The state of Colorado is well known as one of the top tourist destinations in the country, but few people know how enjoyable retirement living can be in the Centennial State. For active seniors who enjoy the outdoors in every season of the year, Colorado offers beautiful scenery and moderate weather conditions with few threats from natural disasters of any kind. Major cities that line the Front Range are often familiar to those who have visited the state, but the most popular retirement destinations are the smaller towns located in the various regions of the state. For those considering a move to Colorado for their retirement years the most important considerations are similar to any preparation for retirement. Ensure that your retirement savings plan includes the increased activities that are a natural part of the enjoyable Colorado lifestyle.
Saving Tips & Strategies
Every working person must consider the amount of money and kinds of assets that will be required to retire in a style that supports interests and improves quality of life in the later years. Careful consideration must be given to the many kinds of financial securities that can be used to protect the principal amount from market fluctuations. Address these major considerations when planning for retirement savings:
Financial Advisor
Consult with a respected financial professional who can answer your questions concerning the financial instruments that will optimize savings growth while protecting your investments. Reaching the goals is just as important as preventing monetary loss as retirement age nears.
Income Sources
Document every potential source of income that will be available at retirement including Social Security income, pensions, savings, and investments are the most common sources. Some major assets can be used as income sources as lifestyles change as recreational vehicles and large homes are replaced with modest homes, and surplus funds are invested.
Retirement Budget
A dream lifestyle is possible when the major categories of the retiree’s budget are outlined during the working life. Having additional discretionary time will require more money to spend on interests including travel, entertaining, and hobbies. Housing expenses will change overall health declines with age. Medical expenses will not disappear but might shift from prevention to sustaining comfort during illness. The budget must be detailed enough to reveal unspoken areas of interest.
Avoid Scams
Every retiree should have at least two people with whom they discuss every monetary matter. One must be a professional financial advisor who is aware of scams and fraudulent practices. The other person should be a trusted family member who knows you well enough to challenge some of your decisions. Talk with both of these people prior to stepping into any investment decision.
Calculating Expected Savings Needed
Retirement calculators are readily available online and ask some simple questions concerning your retirement goals. When you input your current income, current age, retirement age, and monthly income requirement at age 65, the calculator will give a good indication of the amount of money that must be saved to reach that monthly goal. Complex calculators ask for more detailed information concerning other income sources, possible interests during retirement, and even the expected retirement location.
Consistent use of a reliable calculator will give valuable information concerning the savings progress. Retirement worksheets can be filled out to aid in accumulating the information and performing some calculations to show the required savings rate during each year prior to retirement. As various amounts are input a more comprehensive retirement picture can be developed. Some worksheets can be saved for easy reference when the next iteration of planning is undertaken.
Information concerning the cost of living index for a specific location can assist in the decisions required for saving enough for retirement. When the potential retiree works in a very expensive area and retires to a less place, the savings will stretch further. The converse is also true, so if the goal is to retire to a very expensive city, more money will be required for the retirement years. Not including the possible location in the retirement planning can limit the choices later in life.
Why People Retire in Colorado
Retirees have many reasons for choosing to retire including wanting to have more time to spend with family and friends as well as pursuing personal interests and investing in the lives of others. Location has always been important when spending leisure time. While the need to earn a living restrains many people in a place for many years, removal of the job will open doors of opportunity to live virtually anywhere. Many people who choose to live out their lives in Colorado do so for the following reasons:
Home – Most retirees living in Colorado were born and raised in the state and will spend their retirement years on homesteads that have been passed down from generation to generation. Many have grown children living on some parcel of the expansive land that has been in the family for decades. People who live in the larger cities will plan to make a final move to retire in smaller communities where life is simpler and less expensive.
Climate – From the deep snow of the highest mountains to the desert plains of the farmland at the western edge of America’s Bread Basket, Colorado has every imaginable temperature range for the comfort of anyone wishing to spend their retirement years within the borders. While summer and winter storms of varying types can arrive in just moments, the state averages 350 days of visible sunshine every year. Outdoor living is the standard for people of every age because of the moderate temperatures and low humidity.
Recreation – Hunting, fishing, skiing, camping, biking, and hiking are just a few of the outdoor activities enjoyed by Colorado retirees. With some of the most beautiful scenery easily reachable by standard vehicles, many people spend the entire summer outdoors. Gold medal catch and release fishing waters offer enjoyable fishing experiences with large fish of multiple species. Ski resorts are located in most regions of the state and offer great exercise for the most active seniors. Large gatherings of recreational vehicles become small cities during the summer months and seniors from all over the country meet lifelong friends in these special places.
Tourism – Sometimes one of the best ways to see family and friends more often is to move to a place they love to visit. Retirees will choose certain locations in Colorado because of the recreational preferences of people who will visit. A larger home is purchased so people can visit and stay for long periods to ski and enjoy the many other activities available in Colorado. The retirement home becomes the new location for holiday celebrations and summer vacations that were once spent in hotels and resorts in other places.
Healthcare – Many regional hospitals offer quality healthcare to people of every age. Specialty hospitals and clinics are prevalent in the largest cities for easy access to anyone needing advanced care. City hospitals are busy, but healthcare is available to all citizens whenever the need arises. Helicopter services are maintained in cooperative agreements for emergency evacuation when immediate care will save lives.
Cost of Living – Colorado is ranked 33rd of all the states for the overall cost of living at 102.5 on the cost of living index.
Housing – Ranked 17th in home prices.
Goods and Services – Colorado has a score of 101.72 on the cost of living index.
Transportation – Ranked 36th in transportation costs at 99.71 on the cost of living index.
Income Taxes – Ranked 34th with a flat state income tax rate for all taxpayers of 4.63% of federal taxable income.
