9 Budget-Friendly Towns in Alabama for Retirees

Here is the number that should decide where you retire in Alabama: 0.37 percent. That is the state's average effective property tax rate, second-lowest in the country behind Hawaii, and the typical Alabama homeowner pays roughly $890 a year. At 65 you are exempt from the state portion entirely, whatever your income, and lower-income seniors can get the county share waived too.

The income side is just as good. Alabama taxes none of your Social Security, none of your pension, public or private, and none of your military retirement. The catch is sales tax, which runs close to 9.3 percent combined and is among the highest anywhere. Buy a house here, not a boat.

With that settled, the question is where. Alabama's median home price sits in the neighborhood of $225,000, and the nine towns below sit on both sides of that figure, so the numbers are stated plainly in each case.

Scottsboro

Scottsboro is the cheapest entry here by a comfortable margin, with housing well under the state median, and it has the single strangest attraction in Alabama. The Unclaimed Baggage Center buys the luggage airlines never reunite with its owners and sells the contents, which means the inventory turns over constantly and nobody, including the staff, knows what is arriving.

Beyond the retail archaeology, the town sits on Lake Guntersville in Jackson County with marinas, campgrounds, and some of the better bass fishing in the state. The courthouse square anchors a small downtown, and the surrounding hills are the southern tail of the Appalachians. For a retiree whose main requirements are cheap, quiet, and near water, Scottsboro is difficult to beat.

Florence

Florence anchors the Shoals, and the Shoals is one of the most consequential patches of ground in American music. W.C. Handy, the Father of the Blues, was born here in a log cabin that is now a museum holding his trumpet and his handwritten sheet music. A few minutes away in Muscle Shoals, FAME Studios and Muscle Shoals Sound recorded Aretha Franklin, Wilson Pickett, the Rolling Stones, and Lynyrd Skynyrd.

The University of North Alabama keeps a lecture and performance calendar running year-round and supports better medical facilities than a town this size would otherwise have. The Shoals Theatre handles the stage plays and classic films. Housing runs around $330,000, above the state median, which is the price of a college town with a music history.

Athens

Athens has the oldest continuously operating college in Alabama in Athens State University, founded in 1822, and a courthouse square that still functions as one. It is also among the safer towns in the state, which matters more to some buyers than any other line on the list.

Limestone County property taxes run below much of the state, which is saying something given where Alabama starts. The Swan Creek Greenway covers the walking, the Tennessee River is close for boating and fishing, and Huntsville is half an hour east when you need a specialist or an airport. Homes average around $390,000, the second-priciest here, largely because Huntsville's growth has spilled over the county line.

Prattville

Prattville was built around Daniel Pratt's cotton gin works, once among the largest manufacturing operations in the South, which supplied gins to farms across the country. The mill buildings along Autauga Creek have been converted to condominiums, and the red-brick downtown around them now holds boutiques and restaurants.

The oddity worth driving for is the Bamboo Forest on Upper Kingston Road, acres of dense bamboo with a walking trail cut through it, which looks nothing like the rest of Alabama. Prattville also sits on the Robert Trent Jones Golf Trail at Capitol Hill, which is the genuine draw for a lot of retirees here, and Montgomery is twenty minutes away. Homes average around $334,000.

Eufaula

Eufaula sits on the Chattahoochee at the Georgia line, and its Seth Lore and Irwinton Historic District holds more than 700 historic structures, one of the largest such districts in Alabama. Shorter Mansion, an 1884 Neoclassical house with seventeen Corinthian columns, is the one everyone photographs. The spring pilgrimage tour has been opening private homes since the 1960s.

The other reason to be here is the water. Lake Eufaula covers 45,000 acres and goes by the Bass Capital of the World, with Lakepoint State Park on the shore handling the lodge, marina, and campground. Housing runs well below the state median, which makes this one of the better value-per-square-foot propositions in Alabama.

Decatur

Decatur sits on the Tennessee River in the north of the state, and the reason it belongs on a budget list is straightforward: housing here runs below the state median in a city large enough to have its own hospital, its own symphony, and a Costco. For retirees who want cheap without being an hour from a specialist, that combination is rare.

The town holds two of the largest Victorian historic districts in Alabama, Old Decatur and Albany, several hundred buildings between them. Point Mallard Park has golf, trails, and the aquatic center that opened America's first wave pool in 1970. Just downriver, Wheeler National Wildlife Refuge takes in tens of thousands of sandhill cranes each winter, along with a small number of endangered whooping cranes, and the observation building lets you watch them without standing in the cold.

Daphne

Daphne sits on the eastern shore of Mobile Bay and is the cheaper way to live on this stretch of water, averaging about $328,000 against Fairhope's much higher figure a few miles south. Bayfront Park has the walking trails and the view.

The local phenomenon is the jubilee, which happens on this shore and almost nowhere else on earth: under the right combination of wind, tide, and oxygen, crabs, shrimp, and flounder crowd into the shallows in numbers you can gather by hand. It happens a handful of times each summer, usually before dawn, and neighbors phone each other when it starts. Worth knowing before you buy: this is hurricane country, and coastal insurance costs what it costs.

Fairhope

Fairhope is the expensive one, averaging around $475,000, more than double the state median, and it is on this list because a lot of retirees pay it anyway. What the money buys is a town founded in 1894 as a single-tax colony, an experiment in Henry George's economics, with land still held in common by the Fairhope Single Tax Corporation. That structure was designed to prevent speculation, which is why the waterfront is public and the downtown is coherent.

The flower baskets on every lamppost are a municipal line item. The Eastern Shore Art Center runs classes and exhibitions, the Fairhope Museum of History covers the colony years, and the municipal pier reaches about a quarter mile into the bay. Alabama's tax treatment applies here exactly as it does in Scottsboro, which takes some of the sting out of the purchase price.

Foley

John B. Foley came through on the train in 1901, liked what he saw, and bought 50,000 acres. The town that grew out of that purchase sits a few miles inland from Gulf Shores, which is the point: you get the beach within fifteen minutes without paying beachfront prices. Homes average around $311,000.

The Foley Railroad Museum covers how the trains built this part of the state, and Graham Creek Nature Preserve has several miles of trail through pine savanna and wetland. OWA Parks and Resort handles the grandchildren with rides, an arcade, and a concert venue. The same coastal insurance caveat applies as at Daphne.

Doing The Math

The tax position is identical in all nine, so the decision comes down to the purchase price and what you want out the front door. Scottsboro and Eufaula sit well under the state median and give you a lake apiece. Decatur and Foley land in the middle, one on the Tennessee River with cranes wintering downstream, one fifteen minutes from the sand. Prattville and Florence buy a golf trail and a music history respectively. Athens costs more because Huntsville is spreading. And Daphne and Fairhope are the bay towns, one of which costs considerably more than the other for the same water. Whichever you pick, get an insurance quote before you make an offer if you are south of Mobile, and remember that at 65 the state stops taking property tax off you entirely.