Why This Gorgeous Beach Town is The Perfect Place for Your Retirement

For avid golfers and beach lovers who wish to enjoy their favorite fun-in-the-sun pastimes in retirement, Orange Beach, Alabama, may not be the first destination that comes to mind. It’s a small Alabama Gulf Coast town with a population of just 8,095, but don’t let the fact that you probably haven’t heard of it deter you. 

Orange Beach presents as an affluent area with beautiful amenities, but at the same time, it’s a surprisingly budget-friendly place to settle down in retirement. In fact, it even earned a place in Southern Living’s top 10 most affordable places to retire in the South. 

Many retirees have discovered this Alabama city already since Orange Beach has a median age of 51.6, and residents 65 or older comprise 28.5% of the population. Learn more about Orange Beach’s retirement-friendly perks, including no tax on Social Security…and so much golf! 

Key Takeaways

• Orange Beach has one of the lowest median housing costs in the South, contributing to an overall affordable cost of living. 
• Tax treatment in Alabama allows retirees to keep more of their income.
• The area is home to championship golf courses and white-sand beaches.

Below-Average Cost of Living

The area’s $1,279 median housing costs are just 10% higher than the $1,163 average monthly housing costs across the South overall. Though there are less expensive places to live, Orange Beach residents have a median income of $90,402, which is well above the national median of $74,580. 

Median home prices are also higher in Orange Beach than the national cost ($709,385 vs. $420,400 as of the third quarter of 2024), but remember that a handful of multimillion-dollar homes could be impacting that number. If you peruse houses for sale in Orange Beach, you can find several in the low $300,000s. In other words, if you’re retiring with a strong income, Orange Beach can still be a bargain compared to other affluent beach communities.

Warning

Rental prices in Orange Beach can be stiff, with the average median rent landing at $2,975. However, renters can find places starting at 1,500.

Why This Is Key to an Affordable Retirement

Housing is usually the largest budget line item for retirees. With a $7,533 median monthly income, it would take 17% of a retiree’s income to cover housing costs (based on the median housing cost of $1,279 in Orange Beach), which puts them in a favorable position since housing expenditures typically require about 23% of income.

Low Property Taxes

In Baldwin County, where Orange Beach is located, the county tax rate is 0.320%, which is one of the lowest in the South. In fact, Alabama’s property tax rate ranks 50th in the nation. On a home valued at $400,000, that would be $1,280 per year, just a shade over $100 per month.

Tip

Are you considering buying a property in this city? Make sure you get the best mortgage rate possible.

Why This Is Key to an Affordable Retirement

For retirees who plan to buy their home without a mortgage, it’s especially important to consider the property taxes since that is an expense you will have as long as you own a home. In some areas of the country, property taxes are significant, amounting to several thousand per year. If you’re in one of those areas and relocate to Alabama, you can immediately reap the benefits of a much lower property tax bill.

Anytime you can lower your expenses, it can help your fixed income go further.

Favorable Tax Treatment 

Alabama might not be a no-income-tax state, but its tax rate is on the lower side, and there is no tax on Social Security. The graduated individual income tax ranges from 2% to 5%, though most people will earn enough to pay the highest rate. Still, 5% is moderate compared to other areas of the country that approach or surpass double digits. 

Alabama’s average combined state and local sales tax rate of 9.29% is also one of the lowest in the nation, ranking 13th. This means the overall cost of items in Alabama may be more manageable.

Why This Is Key to an Affordable Retirement

For retirees on a fixed income, how that income is taxed can be a big factor in where they may decide to settle down. That’s why you often hear people flocking to one of the few no-income-tax states like Florida. Though Alabama has a graduated-rate income tax on most income, the state allows retirees to enjoy their Social Security free and clear of any taxes. 

The average retirement Social Security check is $1,788.12 per month. Living in a state that doesn’t tax those funds gives your budget a bit more wiggle room.

Other Surprising Perks of Orange Beach for Retirees

As the city’s slogan says, “Life Is Better Here.” This is especially true for any seniors looking for a laid-back retirement with lots of warm-weather recreation opportunities. There is something for everyone, including those who like to fish, go boating, golf, or lounge at the beach. Orange Beach, Alabama, checks all of those boxes—and it’s more affordable than many other luxury beachfront communities. 

Orange Beach offers 32 miles of white sand beaches and plenty of shopping, entertainment, and dining inland to keep active retirees busy. There always seems to be some festival or event taking place in or around Orange Beach as well, from car shows to art exhibits. It’s also a golfer’s paradise, with 14 courses in the area, including those designed by Arnold Palmer, Jerry Pate, and Earl Stone. Some of them comprise the Robert Trent Jones Golf Trail, which includes 11 championship-caliber golf courses. 

Residents also have access to good healthcare, with South Baldwin Regional Medical Center being one of the state’s top hospitals, offering emergency, diagnostic, and surgical care. 

The Bottom Line

If your ideal vision of retirement includes coastal living, sun, sand, and working on your golf game, Orange Beach, Alabama, may be worth exploring. You’ll have access to all of the typical beach town amenities but for a lower cost of living than some other popular retirement havens. 

From not having to pay taxes on Social Security benefits to one of the lowest property tax rates in the nation, your retirement income can go further in Orange Beach. And while there is a wide range of home prices in Alabama stretching into the multimillions, don’t let the high median home value figure fool you—you can certainly find homes on a lower budget. As our calculations have found, the median monthly housing costs are just slightly above the rest of the South, and you can get a lot of lifestyle value from that extra bit of investment.

Methodology

The places chosen for 2024 South’s Best Places To Retire list were selected from all Census Designated Places in southern states (Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia). Median household income and monthly housing cost estimates were collected from the 2022 American Community Survey (5-year) for each place in the South. Places for which estimates included large margins of error were removed from the initial list. 

The final list of places was selected by evaluating: 

1. Housing affordability relative to the South (how each place’s monthly housing costs compare with a weighted average for states in the South), 
2. Median income in each place (as a proxy for taxes collected which may be related to community resources; and 
3. Individual reporting on proximity to parks or coastlines, recent changes in the community, and previous reporting by Southern Living highlighting the best places to retire.