Affordable Taxes
Sales tax rates vary across the state as localities charge sales tax rates specific to their tax revenue needs to provide local services to citizens, but the 2.9% state sales tax rate is low.
Gasoline tax is 22 cents per gallon.
Diesel fuel tax is 20.5 cents per gallon.
Colorado’s state income tax is one of the lowest in the nation at a flat 4.63%.
The average income in Colorado is $48,300 with a state and local tax burden of $4,359 (or 9%) which ranks 34th in the states. Since this tax burden is considerably lower than the average, many seniors find that living in Colorado is much less expensive than other states.
There is not a standard deduction associated with the state income tax calculation.
Federal exemptions and credit amounts apply including the medical/dental deduction.
Exemptions for Seniors include:
- – The first $24,000 of income from pensions, Social Security, and annuity withdrawals are exempt from state income tax.
- – Social Security income that is not taxed by the IRS is not added into the adjusted gross income for the state income tax calculation.
- – VA benefits are not taxable since they are generally applicable to a disability.
Property Taxes – A homestead exemption for a senior over age 65 who has been living in a home they own for the past 10 years or more. Disable veterans also enjoy this tax relief exemption.
Inheritance tax is not assessed in Colorado. Estate taxes do not apply to anyone whose date of death is after January 1, 2005.
Most Popular Colorado Retirement Locations
Colorado has a very diverse population demographic that is not representative of the statistical “best places to retire” studies. The highest concentration of citizens over the age of 65 is in the rural counties where many of these individuals have lived their entire lives. With 9.8% of the state’s entire population over retirement age, seniors are staying in their native counties where many of these counties do not even have a retirement home. The top 10 counties with the highest percentages of retired citizens are: Baca (22.4%), Sedgwick (22.1%), Delta (19.7%), Phillips (19.4%), Washington (18.2%), Las Animas (18.0%), Kiowa (17.6%), Mineral (17.3%), Dolores (17.1%), and Huerfano (17.0%). All of these counties sparsely populated and do not appear on the “best of” lists compiled by major newspapers and magazines.
One list of the “Top 100 Retirement Cities” includes cities such as: Denver (#27), Boulder (#29), Fort Collins (#36), Colorado Springs (#39), and Grand Junction (#94). Only the city of Denver has a concentration of retired people over the state average, which is 11.3%. There are many retirement communities and homes within these larger cities, but smaller cities are chosen as retirement havens because of the quieter lifestyle.
Colorado Springs always has been a favorite final destination for retired Air Force personnel because of the military services available and the active lifestyle of the residents. The city’s central location boasts easy access to the mountains and an easy drive to Denver for cultural and major sporting events.
Canon City is a growing city of approximately 35,000 that lies in the Arkansas River Valley where the climate is warmer and the growing season is longer. Many seniors choose Canon City because of the friendly people and the easy access to the larger cities of Pueblo and Colorado Springs without the hustle and bustle of city life. Recreational activities include Gold Medal fishing waters, white water rafting, and famous tourist attractions including the Royal Gorge.
Colorado City is located between Pueblo and Walsenburg on the Front Range of the Rocky Mountains. Affordable homes in a rural setting have drawn many retirees from colder regions of the state, and a diverse community has been developing since 2000.
Walsenburg’s population is aging without much natural growth or immigration so the state built one of a Veteran hospital there. The concentration of retired people has grown from 17% to 20% since the 2000 census was completed. Many people love the breathtaking beauty in this southern crossroads to the Rockies where many people stop just for lunch and fuel before continuing to their next destination.
Colorado Retirement Planners
There are numerous financial professionals who specialize in retirement planning. Personal referrals are one of the most dependable ways to find a reputable professional with the retirees best interests at heart. When evaluating any advisor spend some time with that person and ask every question that you have. The best advisors are the ones who listen and provide choices that address your goals and fears. Any person who promises unrealistic growth with no risk at all is not reputable and should be avoided. A few of the fine advisors available in Colorado are:
English Financial — Colorado Springs, Colorado
5350 Tomah Dr. Suite 1300
Colorado Springs, CO 80918
(719)528-6823
(888)528-6823
Email: Al. English@LPL.com
Website: www.LPL.com/Al.English
Jim Saulnier, LLC — Fort Collins, Colorado
322 East Oak Street
Old Town Fort Collins
(970)530-0556
Email: Jim@JimSaulnier.com
Website: www.JimSaulnier.com
Colorado West Investments, LLC — Montrose, Colorado
1731 E. Niagara Rd
Montrose, CO 81401
(970)249-9882
Email: Invest@CoWestInvest.com
Website: www.CoWestInvest.com
Conclusion
When planning for retirement in Colorado visit every area of the state in different seasons. Spend time with the locals and learn how life is lived in that special location. Take the time to learn about the plants and animals that are native to each region and consider the ways that your time could be spent in your retirement years. When life is packed with activity and quiet moments are rare, deciding on a retirement location is very challenging. Every person changes as they age, and a location chosen after one visit may not be the best choice.
Many people choose Colorado after a lifetime of summer visits spent with family and friends frolicking in the mountain streams and hiking up every hill that presents a challenge. Those physical activities are great for the young person who needs some exercise, but other types of adventures await the retiree. Moving to a new region of the state can be challenging and cause a great deal of stress for someone who wants to settle into a quiet lifestyle. Choose carefully to ensure that no surprises are encountered after property is purchased and changes are no longer possible.
Your final retirement location may be a place that most people you know have never heard of or visited. Tour the state independently or with a group and decide what attributes must be present in the area of your choice. If you love to walk through museums and go to Broadway shows, Denver is going to be your choice. If you enjoy quiet evenings where the sound of traffic is a distant memory, venture into the many towns that offer solitude with easy access to the larger cities on those days you want an adventure.