Retirement-Destination Counties

The presence (or absence) of natural amenities is becoming increasingly important to the economic well-being of rural areas. With such amenities as a mild climate, mountains, coastlines, and lakes, a rural area can attract retirees, tourists, and recreationists, as well as some firms and self-employed professionals who place a high value on the quality of living offered by these amenities. In turn, the economic activities--particularly services--that these people and firms generate are becoming increasingly important sources of employment and income.

Examined here are "retirement-destination counties," counties mainly in the South and West that experienced 15 percent or more inmigration of people age 60 and older in the 1980s. These counties are generally more rural than other nonmetro counties. In addition to being located near amenities, these counties also tend to be near military bases, reflecting the desire of military retirees to be near medical and shopping facilities located on the bases.

Along with natural amenities, several other factors have contributed to the increased migration to these areas: improved health of older people, earlier retirement ages, higher retirement incomes, some preference for smaller communities, and improvements in transportation and communications.

Map: Natural amenities, such as a mild climate, mountains, and seashores, draw tourists and recreationists, as well as retirees, to retirement-destination counties.

While generally viewed as a positive development for rural areas, the influx of retirees and other inmigrants is not problem free. Increased demand for infrastructure (roads, water and sewer service, etc.) and social services, change in local cultural values, and escalation of property values and housing costs are among some of the factors associated with the trend that can be troublesome to long-time residents.

Economically, these counties did very well during the 1980s. As a group, they had the highest rate of earnings growth (26 percent) and job growth (34 percent) of any nonmetro county type. In fact, nearly all the retirement counties had job growth.

The job growth rate is explained, in part, by rapid growth in services, government, and construction jobs in these counties. Nearly three-fifths of the jobs in the retirement counties are in the services sector. Due in part, however, to the dominance of services sector jobs (even though some of them may be in higher paying services), earnings per job are slightly lower in retirement counties than in nonmetro counties as a group.

Chart: Earnings per job in retirement counties were about 5 percent less than in nonmetro counties as a group.

Chart: However, job growth in retirement counties exceeded even the metro rate; growth in services jobs in retirement counties was even greater.

Population grew an average of 23 percent in these counties in the 1980s, far exceeding the 0.6 percent nonmetro average. The number of people age 65 and over grew by 45 percent. The size of the younger population grew as well, in part because of job growth in recreation and tourism and in services catering to the needs of retirees.

Management of a growing population and the pressure it puts on infrastructure and public services, property values, housing costs, and community composition and values, as well as the pressure put on the natural amenities that serve as the drawing card, will be a major challenge for retirement counties. The prevalence of low-skill, low-wage jobs may not adequately provide for the needs of workers, especially if an influx of wealthier retirees drives up demand (and prices) for housing and other essentials.

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Updated: February 11, 1997