The best places to retire in America are based on these 4 key factors

After living in New York City and Washington, D.C., the retired couple wanted to settle in a place that would offer them similar opportunities to walk to restaurants, engage in cultural experiences, and feel like a part of a community.

“When we hit Delray, it was alive,” Linda, 78, a former owner of a recruitment firm who now paints in her free time, tells Fortune. Jerry, 80, a retired lawyer, audits courses for free at nearby Florida Atlantic University. “It had a mix of young people with kids, college students, young couples.”

In awe of the local mom-and-pop stores and thriving restaurant scene, they described Delray, No. 12 on our inaugural list of Best Places to Retire Affordably, as “magical.” During the pandemic, the couple decided to make it their full-time home. 

“We don’t regret it. We have a great lifestyle,” Linda says. “It’s like being on vacation every day.”

Modern retirement looks very different than it did a generation ago. While it once consisted generally of downsizing and keeping expenses low while enjoying occasional trips and leisure activities—at least for the middle-class—today, because of increasing lifespan, people want more than affordability. They want to stay active and involved.

Not surprising, as a 2023 study found that adults who are most satisfied post-retirement are in communities where they are engaged and have a sense of purpose. It’s why so many retirees see it as essential to their quality of life. The National Institute of Aging says that staying socially active and purposefully engaged in community improves mental and physical health outcomes by reducing social isolation. Further, the strength of someone’s social connections directly impacts their happiness at the end of life, according to the longest study on happiness to date. 

“Where people live is really important for their experience of aging,” says John Beard, a professor of productive aging at Columbia University’s Robert N. Butler Columbia Aging Center. “It’s never too late to make decisions about where you want to live, but it’s also never too early.”

To rank the 25 Best Places to Retire Affordably, we assessed over 2,000 cities and nearly 200 data categories across health care, wellness, livability, and financial health. The winners are relatively affordable, provide robust health care services for older adults, and offer community and walkability. Finally, Fortune considered the percentage of residents who believe their city or town is the perfect place for them.

The essential considerations 

Retirees are not a monolith, cautions Beard, and what makes a perfect place to call home is deeply personal.

So as you’re thinking about where to retire, consider a number of factors. Does it make sense to settle near your children and grandchildren or near an airport for easy access to visit them? Do you prefer a small town close to a bustling city with a thriving social scene, or is a warm, beachfront locale your ideal? While our list does not encapsulate everything desirable in each place, it does include a mix of places that have a high number of sunny days per year as well as robust access to nature and green spaces. Because whether you desire the mountain views of Lafayette, Colorado or the Atlantic Ocean’s breeze off the coast of Newport, a place that encourages you to stay outside and engaged is essential. 

For many, retirement is not the end of work, but an opportunity to find and pursue a different type of job, which has financial benefits as well as physical and cognitive ones, too.

“We often think about retirement like it’s black and white,” Beard says, while many would be happy to keep working in different ways. “But they don’t want to have the same level of commitment that they had when they were younger.” Our list includes places near major hubs, and also factors in the unemployment rate to determine a place’s financial health. 

For a city to successfully serve retirees, he adds, it must cater to a diversity of needs and not just to the “generic middle-of-the-box.” To this end, our list heavily considers Sharecare’s Community Well-Being Index, which accounts for multiple livability measures and social determinants of health, such as access to green spaces, libraries, and healthy food. 

Fortune also considered the percentage of residents who believe their city or town is the perfect place for them.“If you believe something to be true, like this is a perfect place for me, it actually has direct links to your physical health, your attitude, and your overall self-rated health score,” Michael Rickles, the vice president of research at digital health company Sharecare, tells Fortune. 

The financial question

Cost considerations are of course a critical factor in deciding when and where to retire. More than half of adults over age 50 worry they will not have enough money for that stage of life, according to AARP. It’s why financial considerations were factored into the list, using statistics like the percent of residents who agree with the statement, “I have enough money to do everything I want to do,” as well as the percent of residents who have high financial stress risk, average property taxes, and average estimated home value.

Many of the places in our ranking offer their own financial perks. The historical coastal city of Beaufort, South Carolina, for example, which ranks at No.4, has a cost of living that is 3% lower than the national average, and housing prices are 15% lower than the national average.

Retirees in Colorado Springs, No. 19, meanwhile, can exclude their Social Security benefits from their taxable income.

And there is no state income tax in New Hampshire, Maine, or Washington, which helped boost the cities of Portsmouth, Scarborough, and Maple Valley on our list.

The ease of health care access

In our analysis of the Best Places to Retire Affordably, we heavily considered whether a city or town offered access to mental and physical health care resources. Older adults are at an increased risk for a host of chronic conditions, including depression and heart disease, so staying on top of screenings and regular checkups is a crucial part of thriving post-retirement and extending healthspan, which refers to the number of years lived in good health. 

“There tends to be a pretty strong correlation between longevity and access,” says Rickles. “When we say that you have access, we’re defining it in terms of, you can walk there [or] it’s like a five-minute drive. It makes it more meaningful and relevant.” 

Additionally, as more older adults want to age in place and with autonomy, we gave higher ranking to places with strong home health services and plentiful independent living centers.

Beyond accounting for places with access to the brick-and-mortar health care system, our ranking factors in access to resources that will bolster older adults’ social health. Staying engaged and connected reduces older adults’ risk for cognitive decline and social isolation, which is linked to a number of conditions, including dementia, heart disease, and stroke. It’s why communities with high walkability, a lower risk of social isolation, and filled with people who have a sense of belonging and pride in their community rose to the top of our list. 

“As we’re moving toward retirement, that typically corresponds with an increase in sedentary lifestyles, so making sure that you have parks, walking groups, community spaces where you can move and become engaged with others, and facilities that continue to engage you as you transition into a new phase of life, is what we found to be the most important,” Rickles says. 

A place where you are an active participant 

Beard, who founded the World Health Organization’s Age-Friendly Cities, a global network of 1,600 communities, says the best places to age are not only offering resources for older people but also being mindful of how a place can create meaningful networks across generations. 

“It’s a community where people of all ages, including older people, are just naturally engaged participants,” he says. Places that have built-in intergenerational activities, events, and spaces, help combat ageism and reimagine what it can look like to grow old. “Older people want to learn, grow and make decisions. Most people value being part of something bigger.”

Finding a strong sense of community, having access to a variety of things to do, and being able to stay socially engaged with people of all different backgrounds are just some of the key components of what makes a best place to retire. 

And Delray Beach is where the Salzmans have found that.

“We made very dear friends,” says Linda, naming perhaps the most priceless perk. “At this age, it’s not easy to make friends.”

Read our Best Places to Live for Families here.