find the perfect small town that fits your budget and lifestyle. The money you save moving to a small town may allow you to spend your retirement on what’s important to you. 

Retiring to a small town can improve your mental and physical health. It can provide a sense of community, fresh air, and access to nature, plus a lower cost of living, where you can stretch your retirement savings. Identify health care services and medical facilities, and if the town doesn’t have them, please make sure you have easy access to ones nearby before committing to move.