While some retirees head to warmer climates, Michigan is a beautiful place to settle down in retirement. Whether you decide to live in the Great Lakes State year-round or just in the summer, there’s no better place to be—from hundreds of miles of freshwater coastline to peaceful walking trails and historic landmarks.
But if you’re interested in retiring to Michigan, you should be aware of what it’s like—not just the climate and recreation, but also taxes, income, and healthcare facilities. At Flynn Wealth Partners, we have many clients who decide to stay in-state for at least part of the year during their retirement, so we are experts when it comes to retiring in Michigan and making the most of it.
In this blog, we’ll discuss how to plan for a successful retirement in the Great Lakes State, no matter where you decide to retire from Alpena to Zeeland!
Understanding Michigan’s Retirement Landscape
In 2023, Baby Boomers (individuals born between 1946 and 1964) make up the majority of retirees or soon-to-be retirees. Up until 2018, they were the most populous generation at 74 million. Interestingly enough, Michigan has one of the highest percentages of retirement-aged individuals.
This probably won’t change anytime soon—Michigan’s median age is trending older and life expectancy is higher than ever. This will have many ramifications for individuals retiring in Michigan and what resources are available to them like healthcare systems and pension and retirement benefits.
A practical reason retirees are attracted to Michigan is that the cost of living is 3% lower than the national average, while popular retirement states like Florida and Arizona are much higher than average. No matter what your cost of living is or what state you want to live in, it’s important to have an effective retirement plan in place.
Financial Planning for Retirement in Michigan
When it comes to retirement in Michigan—or any state—early financial planning is important so you can enjoy your spending years and build a legacy for your loved ones. In this section, we’ll break down the primary sources of retirement income in Michigan and Michigan-specific retirement savings programs and incentives.
Primary Sources of Retirement Income in Michigan
Sources of retirement income in Michigan are similar to those in other states. Your retirement income can include:
- Social Security benefits.
- Pensions.
- Personal savings (401(k), 403(b), 457(b), or IRA).
- Annuities.
- CDs.
- Payouts from business sales.
- And more.
What is different in Michigan is how this income is taxed. We will discuss this later in the blog.
Michigan-Specific Retirement Savings Programs and Incentives
Michigan has a few state-specific retirement savings programs and incentives that you may be enrolled in depending on your employment history, including the Michigan Public School Employees Retirement System (MPSERS), in which a member’s annual pension will increase each year.
The Great Lakes State is tax-friendly when it comes to retirement income. Social Security benefits are not taxed and the state provides deductions on multiple types of retirement income. In fact, Michigan will continue to roll back taxes on retirees in the coming years, which will mean lower income tax for most retirees (depending on your age and income level.) Talk to a financial advisor about these tax changes to find out how you can maximize your retirement earnings.
Tax Credits for Michigan Seniors
As you plan for your retirement in Michigan, talk with your financial advisor about potential tax credits that are available for Michigan seniors. These tax credits can include the homestead property tax credit, renter’s tax credit, and home heating tax credit.
Healthcare Considerations in Retirement
The average couple retiring in 2023 will need over $300,000 to cover healthcare expenses, not including potential long-term care. If you aren’t prepared, healthcare costs can take a toll on your hard-earned savings. Having a plan for covering these costs in retirement is vital for every retiree—for both the expected costs like routine doctor visits and unexpected ones like hospital visits or surgeries.
Medicare in Michigan
Medicare is available to Michigan residents over 65. Medicare in Michigan offers coverage in two main parts: Part A (inpatient hospital stays) and Part B (doctor and outpatient services). Retirees automatically become eligible for Part A at the age of 65, while Part B can be purchased separately. Other supplemental Medicare plans include Medicare Advantage (which includes both Part A and Part B) and prescription drug coverage through Medicare Part D. Medicare open enrollment begins every October for Michigan residents.
Long-term Care Options for Retiring in Michigan
Outside of Medicare, Michigan retirees have other care options that can ensure peace of mind when they no longer have employer benefits. While you enjoy retirement, it’s important to keep the future in mind and have a plan in place for when you or your spouse might need long-term care, either in your home or in an assisted living facility. Here are some things to know about long-term care and insurance in Michigan.
Long-term Care Costs in Michigan
In 2022, annual long term care costs in Michigan were as follows:
- In-home care: $63,504
- Assisted living facilities: $53,652
- Nursing homes: $114,361
If you’re not prepared, long-term care could be costly for you and your family. When you explore your options for long-term care insurance, you’ll be better equipped to care for yourself, your spouse, and your loved ones when the time comes.
