What to Know About Retiring to Colorado

While many people think of Florida or Arizona as retirement destinations, there’s a new contender on the map, and it might surprise you. Ranked no. 3 by Bankrate, Colorado is now a top retirement destination and has been for a few years. Retirees are finding living in Colorado delivers many benefits, like some of the nation’s best healthcare. And while you may not have the beach, you’re surrounded by a beautiful natural landscape with things to do all year round.

Let’s explore the advantages and disadvantages of retiring to Colorado to see if it’s the right state for your golden years.

Pros Of Retiring To Colorado

Great Weather

The conditions vary across the state, but Colorado generally provides retirees with warm days in summer and cool winters perfect for outdoor activities like hiking, biking, fishing, golfing, or skiing! Plus, the climate is dry, so when it’s 90F, it doesn’t feel as hot because of the lack of humidity. That same dryness leads to more days of sunshine so you can live life to its fullest.

Of course, if you live at higher elevations, expect more snowfall and colder winter temperatures. Conversely, if you’re in southern or eastern Colorado, prepare for hotter summers.

Natural Beauty

Nature has been proven to lower stress levels, and in Colorado, you’re surrounded by national parks, forests, and outdoor lands. The majestic Rocky Mountains have over 58 peaks topping 14,000 feet, leading to snow-capped peaks long into the summer months.

Across the scenic deserts in the south and east of the state, find stunning rock formations, hot springs, and winding canyons. Truly, Colorado is one of the most beautiful states in America. It did inspire the patriotic tune, “America, the Beautiful,” after all.

Tax Advantages

Colorado wins over retirees with plenty of tax incentives. There are no state income taxes on Social Security. Other retirement income up to $24,000 can be excluded for taxpayers aged 65 and up. That includes government and military pension plans. If you need to pay individual income tax, the rate is a flat 4.4% as of 2023.

Sales taxes are high, but groceries and prescription drugs are exempt. There is no estate or inheritance tax.

Additionally, Colorado provides a property tax homestead exemption for seniors 65 or older that can save you up to 50% for the first $200,000 in assessed value. The caveat is you must have owned and lived in the home for at least ten years. A deferred property tax payment option delays payments until the property is sold or transferred.

Colorado residents age 65 and older could qualify for a property tax/rent/heat rebate if their single filing income is under $15,831 or their married income is under $21,381.

Exceptional Medical Care

Colorado has an excellent healthcare system with some of the country’s best hospitals and medical providers. On US News & World Report, it rounds out the top ten states. Healthcare quality ranked fifth, and public health initiatives seventh. Colorado has high marks for healthcare outcomes, although its costs are average.

Retirees can find top-notch doctors and specialists for their specific needs, plus numerous community clinics for those on limited incomes or without insurance.

The top-ranked hospital is in Aurora, the UCHealth University of Colorado Hospital, which is nationally ranked in pulmonology, rheumatology, and diabetes care. Its geriatrics care is considered high-performing among US hospitals.

Other top-ranked healthcare centers are UC Health Medical Center of the Rockies in Loveland and SCL Health St. Joseph Hospital in Denver.

Center For The Arts

Colorado has a tradition of excellent visual and performing arts programs. From renowned museums to art galleries, retirees have plenty of opportunities to enjoy the best of classical music as well as modern entertainment.

The Denver Performing Arts Complex is the second-largest arts complex of its kind in the nation. From here, you have the state’s symphony orchestra, opera, theater company, and ballet. Another destination is the Colorado Springs Fine Arts Center. Museums across the state exhibit various works and historical treasures. The Museum of Contemporary Art in Denver is particularly well known.

The state is no stranger to the art festival, with huge, crowd-drawing events throughout the year. As there are many, it’s hard to decide what top festivals to feature, but to give you a sampling of what’s available:

• Cherry Creek Arts Festival, Denver
• Aspen Music Festival, Aspen
• Colorado Shakespeare Festival, Boulder
• Estes Park Fine Arts and Crafts Festival
• Telluride Bluegrass Festival, Telluride

These are just five, but rest assured, wherever you end up, an arts festival is sure to be in a community nearby at some point in the year.

