Lifestyle
When people think of retiring to a warm Southern climate, Florida is often the first state that comes to mind. But neighboring Alabama has plenty to offer, as well, including charming small towns and beach communities. The best places to retire in Alabama are both affordable and packed with amenities, with a cost of living that doesn’t break the bank.
Stephanie Faris
Published February 17th, 2022
Updated December 8th, 2022
Stephanie Faris
•
Published February 17th, 2022
•
Updated December 8th, 2022
Table of Contents
Key Takeaways
In recent years, more retirees are choosing an Alabama retirement for a variety of reasons.
Social Security income and pensions aren’t taxed in Alabama, and many areas have a low cost of living.
In choosing a city for your Alabama retirement, it’s important to compare the 65+ population, the cost of living, and access to all the amenities you’ll need.
When people think of retiring to a warm Southern climate, Florida is often the first state that comes to mind. But neighboring Alabama has plenty to offer, as well, including charming small towns and beach communities. The best places to retire in Alabama are both affordable and packed with amenities, with a cost of living that doesn’t break the bank.
Is Alabama tax-friendly for retirees? Absolutely. The state doesn’t tax Social Security income or pensions, letting older adults keep more of their earnings. Here are some of the top towns to consider if Alabama is on your retirement wish list.
Auburn
CITY POPULATION: 66,259
SHARE OF POPULATION 65+: 8.1%
COST OF LIVING FOR RETIREES: 8% below the national average
PER CAPITA INCOME FOR POPULATION: $28,510
TAX RATING FOR RETIREES: Tax Friendly
Those looking for retirement communities in Alabama should consider Auburn, perhaps best known as home to the University of Alabama. But the best thing about Auburn is that as you’re looking for where to live in Alabama, you’ll find some great active adult communities, as well as access to golf courses and arts and culture.
Hamilton
CITY POPULATION: 6,606
SHARE OF POPULATION 65+: 21.0%
COST OF LIVING FOR RETIREES: 23% below the national average
PER CAPITA INCOME FOR POPULATION: $20,601
TAX RATING FOR RETIREES: Tax Friendly
You can further the benefits that low Alabama retirement taxes give retirees by choosing Hamilton, which has some of the lowest property taxes in the state. You’ll find plenty of small-town charm here, along with a robust 65+ population.
Fairhope
CITY POPULATION: 22,677
SHARE OF POPULATION 65+: 23.4%
COST OF LIVING FOR RETIREES: 6% above the national average
PER CAPITA INCOME FOR POPULATION: $41,613
TAX RATING FOR RETIREES: Tax Friendly
Fairhope is one of the best places to retire near water in Alabama because of its breathtaking views of Mobile Bay. If you’re looking for where is the best place to retire in Alabama, though, this town hits the mark for a large number of reasons, thanks to plenty of events and attractions.
Dothan
CITY POPULATION: 68,941
SHARE OF POPULATION 65+: 17.8%
COST OF LIVING FOR RETIREES: 13% below the national average
PER CAPITA INCOME FOR POPULATION: $28,980
TAX RATING FOR RETIREES: Tax Friendly
For those debating retiring in Alabama vs. Florida, the border town of Dothan offers the best of both worlds. You’ll be just a half an hour or so from the Florida line in this town, which is also home to the National Peanut Festival.
Huntsville
CITY POPULATION: 200,574
SHARE OF POPULATION 65+: 16.1%
COST OF LIVING FOR RETIREES: 5% below the national average
PER CAPITA INCOME FOR POPULATION: $35,634
TAX RATING FOR RETIREES: Tax Friendly
Although Huntsville is known for NASA’s Marshall Space Flight Center, there are plenty of other reasons is Huntsville AL a good place to retire. The space center attracts plenty of tourism, which means you’ll have your fair share of restaurants and shops nearby.
Lincoln
CITY POPULATION: 6,781
SHARE OF POPULATION 65+: 14.5%
COST OF LIVING FOR RETIREES: 7.4% below the national average
PER CAPITA INCOME FOR POPULATION: $29,784
TAX RATING FOR RETIREES: Tax Friendly
When many ask is Alabama a good place to retire, they automatically think of areas like Lincoln, home to the Talladega Superspeedway. But Lincoln is also one of the best budget retirement locations in the state, with a lower than average cost of living.
Montgomery
CITY POPULATION: 198,525
SHARE OF POPULATION 65+: 14.3%
COST OF LIVING FOR RETIREES: 8% below the national average
PER CAPITA INCOME FOR POPULATION: $28,191
TAX RATING FOR RETIREES: Tax Friendly
For military servicemembers and veterans, Montgomery is often listed in the 10 best places to retire for military for a reason. There’s a large number of VA medical care facilities in the city, including the Central Alabama Veterans Health Care System.
Birmingham
CITY POPULATION: 209,403
SHARE OF POPULATION 65+: 14.9%
COST OF LIVING FOR RETIREES: 9% below the national average
PER CAPITA INCOME FOR POPULATION: $24,480
TAX RATING FOR RETIREES: Tax Friendly
Another city with a low cost of living is Birmingham, which is often listed among the best Southern states to retire. You’ll get all the benefits of living in a highly populated town, including dining, shopping, and healthcare options.
Gulf Shores
CITY POPULATION: 12,757
SHARE OF POPULATION 65+: 23.7%
COST OF LIVING FOR RETIREES: 5% above the national average
PER CAPITA INCOME FOR POPULATION: $37,108
TAX RATING FOR RETIREES: Tax Friendly
If you don’t mind tourist traffic, Gulf Shores is one of the best beach towns to live in Alabama. There’s a thriving 65+ population, which will give you access to activities and social opportunities.
Foley
CITY POPULATION: 20,391
SHARE OF POPULATION 65+: 26.1%
COST OF LIVING FOR RETIREES: 6% below the national average
PER CAPITA INCOME FOR POPULATION: $27,078
TAX RATING FOR RETIREES: Tax Friendly
Located near Fairhope, one of the best towns to retire in, Foley has a heavy retiree population and a charming downtown historic district. It also has one of the largest outlet malls in Alabama, the Tanger Outlet Center.
Bottom Line
Those looking for a warm climate and access to historical landmarks will find Alabama good place to live in retirement. But one of the best things about Alabama is its affordability. Working with a certified financial planner through Retirable, you can come up with a customized plan that will ensure your retirement years in Alabama are comfortable and fun.
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Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Money Under 30, The Motley Fool, MoneyGeek, E-commerce Insiders, and GoBankingRates.
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Northeastern U.S. Best Places To Retire
Southern U.S. Best Places To Retire
Midwestern U.S. Best Places To Retire
Western U.S. Best Cities To Retire
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Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Money Under 30, The Motley Fool, MoneyGeek, E-commerce Insiders, and GoBankingRates.
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