11 of the Best Places to Retire on an Island

Spending time on the beach is not just for vacations.

If access to blue waters and sandy beaches are on your must-have list, take a look at the following island destinations when planning your retirement.

Here are a few reasons to consider some of the best island-based towns in the United States.

Galveston, Texas

Location: The city of Galveston is on a barrier island of the same name, located in Galveston Bay, which leads to the Gulf of Mexico.

Estimated population: 53,000 as of 2022

Share of the population age 65 and older: 19%

With the subtropical feel of a resort town and the charm of historic Victorian homes amid more modern ones, Galveston is already known as a popular destination for snowbirds. But there’s plenty to recommend “The Republic of Galveston Island” year-round, says Galveston.com, because the city “is so unlike the rest of Texas.”

For starters, there’s The Moody Gardens, with pyramids full of rainforest creatures, aquatic life ranging from penguins to sharks, a water park, a golf course, a paddle wheel boat modeled after those of the 1800s and a year-round calendar of educational and entertaining events.

If you prefer to get away from the hustle and bustle, there’s also more than 2,000 acres of beaches, wetlands, hiking paths and more in Galveston Island State Park.

Either way, you’ll avoid state income taxes on your retirement income, as Texas is among the few states that don’t have an income tax.

Kodiak, Alaska

Location: The city of Kodiak is located on an island of the same name — which happens to be the second-largest island in the U.S. — in the Pacific Ocean’s Gulf of Alaska.

Estimated population: 5,400 as of 2022

Share of the population age 65 and older: 16%

Let’s get it out of the way: Kodiak can get very cold, as low as 20 degrees below zero Fahrenheit in the winter. But it’s not the inhospitable arctic place you might be thinking of. The average January low is about 26 degrees — warmer than the national average. And summers are mild, with an average July high of around 60 degrees.

It’s a quiet place for those who enjoy nature and related activities, including hiking, kayaking, fishing, birding, camping and hunting. Much of the island that Kodiak sits on is a national wildlife refuge for 3,500 brown bears. “Here, Kodiak brown bears gorge on salmon and mountains rise 4,000 feet from craggy coastlines, misty fiords, and deep glacial valleys,” says the U.S. Fish and Wildlife Service.

Plus, Alaska is among the states that don’t levy state income taxes. Retirees here also get an income boost from the state’s Permanent Fund Dividend program.

Fernandina Beach, Florida

Location: The city of Fernandina Beach is located on Amelia Island, a barrier island off the Atlantic coast of northern Florida.

Estimated population: 13,000 as of 2022

Share of the population age 65 and older: 36%

For low-key living without the risk of snow, consider this city outside of Jacksonville. It’s known for an annual shrimp festival and an antique car show, as well as one of the most well-preserved 19th-century forts in the U.S.

More than one-third of Fernandina Beach’s population is age 65 or older — nearly double the national rate of about 17%, according to the U.S. Census Bureau.

Florida does not have a state income tax, but that doesn’t mean Fernandina Beach is a cheap place to live. Perhaps the city’s biggest downside is a cost of living that’s about 10% higher than the national average.

St. Croix, U.S. Virgin Islands

Location: St. Croix is the largest of the islands comprising the U.S. Virgin Islands territory in the Caribbean Sea.

Estimated population: 41,000 as of 2020

Share of the population age 65 and older: 15%

If you’re tired of the cold, shorter days of winter, consider the consistency of St. Croix. There’s only about an hour’s worth of difference in the number of hours of daylight per day between summer and winter. Temperatures hover around 80 degrees Fahrenheit, and stay between the low 70s and high 80s year-round.

If that’s not convincing enough in itself, you have full access (all the beaches are public) to the beaches and water activities that people come from around the world to enjoy. It’s a scuba-diving and snorkeling paradise, among many other things.

Dauphin Island, Alabama

Location: The town of Dauphin Island is on a Gulf Coast island of the same name, near Mobile, Alabama.

Estimated population: 1,800 as of 2020

Share of the population age 65 and older: 36%

The self-proclaimed “Sunset Capital of Alabama” boasts small-town Southern charm, “miles of uncrowded, pristine beaches, excellent fishing and a historic, storied past.” It’s also home to Dauphin Island Audubon Bird Sanctuary.

Dauphin Island, and Alabama in general, also offer retirees a low cost of living — about 16% less than the national average. The median home cost in Dauphin Island is significantly higher than that of the state as a whole — a common downside of island living — but Alabama has one of the lowest effective real-estate property tax rates in the country.

Bainbridge Island, Washington

Location: The city of Bainbridge Island is on an island of the same name in Puget Sound — with a view of Seattle — off the Pacific Ocean.

