Apr 26, 2022

Why Alabama is a Great Place to Retire

Manny Cominsky

Next up in our series on all the best places to retire in the country is another warm weather state in the southeast: Alabama. As we’ve covered before on the Sunbound blog, the southeast is one of the most popular regions in the entire United States when it comes to retirement destinations. This is because the southeast has so many of the things that people are looking for when it comes to what they want in retirement: warm weather, low taxes and low cost of living, and plenty of amazing retirement housing and entertainment options. The southeast checks all these boxes and more with its amazing year-round weather and plenty of options for activities like some of the nation’s top golf courses and beaches.

But don’t just take our word for it: trust the ever-increasing number of people who have relocated to the southeast over the past couple of years for retirement. While southeastern states have always been popular retirement destinations, this trend has increased greatly in the past few years. This increase in relocations has certainly been spurred on by the Covid-19 pandemic, which caused many people to flee cities (particularly in cold northern states), for warm destinations with plenty of nice weather for outdoor activities. But as we’ve covered before, the trend of people leaving cold, high tax states, for warm, low-cost states in the southeast well pre-dated the Covid-19 pandemic. 

As we’ve written about in some other blog posts, southeastern states like Florida and Georgia are some of the most well-known retirement destinations in the country. But they’re not the only amazing places to retire in the southeast, and one of the great uncovered gems is Alabama. If you’re thinking you’d like to live in the southeast for its great weather, low cost of living and easy access to the beach, then Alabama might be the perfect place to relocate for retirement. 

Amazing Weather and Outdoor Activities

Located along the Gulf Coast, Alabama residents enjoy year round warmth just like their neighbors in Florida, meaning that winters are mild and the outdoor activities never need to come to an end. While the summers can certainly get hot, being near the Gulf of Mexico makes it easy to escape to the beach, and living near the water can give you access to the more temperate climates that come from being on the coast. And residents in the northern part of the state get some relief from the heat by living in the elevation of the southern stretches of the Appalachian mountain range.

Spend your retirement on the Gulf Coast enjoying Alabama's beautiful white sand beaches.

All that warm weather will give you plenty of opportunities to get out and about, which is a good thing because there’s so many amazing opportunities for outdoor adventure in Alabama. First, while Alabama has a relatively short coastline, its white sand beaches are some of the prettiest in the country. And while much of the coastline south of Alabama is technically in Florida, living in Alabama still gives you access to all these miles of beautiful Gulf Shore coastline and beaches. Not only does easy access to the coast mean plenty of relaxing beach days, it also means plenty of opportunities to take advantage of the world-class fishing in the water around Alabama (not to mention all the fishing that you can do in Alabama’s many lakes and rivers). 

Getting off the coast, there’s still plenty to do outdoors in the rest of the state. Not only does the year round warm weather mean that you can always play your favorite outdoor sports like tennis, bocce, or pickleball, Alabama also has some of the nicest golf courses in the country. 

Along with plenty of sporting opportunities, Alabama also has plenty of things for the nature lover to do as well. Alabama has no shortage of beautiful natural features, from the Appalachian mountains in the north of the state to the countless rivers and streams for all sorts of water activities like boating and fishing. If a retirement full of outdoors adventure sounds like your type of thing, then Alabama might be the perfect place for you.

Low Cost Retirement

Not only will you have plenty of sunny days to spend pursuing all your favorite hobbies if you retire to Alabama, you’ll also probably have some extra money to do so as well. This is because Alabama has an incredibly favorable tax environment for retirees, according to Smart Asset, a website offering consumer-facing financial information. 

First and foremost, and one of the most exciting things about Alabama’s tax landscape, is that it is one of the 38 states nationwide that does not tax Social Security as income, which can provide for significant savings over the course of your retirement when compared to living in a state that does tax social security income. Unlike some other states, Alabama does tax income from retirement pensions from both public and private employers. However, while Alabama does tax this income, the rate is relatively low with a maximum of 5% on income over $3,000 per year.

Another thing that lets Alabama retirees make the most of their retirement savings is that property taxes in Alabama are very low when compared to the rest of the country, equaling roughly one fourth the national average, with an average state effective property tax rate of 0.40% or just over $609 a year. Not only are property taxes low state wide, but they are particularly good for retirees who can claim an exemption from 100% of property taxes in some cases under Alabama’s homestead exemption. This exemption can even apply in some cases to county level property taxes as well. 

Unfortunately, Alabama does have a sales tax that exceeds the national average, with cities collecting their own sales taxes in addition to the baseline 4% statewide sales tax. That being said, while Alabama shoppers do face a higher than average sales tax, overall retirees in the state face one of the friendliest tax burdens in the country. 

Historic and Beautiful Cities

Not only does Alabama offer retirees amazing weather and tax benefits, it also has some of the south’s most beautiful and historic towns which offer plenty of cultural and entertainment options. College towns like Tuscaloosa and Auburn, home to the University of Alabama and Auburn University respectively, offer access to all the arts, culture, and entertainment that come with living near world-class universities (not to mention some of the most exciting college football stadiums in the country). If you want a slightly larger city, then a place like Birmingham might be perfect as it offers access to all of the amenities and healthcare options you would expect from a major city while still letting you live a warm, low-tax Alabama retirement. And finally, for those who love small towns, places like Florence, located in the northwest of the state on the Tennessee river, or Pritchard, a Mobile, Alabama suburb close to the water, offer residents a laid-back lifestyle while still having easy access great outdoors and lively downtown areas with shopping, dining, and plenty of entertainment. 

Retiring to a college town like Tuscaloosa or Auburn means plenty of culture and entertainment, particularly in the form of the state's beloved college football teams.

If you want to learn more about retiring in Alabama, reach out to us at info@sunboundhomes.com. We’d love to hear from you, and tell you all the things that we think make Alabama great for retirement.

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