The voices of Urban Institute's researchers and staff
February 13, 2012

The shifting retiree migration

February 13, 2012

My mailbox this past holiday season included greetings from several well-wishers describing their future retirement plans. These notes startled me because my friends—still nearly two decades from traditional retirement age—seem to be bucking the trend of working longer. But I wasn’t surprised about where they’re planning to spend their golden years. Like the latest wave of retirees, they’re forsaking Florida, the traditional retirement haven, and scouting locations elsewhere, including the Georgia coast and the Tennessee hills. These shifting retiree migration patterns matter a lot to local communities.

Back in 1990, more than one in four retirees age 55 to 65 who relocated across state lines moved to Florida. More than 1 in 20 moved to Tampa, about twice as many as relocated to Phoenix, the second most popular destination. Seven of the top 10 cities for migrating retirees were located in Florida.

Fast forward to today, and the patterns are quite different. Florida is still the most popular destination for relocating retirees, but it attracted only one in seven of those age 55 to 65 who crossed state lines between 2005 and 2010. Only three metros in the state now rank among the nation’s top 10 magnets for retirees. These days Americans are moving to cities around the country when they retire. The most popular destinations now include Phoenix, Atlanta, Las Vegas, and Dallas, fast-growing metros in the Sunbelt. But older, colder cities like New York, Washington, DC, and Chicago also attract many retirees.

Top Metros For Retirees Age 55 To 65 Who Relocated Across State Lines, 2005-2010

Top Metros For Retirees Age 55 To 65 Who Relocated Across State Lines, 2005-2010

Source: Author’s calculations from the American Community Survey

Shifting mobility patterns matter because retirees help magnet cities prosper. Americans who relocate when their careers end are generally wealthier and healthier than those who stay put. Their home purchases and other spending invigorate the local housing market and broader economy. They pay local property and sales taxes but don’t use many government services, at least in the short-run before they need long-term care. Many retirees serve their communities by volunteering at local nonprofits.

As my colleague Howard Gleckman points out, many states try to woo wealthy seniors with tax breaks, such as by exempting pension income from taxes. It’s not clear that this strategy works, but it seems likely that the competition will heat up as the wave of retiring boomers intensifies.    

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