Estimated population: 24,000 as of 2022

Share of the population age 65 and older: 27%

Accessible by bridge and ferry, Bainbridge Island is a quiet refuge from fast-paced and densely populated Seattle. Instead, it has densely forested hills with “a wonderful combination of farms, wineries, hiking trails, scenic vistas, and local arts.” It has 53 miles of shoreline and manages to squeeze quite a few parks, museums and gardens into its 27 square miles.

The climate is similar to San Francisco’s, with summer temperatures in the mid-60s and winter temps in the 40s. More than one-quarter of its residents are age 65 or older, significantly higher than relatively youthful Seattle’s rate.

Washington is also among the handful of states that don’t have an income tax.

Hilton Head Island, South Carolina

Location: The town of Hilton Head Island is on a barrier island of the same name, between mainland South Carolina and the Atlantic Ocean.

Estimated population: 38,000 as of 2022

Share of the population age 65 and older: 39%

Hilton Head Island, also known as simply Hilton Head, boasts more than 12 miles of beaches, golf courses galore and outdoor water activities like dolphin tours.

The beauty of the island remains unspoiled from when William Hilton’s ship first came to its shore 350 years ago. It has been a resort community longer than it has been an incorporated town, but many people now call it home.

An added bonus is the possibility of a great social life, with a substantial portion of the population age 65 or older. Plus, South Carolina does not tax Social Security benefits and offers other state tax deductions to retirees.

Hilo, Hawaii

Location: Hilo, which is technically classified as a census-designated place rather than a town or city, is located on the “Big Island” of Hawaii, the largest island in the Pacific Ocean chain.

Estimated population: 44,000 as of 2020

Share of the population age 65 and older: 23%

If you’re looking to retire on an island where you can hike through a rainforest, walk on volcanoes or surf the ocean at a crescent-shaped bay, look no further than Hilo.

Explore the stars at Hawaii’s only planetarium, Imiloa. View the boiling pools and Rainbow Falls at Wailuku River State Park or the largest Japanese garden outside of Japan.

Music to the ears of anyone looking to buy a home in Hilo: Hawaii has among the lowest effective real-estate property tax rates in the nation.

Mackinac Island, Michigan

Location: The city of Mackinac Island is on an island of the same name in Lake Huron.

Estimated population: 11,000 as of 2022 (includes all of Mackinac County)

Share of the population age 65 and older: 30%

If retiring to a laidback resort-like island (minus the tropical climate) sounds attractive to you, consider the city of Mackinac Island.

You’ll find plenty of outdoor activities, as Mackinac Island State Park comprises more than 80% of the island, and an 8-mile bicycle trail traces the entire shoreline. What you won’t find are cars: They aren’t allowed. Horse-drawn carriage rides and bicycles are an option, though.

If you make Mackinac Island your retirement home year-round, you’ll become part of a small community, as only about 500 people live here year-round.

Another consideration for retirees is Michigan’s favorable tax treatment of retirement income. There is no state tax on Social Security income and only partial taxation of other forms of retirement income.

Friday Harbor, Washington

Location: The town of Friday Harbor is on San Juan Island, in Puget Sound, which leads to the Pacific Ocean.

Estimated population: 19,000 as of 2022 (includes all of San Juan County)

Share of the population age 65 and older: 36%

For those who don’t mind cooler weather, Friday Harbor or another town in the San Juan Islands chain might be worth considering as a retirement destination.

Living anywhere in the archipelago means your retirement income will not be subject to any state income taxes, as Washington is one of the few states with no income tax.

Friday Harbor, located on the second-largest of the 172 islands in the chain, boasts walkability. Cars are allowed but unnecessary, according to the San Juan Islands Visitors Bureau: “Everything is within walking distance of the ferry landing, and it is easy to get around, including shuttle buses and a trolley to take you around the island, as well as bike, three-wheeled Scootcoupe, and moped rentals.”

Some of the activities you will find include kayaking, whale watching and multiple museums. From Friday Harbor you can also catch an inter-island ferry to Lopez, Orcas and Shaw Islands.

On the downside, the cost of living in Friday Harbor is considerably higher than the national average.

Sanibel, Florida

Location: The city of Sanibel is on a barrier island of the same name, between mainland Florida and the Gulf of Mexico.

Estimated population: 6,500 as of 2022

Share of the population age 65 and older: 64%

With its own national wildlife refuge and some of the most beautiful beaches in the country, Sanibel Island is a favorite place for retirees. A majority of the population is age 65 or older.

There are plenty of biking and hiking trails, not to mention white sandy beaches to enjoy The cost of living is a bit higher than the national average, but Florida has no state income taxes.

Housing can be prohibitively expensive in this island paradise, however, and the hurricane risk will deter some retirees from settling here.