Should You Purchase Long-term Care Insurance?
Long-term care insurance is not for everyone. The premiums can be high, and if you or your spouse already have serious medical conditions, this may increase the premium. However, if you have a steady source of income in retirement (beyond Social Security benefits), don’t want to spend most of your resources on long-term care, and want to choose where you receive care, you should explore long-term care insurance options.
Choosing the Right Location and Lifestyle
Did you know that many out-of-staters move to Michigan for retirement? It’s true! Michigan is only behind Florida and North Carolina in its amount of out-of-state retirees. While the cost of living is a major draw for seniors moving here, there are so many other reasons retirees love Michigan. Whether you love the cold winters or run from them, Michigan features so many unique communities and destinations for year-round residents and snowbirds alike. Here are just a few popular retirement destinations for Michigan residents.
Petoskey
Located in the heart of Northern Michigan, Petoskey is a city for nature lovers. With year-round recreation like hiking, snowmobiling, fishing, skiing, and more, it’s a great place for active retirees to relax and enjoy the outdoors no matter the season. Petoskey is just a few miles from Charlevoix Township and other popular cities like Traverse City and Mackinac City and has easy access to Lake Michigan.
Kalamazoo
Kalamazoo is a lively town with big-city energy and vibrant culture. For retirees who want an active community, bustling arts, and youthful neighbors, there’s no better place! There are six colleges total in the city, so Kalamazoo may not be the best place for a quiet retirement but is a great city for seniors to volunteer, visit galleries and museums, and invest in a thriving community.
Grand Haven
If the lake life is calling you, you might want to retire to Grand Haven. It’s a great blend of peaceful nature and a thriving beach town. Retirees can enjoy year-round entertainment, waterfront festivals like the Coast Guard Festival, excellent dining options, and some of the country’s most pristine beaches.
Grand Rapids
Only a short drive inland from the lakeshore is Grand Rapids, the second-largest city in Michigan. Here, you’ll find all the culture and energy of a much larger metropolis while still within miles of beautiful beaches and peaceful walking trails. Grand Rapids holds several annual festivals throughout the year. It’s an excellent destination for retirees who want to be close to everything and want to invest in the culture of a growing city.
Ann Arbor
For lovers of art and culture, there’s no better place to retire than Ann Arbor. While it’s home to the University of Michigan and thousands of college students, it’s also close to many outdoor activities and excellent arts and culture events presented by the university. The University of Michigan also boasts a large medical complex that spans the state of Michigan.
Frankenmuth
Quaint quality of life abounds in the tiny town of Frankenmuth, located just south of Bay City. A popular tourist destination with only 5000 year-round residents, “Little Bavaria” hosts several German-themed festivals yearly and is home to Bronner’s, the famous year-round Christmas store.
Lansing
Located in the heart of the state, Lansing is Michigan’s capital and home to vibrant arts, entertainment, history, and culture—and of course, the sprawling, beautiful campus of Michigan State University. From taking in a Broadway show at the Wharton Center to enjoying the beauty of the Cooley Gardens or cheering on the Spartans in the fall, Lansing is the beating heart of Michigan and the place to be for active seniors.
Where Should You Retire in Michigan?
With so many destinations in Michigan to choose from, how do you know which one will be best for you? Looking at three different factors can help you determine where you should retire:
- Your hobbies. Choose a place to land based on your hobbies. Cities like Petoskey and Grand Haven are ideal for watersports, while Grand Rapids and Kalamazoo are great for social events. You’ll want to consider your proximity to the things you enjoy doing. If you enjoy playing tennis or basketball, is there a nearby community park or rec center? If you attend church, is there one within your denomination nearby?
- Your family. If you have family that live in Michigan, you might consider how close you want to be to them. If you want to be within a few minutes’ drive of your kids and grandkids, you’ll have different options than if you don’t mind longer distances.
- Your budget. Not every Michigan city is friendly for every budget. For example, Petoskey has a much higher cost of living than Grand Rapids. If you want to maintain a certain quality of life, you might have to evaluate each city you’re interested in based on home prices and property taxes.
Enjoying Retirement in Michigan
No matter where you settle in Michigan, it’s no secret that you’ll find plenty to do wherever you go. Michigan has rich history, beautiful landscapes, and vibrant culture on both pleasant peninsulas. Michigan makes it easy to stay active in retirement! Below are some popular Michigan retirement activities you can enjoy with your family, your spouse, or on your own.
