Some retirees are asking if they're really living the American Dream. You know - where you retire to a warm climate and spend your senior years in leisure. Though that dream is well known, the old list of popular retirement locations may not live up to fantasy expectations. Here are a few reasons old favorite retirement destinations just don't live up to their image.

In Pictures: Retire A Retirement In 10 Steps

Scenic Bottleneck
Some retirement locations are so incredibly beautiful you may forgive the huge influx of snowbirds crowding you during high season. Sports, arts and entertainment abound, but you have to be patient to get there. One of the biggest threats to a happy retirement is traffic. The INRIX National Traffic Scorecard ranked popular retirement metropolitan areas Ft Lauderdale, Atlanta, and Phoenix among the top 20 worst cities for traffic congestion on its 2009 Annual Report of 100 Most Congested Metropolitan Areas.

Too Much Sun
The heat in the Sun Belt may be dry, but it's still hot. People age 65 and over are more susceptible to heat-related injuries. The National Oceanic and Atmospheric Association reports more annual heat-related deaths than any other type of weather condition including floods, hurricanes, and winter storms. The Centers for Disease Control (CDC) sites chronic medical conditions, prescription drugs, and a reduced ability to adjust to temperature change as reasons the elderly are more likely to experience negative consequences of sun exposure. While it is true high temperatures with low relative humidity allows the human body to cool itself with sweat easier, it also causes the body to become dehydrated. Of course some locations offer many activities for the nocturnal.

Increasing Cost of Living
Now we've come to the point where we have to speak that word. It's the bane of any hard-earned retirement nest egg whose impact is enough to make retirees weep and throw their hands up in despair. Today they can afford extended vacations and lavish lifestyles. Tomorrow it's left-overs and rationed utility usage because of – inflation. There, I've said it. The Bureau of Labor Statistics calculates an experimental consumer price index for the elderly, the CPI-E. The index assigns a higher percentage of income toward medical care, shelter, and heating oil than the overall population. While it is difficult to compare the CPI-E of different geographic locations, the components that make up the index impact choices for retirement locations. (Learn more about retirement budgeting in Simple Ways To Save In Retirement.)

Housing Costs
Rising healthcare costs are prevalent nationwide and moderate climates require little heating oil. But, the cost of retirement dream homes varies greatly by region. Retirees rely heavily on accumulated home equity as an income source. When the cost of living rises faster than their home values, seniors look for ways to cash out and downsize. Towns where home values have not kept pace with inflation make them less affordable to those on a fixed income. On the other hand, areas where homes are increasing in value too quickly make them unaffordable as property taxes and upkeep increases while the ability to sell decreases. Areas where the housing bubble ravaged retirees' home values include: Florida, Nevada and Georgia.
(Another thing to remember is to retire in a place that fits your plans for post-work living. Learn more in Choosing The Right Retirement Destination.)

Bottom Line
Today's retirees look for locations where they can lead a healthy active lifestyle for an affordable price. Cities change with age just like people. The realities of living in once preferred towns may make seniors think twice.

Related Articles
  1. Retirement

    Roth 401(k), 403(b): Which Is Right for You?

    Learn how to decide between a traditional or Roth version of the 401(k), 403(b) or 457(b) retirement plans to help you build your nest egg.
  2. Retirement

    Going Back to Ecuador to Retire: A How-to Guide

    Spending your retirement years in Ecuador can be an affordable and attractive proposition, provided you know the country's laws.
  3. Retirement

    5 Reasons to Start a Business After You Retire

    It can be beneficial in any number of ways: mentally, occupationally and even financially.
  4. Investing Basics

    Fee-Only Financial Advisors: What You Need To Know

    Are you considering hiring a fee-only financial advisor or one who is compensated via commissions? Read this first.
  5. Retirement

    How Much Money Do You Need to Retire at 56?

    Who wouldn't want to retire early and enjoy the good life? The question is, "How much will it cost?" Here's a quick and dirty way to get an answer.
  6. Retirement

    Suddenly Pushed into Retirement, How to Handle the Transition

    Adjusting to retirement can be challenging, but when it happens unexpectedly it can be downright difficult. Thankfully there are ways to successfully transition.
  7. Retirement

    Two Heads Are Better Than One With Your Finances

    We discuss the advantages of seeking professional help when it comes to managing our retirement account.
  8. Retirement

    Don’t Retire Early, Change Careers Instead

    Though dreamed of by many, for most, early retirement is not a viable option. Instead, consider a midlife career change.
  9. Retirement

    Using Your IRA to Invest in Property

    Explain how to use an IRA account to buy investment property.
  10. Retirement

    How a 401(k) Works After Retirement

    Find out how your 401(k) works after you retire, including when you are required to begin taking distributions and the tax impact of your withdrawals.
  1. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  2. Who can make catch-up contributions?

    Most common retirement plans such as 401(k) and 403(b) plans, as well as individual retirement accounts (IRAs) allow you ... Read Full Answer >>
  3. Can you have both a 401(k) and an IRA?

    Investors can have both a 401(k) and an individual retirement account (IRA) at the same time, and it is quite common to have ... Read Full Answer >>
  4. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  5. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>
  6. Are catch-up contributions included in the 415 limit?

    Unlike regular employee deferrals, catch-up contributions are not included in the 415 limit. While there is an annual limit ... Read Full Answer >>

You May Also Like

Trading Center