How is Colorado for retirement?

Learn how Colorado is for retirement, the pros and cons of retiring in the state, and the best places for retirement.

5 min read

Colorado has become an increasingly popular retirement destination due to its stunning natural environment, big city amenities, and beautiful outdoors. While it might not be as popular as Florida for retirement, there are various reasons why more seniors are moving into Colorado every year.

Colorado is a good state to retire due to the favorable taxes, excellent healthcare, and the presence of outdoor recreation opportunities. The state is moderately tax-friendly, and you get a tax deduction of at least $20,000 per year if you are age 55 to 64, or $24,000 per year if you are age 65 or older. If your total retirement income is below the allowed deduction, you won't owe any state income taxes.

Is Colorado tax-friendly for retirement?

Colorado is a moderately tax-friendly state for retirees, and it is one of the states that tax Social Security benefits. The state allows a deduction of $20,000 per year for individuals aged 55 to 64 and $24,000 for individuals aged 65 or older. For married couples, each person can claim the deduction in their tax filing.

The tax deduction applies to retirement incomes from Social Security, pensions, and distributions from 401(k), IRA, and other retirement plans. For example, if you are age 67, and you receive $30,000 from Social Security and pensions, you will only pay income taxes on $6,000 ($30,000-$24,000). The $6,000 is added to other incomes that you have, including salaries and wages, and taxed at the state income tax rate.

Additionally, Colorado has one of the lowest sales taxes in the United States at 2.9%. However, municipalities levy their own sales taxes, which can increase the overall sales tax rate. The average total sales tax rate is 7.77%. However, items such as groceries and prescription medicine are exempted from the state sales taxes.

How much are property taxes in Colorado?

Colorado has one of the lowest property tax rates in the United States. The average effective property tax rate is 0.48%, and the average Colorado homeowner pays about $2,260 in property taxes per year. However, if you are age 65 or older, you may be eligible for the Colorado senior property tax exemption.

The tax exemption is available to seniors who own a home in Colorado. You must have occupied the house as the principal residence for 10 or more consecutive years. The property tax exemption applies to 50% of the first $200,000 of the property value. For example, if your property is worth $180,000, 50% of this home value i.e. $90,000 will be exempt from property tax. If the property value exceeds $200,000, only $100,000 will be exempt from property taxes.

Pros of retiring in Colorado

Good climate

Most states feature one or two seasons in a year, but Colorado is one of the states that experiences all four seasons. Most areas in the state have low humidity and plenty of sunshine, and you can expect about 300 days of sunshine every year. With an average annual temperature of 43.7 degrees, the consistent temperatures and drier conditions can ease symptoms of various chronic conditions like arthritis. You can also experience the outdoors nearly year-round. 

High-quality medical care

Colorado ranks among the best states for healthcare. It has some of the highest-quality medical care facilities, and most of the population is close to good health care. There are more than 100 hospitals in the state, and the state has its own Medicaid program for people who need assistance with medical care expenses.

Scenic views

Colorado is full of beautiful scenery, and it has some of the most beautiful countrysides in the United States- from the gorgeous sunsets, rolling plans, majestic mountains, crystal clear lakes, blue skies, and gigantic sand dunes, there is always something to wake up to. Additionally, since you are surrounded by opportunities for fitness, you can choose to take a dip in the water, hike the hills and mountains, or even go fishing.

Outdoor recreation opportunities

With the mild climate and beautiful scenery, there is a chance you will spend most of the time outdoors. Whether you enjoy skiing in the winter, hiking in the summer, biking in the protected forests, or exploring the thousands of acres of national parks, you will have plenty of room to play and bask in the sun. Some of the national parks you can visit include the Rocky Mountain National Park, Great Sand Dunes, Black Canyon of the Gunnison, and Mesa Verde.

Great retirement communities all over

Since 2010, Colorado has seen a jump in the number of seniors retiring in the state. The state has more than 240 retirement communities spread across the state, and this makes it easy for seniors to socialize and create friendships with people who share similar interests.

Craft beer

Colorado has more than 200 craft breweries and more than 100 commercial wineries. Whether you are a beer or wine enthusiast, you will have plenty to explore in the thriving craft beer scene. Also, the state is home to some of the best restaurants, where you can find local and traditional cuisines.  

Cons of retiring in Colorado

Beware of the wildlife

When you retire in Colorado, you can expect to see various types of animals, including deer, moose, and wolves. However, some of the wildlife can be dangerous, and you should be aware of how to how to handle the wildlife and protect yourself from animal attacks. Some of the dangerous animals you should be aware of include mountain lions, coyotes, bears, moose, and snakes.

Severe weather

Even with the many sunny days in Colorado, you can expect severe weather in part of the state. The winters can be snowy, while the summers can become too hot and trigger wildfires. You should also watch out for high winds and hail storms.

High cost of living

Depending on where you retire in Colorado, you can expect to pay more for some goods and services. In popular cities like Denver and Boulder, you can expect to pay more for housing, transport, and groceries. However, you can expect to pay a subsidized cost for healthcare and utilities.

High altitude

If you experience altitude sickness, you should be aware of what to expect in Colorado before committing to a move. The whole of Colorado lies at least 2,000 feet above the sea level, and some areas are higher than that. If you have a health condition that is affected by high altitudes, you may want to know how the high altitude could affect your quality of life.

Best places to retire in Colorado


If you desire retirement in a small city surrounded by nature, Monument stands out. The city offers a small city lifestyle with big city amenities such as medical facilities, a vibrant downtown, good public transport, and easy access to major attractions. The city provides good access to healthcare, with more than 4.3 healthcare facilities per 1,000 people. You will also find plenty of places to explore, including the 15-mile Santa Fe Regional Trail, which runs through the city.

Fort Collins

Fort Collins offers retirees a mix of urban and rural lifestyles. It lies only a few hours north of Denver, but you will still find all the infrastructure that a large city can offer, including high-quality medical care, public transportation, a library, and countless trails.

Fort Collins is also a popular university town, and it is home to Colorado State University which has more than 30,000 students. Local attractions include the Rocky Mountain National Park, Fort Collins Museum of Discovery, and the Museum of Art. You will also find many shopping and dining options in Fort Collins.


Evergreen lies just 30 miles from Denver, and 40 miles from Boulder, at the foot of the Rocky Mountain. This city offers a typical Colorado lifestyle, and you can easily go hiking in the mountains, kayaking, fishing, and much more. However, the average cost of living in Evergreen is higher than the rest of Colorado, with the average income standing at $80,000. However, if you have saved enough for your retirement, the cost of living won’t be a problem.


Golden is often ranked among the best places to retire in America, not just in Colorado. The city was established in the 19th century during the gold rush, and it has managed to preserve this charm. This city is about 30 minutes away from Denver and Boulder, and it gives you easy access to the big city amenities. Key attractions in Golden include the Clear Creek Whitewater Park, Colorado Railroad Museum, and the Colorado School of Mines Geology Museum.

Estes Park

If you want to immerse yourself in nature and enjoy privacy, you will love living in Estes Park. As the gateway to Rocky Mountain National Park, you will have a lot to do. You can get easy access to hiking trails, scenic mountain views, and day trip excursions. More than 30% of the city is comprised of seniors, and you will find it easy to create friendships with your age mates.