Orlando is the No. 1 U.S. city to retire to in 2021: Here's the rest of the top 5

"For cost-conscious retirees, Central Florida offers comparatively affordable housing and low taxes."


Americans ages 65 and older spend about $50,220 a year in retirement, according to the Bureau of Labor Statistics' latest Consumer Expenditure Survey. But while that amount of cash can sustain you in certain places, it may not be enough if you live somewhere expensive.

Researchers at WalletHub compared over 180 U.S. cities to determine the most cost-effective destination to settle down. They analyzed annual expenditures and taxes, plus other key factors like health care, entertainment, and overall quality of life, in order to help Americans find where they can best stretch their dollars without needing to sacrifice their lifestyles.

The No. 1 retirement destination: Orlando. It scores a 62.14 on WalletHub's list, as residents there have plenty to do, receive quality health care, and pay no state income tax. On the opposite end of the spectrum is pricey San Bernardino, California, which scores a 37.55.

"I'm not surprised to see Orlando atop the list," says Jeff Ostrowski, Bankrate.com senior mortgage writer. "For cost-conscious retirees, Central Florida offers comparatively affordable housing and low taxes. And Florida long has focused on attracting retirees, so those who move to the area will find the health-care system is geared to their needs."

Here are the five best cities in which to spend your retirement, according to the data.

1. Orlando, Florida       

Total Score: 62.14
Affordability: 13
Activities: 9    
Quality of life: 70
Health care: 68

2. Charleston, South Carolina

Total Score: 61.97
Affordability: 30
Activities: 15  
Quality of life: 68
Health care: 31 

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3. Scottsdale, Arizona

Total Score: 60.58
Affordability: 20
Activities: 32  
Quality of life: 2
Health care: 81

4. Tampa, Florida         

Total Score: 60.38
Affordability: 38
Activities: 8
Quality of life: 69
Health care: 88 

5. Minneapolis, Minnesota

Total Score: 59.98
Affordability: 135
Activities: 2    
Quality of life: 50
Health care: 11

Think about the full picture before relocating

Experts suggest saving 10 times your annual salary for retirement by the time you turn 67 years old. If that seems out of reach, it could make sense to consider a cheaper locale.

"If you had a high-paying job in New York or L.A. and planned to stay in the area during your retirement," Jonathan I. Shenkman, an accredited investment fiduciary and financial advisor at Oppenheimer & Co, previously told Grow, choosing a "location where the cost of living is substantially lower can still make retiring feasible, without having to work longer or save more."

The cost of living in Orlando, the No. 1 city on WalletHub's 2021 list, for example, is 5% lower than the national average, and housing there costs much less than it does in San Bernardino.

Still, consider the full picture. Think about income and property taxes, adds Ostrowski, but don't ignore your happiness: The right choice for you is "deeply personal," he notes. Sacrifices like "moving away from family and friends shouldn't be taken lightly. Before committing to a new place, try renting for a few months or a year to see if you like it."

Take smart steps now to prepare financially for the future

Wherever you ultimately chose to retire, taking some basic steps with money now can help set you up for the future. Experts recommend saving between 10% to 20% of your monthly income in a 401(k), Roth IRA, or a traditional IRA, so you can harness the power of compound interest to grow your money.

One of the best ways to bolster retirement savings is to "take advantage of tax-deferred growth wherever possible," says Wes Hedrick, a certified financial planner and private wealth advisor at Westwood Holdings Group. "And for health care, if possible, utilize a Health Savings Account. All these vehicles allow the money that you save to be invested and grow."

Americans closer to retirement age with less time to save, and those who are unwilling to move, can try picking up a side hustle and cutting down extraneous bills to keep their finances afloat, Hedrick adds.

Whatever your situation, the most important first step is to map out your goals. Check out Grow's retirement calculator to get a sense of how much you should save.

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