Many Retirement Communities

Believe it or not, Colorado is home to numerous retirement communities. Since 2010, there’s been a big jump in the number of retirees, so the market has quickly catered to their specific needs.

These communities include independent living centers, assisted living centers, and nursing homes with various amenities and activities. Find 55+ communities with amenities like golfing, walking trails, and social clubs near high-demand locations across Colorado.

Cons of Retiring To Colorado

With tax advantages, excellent medical care, and plenty of cultural events, it’s no surprise that many people are packing up for Colorado. However, there are also some downsides associated with retiring in Colorado.

High Living Expenses

Although Colorado offers plenty of advantages for retirees, it is a high-cost-of-living state. Sure, it may not stack up as high as cities in the northeast or the California coast. Still, prices for goods and services are high here, rising as much as 12% above the national average. The average amount spent on living expenses in Colorado in 2021 was $46,642, with housing being a significant outlay.

Housing prices can be steep in some areas, particularly in larger cities like Denver or Boulder. The average single-family home cost $568,601 in 2022, while townhomes and condos averaged $420,000. The average housing costs ran $1,068 to $1,744 per month. Still, there are affordable communities outside the Front Range cities that may be worth taking a closer look at for buying a home in Colorado.

Additionally, groceries and other necessities can come at a premium due to the state’s remote location. In 2021, groceries averaged $332 per person per month, while transportation varied from $4,900 to $13,317 per year.

City Traffic Is Congested

Colorado’s major cities, like Denver and Colorado Springs, can be heavily congested with traffic at peak times. In fact, Denver ranks among the nation’s worst for congestion and getting around. This can make getting around town a challenge for retirees without vehicles, as the city’s public transportation is lagging behind cities of a similar size. However, it is working to improve by adding light rail, rail, and buses.

Even if you don’t live in Denver, getting around can be tough without a car. Colorado is a big state with wide, open spaces. The next city or town can be further away than you think, with fewer resources in between them. Plan wisely when you need to travel.

Severe Weather

While Colorado’s climate is generally pleasant, it can come with some harsh conditions. Weather can change dramatically within a day, so you see many residents layering up during the seasons. Don’t be surprised when it’s bitterly cold in the morning and perfect golfing weather by afternoon.

Retirees need to be prepared for severe thunderstorms, intense hail storms, and even snow in the winter months. Snow can fall by the foot in some parts of the state. The other extreme is drought, which is increasingly common and challenging the entire state.

Damaging Wildfires

Due to its dry climate, Colorado is prone to wildfires that can cause massive destruction and put lives at risk. This risk is growing as the state’s climate keeps drying out. The lack of rain is making fighting these fires even more challenging. In 2020, over 600,000 acres burned during wildfire season, killing two and burning 1,000 structures.

If you live in a high-risk area, learn that information ahead of time. Retirees must stay up-to-date on wildfire warnings and be prepared with an evacuation plan.

Altitude Sickness

At an average elevation of 6,800 feet above sea level, Colorado can cause altitude sickness in some people who are not used to higher elevations. Symptoms may include headache, dizziness, and exhaustion. It’s a good idea to visit for an extended time, perhaps a month or so, to see if it impacts you long-term.

Tourism Destination

As one of America’s most popular lifestyle destinations, retirees may compete for resources with tourists. This can include crowded restaurants, busy roads, and overbooked attractions – all of which can make retiree life more difficult.

Some of this tourism is seasonal, as with ski season at the mountain resort towns. If you end up living in a tourist area, just be aware and ready for the influx of visitors.

Water Challenges

Colorado is a drought-prone state with limited water resources. The state relies on the snowpack for water, but this has to a) be brought in and b) has become increasingly unreliable in recent years.

If you’re used to frequently watering the lawn or gardening, your consumption may be more limited. Before you go, learn the importance of conserving water and what steps you’ll need to take to reduce water consumption.

Another thought: if you enjoy water sports, keeping them up in this dry state will be challenging. Rivers and reservoirs are far apart and few.