Hiking
Michigan is home to some of the best hiking in the country, suitable for beginners and experts alike. Take in the scenery on a flat bike ride or hike down the Fred Meijer White Pine Trail or challenge yourself with a trek through the Porcupine Mountains. Whatever views you’re looking for, you’ll find year-round trails across the Great Lakes State. You’ll even find urban walking trails through the city of Detroit, showcasing eclectic street art and mural paintings.
Golf
Michigan is home to hundreds of award-winning fairways that have been played by professionals from around the world. From Wuskowhan near the shores of Lake Michigan—an exclusive player’s club coveted by pros—to the picturesque Belvedere in Charlevoix, you’ll find courses for every skill level and every occasion.
Boating and Watersports
True Michigan residents know that summer is for boating, fishing, and spending time on the water. Beyond Michigan’s five great lakes, the state also features over 62,000 inland lakes of varying sizes, perfect for fall kayak trips or even ice fishing. Active retirees can enjoy a number of scenic paddling trips in the Great Lakes or through peaceful rivers, while boaters can enjoy a day on the water in popular lakes like Torch, Macatawa, and Leelanau.
Culture and Recreation
Not all retirees are outdoor enthusiasts. Some would much sooner go out on the town and take in a Broadway musical at the local theatre, listen to a symphony concert, or peruse an art gallery. Michigan is home to award-winning symphony orchestras, some of the largest community theatres in the country, and art and architecture by world-renowned artists.
Museums
Michigan residents love art, architecture, and industry. In every major city, you’ll find art institutes, history museums, and festivals celebrating local artists and creators. A few examples include:
- The Meyer May house in Grand Rapids’ Heritage Hill Historic District, one of the largest historic neighborhoods in the country.
- The Detroit Institute of Arts, one of the largest art collections in the US.
- The University of Michigan Museum of Art, a former Civil War memorial that became a 94,000-square-foot museum in the 1940s.
- Frederik Meijer Gardens and Sculpture Park, an indoor and outdoor variety of gardens, greenhouses, and sculptures—with a conservatory of butterflies that bloom every spring.
Theatre and Performing Arts
Whether you want to take in a show straight from Broadway or a stunning orchestra performance, Michigan boasts diverse performing arts venues across the state, including:
- DeVos Performance Hall, which hosts local symphony performances and famous touring artists.
- The Detroit Opera House, home to Michigan’s premier opera company and a performance venue for other plays, concerts, and touring productions.
- The Calumet Theatre which hosts over 70 performances per year and also has guided tours throughout the historic building.
- The Michigan Theatre in Ann Arbor which features both live entertainment and current and classic film screenings—with one of the country’s only remaining theater pipe organs.
- The Wharton Center on Michigan State University’s campus is a modern performing arts center that hosts touring Broadway productions, world-class musicians, stunning ballets, and more.
Staying Active and Engaged During Your Michigan Retirement
No matter where you’re interested in retiring in Michigan, it’s important to stay active and engaged with your community as much as you’re able. After all, retirement is your time to do the things you enjoy, like taking a long autumn hike or enjoying an outdoor concert with your spouse. And with over 23,000 nonprofits in Michigan, search out ways to give back to your community. Here are just a few ways you could get involved in your community and do the things you love:
- Tell children’s stories at the library.
- Help tend and harvest a community garden.
- Sing in a community chorus or church choir.
- Play in a community band or orchestra.
- Feed or brush the dogs at an animal shelter.
- Mow lawns or weed gardens for non-profits or area parks.
- Cuddle babies at the NICU.
- Tutor or mentor a kid or teen.
- Usher people to their seats at a local performing arts event.
- Paint or repair houses for low-income families.
Retiring In Michigan is Enjoyable and Fulfilling
In this article, we highlighted what makes retiring in Michigan unique—from savings programs you should be aware of to key attractions you can visit and enjoy. Life couldn’t be better in the Great Lakes State—it’s a great place to spend time with family, enjoy the lakeshore, and live a fulfilling life after your working years.
At Flynn Wealth Partners, we’ve helped Michigan residents retire for over 30 years. Our clients have included employees at some of Michigan’s largest employers like Consumers Energy and Michigan State University—so we know our state pretty well by now. We’ll help you and your family navigate the challenges and opportunities of retirement in Michigan and create a plan to pursue the fulfilling retirement you’ve always wanted. Give us a call today to regain your confidence in your retirement goals!
