Retiring in Alabama: Pros and Cons

Is Alabama the right place to retire? Learn about the advantages and disadvantages of retiring in Alabama, including living costs, weather, and infrastructure.

Have you been thinking of retiring to Alabama? It can be exciting to move somewhere new, start fresh, and make the most out of your golden years. But before you make this big decision, get to know as much as possible about your potential destination. Every retiree wants different amenities in their retirement, so picking the right combination of affordability and things to do will help you get the most out of life.

In this guide, we’ll explore what Alabama has to offer seniors looking to make a move. Let’s start discovering why Alabamans are proud to call this southern gem home! Learn about the tax benefits, local government initiatives, community networks, and outdoor attractions of Alabama.

Alabama attracts retirees for the following perks:

Alabama is amazingly affordable

One of Alabama’s biggest draws to retire here is the low cost of living. With an annual average price tag of $35,839 for an individual, you’ll find that your retirement dollars can go much further than many other states. The average 2022 expenditures per person were $6,535 on housing and utilities, $5,904 on healthcare, and $3,186 on food and beverage.

According to 2021 figures, electric utilities cost about $143 a month, while water ran $30 monthly.

Alabama also has several retiree-friendly local government initiatives, including low property taxes, tax credits for seniors, and special exemptions.

GoBankingRate estimates you’d need $599,453 saved to cover living expenses when retiring in Alabama. That includes pulling social security and drawing down 4% a year for costs.

Housing has incredible deals

The median rent price for a one-bedroom home or apartment was $651, while the median monthly mortgage cost was $1,186. How’s that for affordable housing?

And, to sweeten the pot, Alabama’s average effective tax burden is the second-lowest in the United States. Homeowners paid a median $671 in property taxes for 2022! But if you’re 65 and older, you may not even need to pay property tax thanks to the Senior Property Tax Exemption!

Sure, not every Alabama city or town has the same housing affordability. But even Daphne, the state’s most expensive market in 2021 with an average price of $284,928, was well below the national average price of that time, $346,900!

Chill out in the winter

Alabama’s winters are mild and short, making it easy for snowbirds to retire here in the heart of the South. The average low temperature is slightly above freezing during December, January, and February. Consider it a reprieve from shoveling for those tired of being snowed in. Even in north Alabama, the average daily high in Huntsville during winter is 57F, with lows around 33F.

Just how warm it will stay will vary from the north to the south. A day below freezing is pretty rare along the Gulf Coast near Mobile. You might have a day in the North with a few snow flurries. But don’t worry, it won’t stick around.

Natural attractions make living here worthwhile

Alabama offers excellent outdoor recreation, even if you aren’t a retiree. It has three mountain ranges (Cumberland Plateau, Ridge and Valley, and Appalachian Mountains) with stunning scenery. Here, you can explore canyons, caves, and waterfalls along the walking and hiking trails. Retiree adventurers can explore the iconic Talladega National Forest and its 15 unique hiking trails.

Across these mountains and the central plateaus await lakes and reservoirs perfect for lakefront living. In fact, Alabama’s lakes are a top attraction for their excellent fishing and water sports access.

You’ll bask in white sand beaches and emerald green ocean waters along the Gulf coast. Find abundant boat launches to explore the backwater bayous, flats, and gulf front. Enjoy bird-watching opportunities or nature hikes in peaceful places like Gulf State Park. Orange Beach is a popular retirement destination because it has a beach town vibe without Florida beach town prices.

Alabama is friendly

This Southern state has a reputation for its hospitality and laid back pace of life. Why rush when there is much to enjoy? The state’s heritage includes Mardi Gras, blues and gospel music, and the Civil Rights Movement.

However, not everything is sweet tea and peaches when it comes to retiring to Alabama. Let’s be honest about the state’s drawbacks.

Taxation is a mixed bag

While your social security, military pensions, private pensions, and railroad benefits are untaxed, the downside is any withdrawals from an IRA or 401k plan are considered income and can be taxed. Alabama has an individual income tax rate of 5% as of 2022.

And while property taxes are low, sales taxes are much higher. They rank as the fifth-highest in the US. The statewide rate is 4%, but local counties and municipalities can charge on top of that, sometimes as much as an additional 7.5%. The average sales tax in the state was 9%. Groceries are not exempt, unlike other states.

Healthcare access

Overall, Alabama ranks in the bottom third of states for healthcare access. The state has fewer physicians, nurses, and specialists than many of its neighbors. It’s also among the lowest-ranking states for access to mental health services, with fewer than average psychiatrists and psychologists.

A primary reason Alabama ranks so low is that healthcare access is unequal across the state. Sure, in major cities like Birmingham and Huntsville, you have high-quality hospitals and nursing home centers. But if you opt to live in a small town, your choices are quickly limited.

The good news is Alabama’s medicare quality ranks no. 4 in the nation based on US News and World Report. Unfortunately, overall hospital quality is low, as are preventable admissions.

Summers in Alabama can be hot and humid

Alabama has a subtropical climate, meaning it gets plenty of sunshine year-round! But that comes at the cost of some scorching summers. The average daily high in Huntsville during summer is a sweltering 93F, with lows around 72F. Mobile can stay above 90F for weeks.

Staying hydrated and enjoying the pool or AC when it heats up is important.

If you opt to live in southern Alabama, you’ll also need to be ready to contend with tropical storms. The low-lying coastal areas don’t need a direct hit to feel the impact of high winds, rains, and storm surges.

Transportation options are lacking

Public transportation is limited to major cities. Alabama has no Amtrak service and only 10 regional bus lines that serve the entire state. This can be a challenge if you don’t have a vehicle or want to retire in an out-of-the-way place. Getting around is much easier if you can drive.

Get to know the wildlife

And it wouldn’t be the South without our pest friends! This includes wasps, ants, cockroaches, chiggers, and some more exotic nasties. Alabama is notorious for these creepy crawlies.

Be sure to check your home for any gaps or open vents. Wear repellent if you plan to be outdoors in the summer, and consider a regular pest service for your home to keep buzzing intruders at bay.

Top Retirement Destinations in Alabama

When it comes to retiree-friendly places, Alabama has a few standouts. In the southern region, Orange Beach, Fairhope, and Gulf Shores offer beachfront living with affordable amenities. They were among the top three places where people over 65 were moving in 2022.

Birmingham is a great city to retire in, offering an urban lifestyle with a stable job market if you want to work in retirement. It has cultural and historical attractions like the Barber Vintage Motorsports Museum and the Birmingham Botanical Gardens.

In the central region, Auburn and Tuscaloosa are popular retiree destinations. They’re home to nationally ranked universities and plenty of shopping and entertainment amenities. Auburn has active adult living communities, golfing, and an arts and culture scene.

Retire to the outskirts of Huntsville or Montgomery for a more relaxed lifestyle and enjoy everything from golf courses to wineries. Vestavia Hills and Mountain Brook were two of the top ten communities people over 65 were moving to in Alabama. Montgomery’s large VA medical center makes it popular among military retirees.

Retiring to Alabama

With its mild winters, affordable real estate, scenic gulf coast and mountains, retiring to Alabama could be the perfect place for your retirement! Despite the cons of transportation and healthcare access, it can still be a great place if you’re looking for a slower pace of life, beautiful natural scenery, and a generally low cost of living. Retire on your own terms in this Southern state with many choices, from waterfront living to active adult communities.

Learn more about moving to Alabama and talk to a local real estate agent today.