Frequently Asked Questions About Retiring In Colorado

Is Colorado tax-friendly for retirees?

Colorado is definitely tax-friendly for retirees, no matter where you decide to move to, if it is a quaint village or the largest city. The state has tax breaks on Social Security income and some of the lowest property taxes. Residents 65 and older can benefit from the Senior Property Tax Exemption, which reduces taxes on up to 50% of the first $200,000 in home value.

A pension and annuity exclusion allows deductions on up to $24,000 of retirement income, including Social Security. In addition to the tax benefits, the state’s outdoor activities and high quality of life make it an ideal destination for achieving any retirement goals.​

What is the retirement age in Colorado?

In Colorado, the full retirement age aligns with the national standard set by the U.S. Social Security Administration. It is currently 67 for individuals born in 1960 or later. However, people can claim reduced Social Security benefits as early as age 62 or delay their benefits until age 70 to receive a larger monthly payment.

What are the benefits of retirement in Colorado?

Retiring in Colorado offers a wide range of benefits for seniors. Here’s a look at some of the advantages:

1. Outdoor Activities & Recreation: Colorado’s natural environment is a haven for retirees who enjoy staying active. There’s no shortage of outdoor recreation with countless hiking trails across its national (Rocky Mountain National Park) and state parks (Cheyenne Mountain State Park), hot springs, ski towns, and more. Popular activities include skiing, biking, fishing, hiking, camping, and train rides such as the Durango & Silverton Narrow Gauge Railroad or the Georgetown Loop Railroad. All this and more makes it easy for seniors to enjoy physical activity year-round in Colorado.
2. Mild Climate: Colorado offers a mostly mild and dry, four-season climate. It boasts over 300 days of sunshine per year, allowing retirees to enjoy enough heat to practice outdoor activities while covering ski resorts with snow.
3. Ample Opportunities for Social and Cultural Engagement: Colorado boasts a vibrant cultural scene with many historical sites, museums, libraries, and theaters offering endless entertainment for all ages. Many towns and cities also provide senior centers and senior clubs that host social activities tailored for seniors, helping retirees stay entertained and socially engaged.
4. Access to Healthcare: Colorado offers great access to health care. Top-notch healthcare facilities, include the UCHealth University of Colorado Hospital in Aurora, CO, UCHealth Medical Center of the Rockies in Loveland, CO, and UCHealth Memorial Hospital in Colorado Springs. The state has top-rated healthcare services, providing retirees with reliable medical care.
5. Senior Living Options: Colorado offers a range of senior living options. The state has 22 Continuing Care Retirement Communities, which encourage independent living and offer assisted living and memory care for those who may require it. Vi at Highlands Ranch, Liberty Heights, Brookdale Meridian Englewood, Brookdale Skyline, and Brookdale Greenwood Village are the top communities.

What is the average retirement income in Colorado?

According to the Census Bureau, the average retirement income in Colorado is $61,939, approximately $2,843 per month. However, communities like Highlands Ranch have retirement incomes above $75,000.

Is it expensive to retire in Colorado?

Colorado is one of the best places to retire in the country, but it is a high-value one. The cost of living in Centennial State is 20.5% higher than in the rest of the country, particularly in large cities like Denver or Boulder. Still, you can decide to live with modesty in a smaller location and still have access to all the advantages.

Colorado offers an exceptional retirement lifestyle for seniors, with world-class amenities, a plethora of outdoor recreation, and a vibrant culture. The high property values (median home cost of $527,200, above the national average) often reflect the abundance of things to do, from hiking to skiing, shopping options, and entertainment.

Colorado’s unique blend of urban convenience and stunning natural landscapes makes it attractive for those seeking an active lifestyle and long-term solid real estate investment potential.

Should you retire to Colorado?

All in all, retirees should carefully weigh the pros and cons of retiring in Colorado before making a move. With its stunning scenery, outdoor activities, and active culture, it can be a great place to get the most out of your retirement years – but some drawbacks must be considered. But ultimately, it’s up to each retiree to decide if the benefits outweigh the potential challenges.