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Retirement Planning: An Online Guide
Introduction

There is no downside to starting to save early in life for retirement, but most people don't understand how to invest wisely at any age, never mind starting in your 20s or 30s. The reason for that is simple: Disinterest. Distraction. Life always intrudes in one unexpected way or another, and this is particularly true when youíre young, or at the peak of your earning power, and concerned more about the here-and-now, and not the future.

But you can begin investing at a very early age, and not forgo your lifestyle when you are in your 20s or 30s; you just have to be smart about it. And later on, even when youíre in your middle age earning years, married, buying a home, it pays to save if you can. Adopting a long-term plan and investing consistently over a long period of time will ensure that your savings and net worth are there when you need them.

source: http://www.dol.gov/ebsa/images/top10ways2.jpg

Not everyone can save $5,000 a year, as the graph above uses as an example, but the overall point is the compounding interest. The IRS has set limits on what you are allowed to contribute for retirement accounts in the taxable year 2014. So within those parameters, put away what you can. Now. And watch it grow.

Itís Never too Early (or Late) to Start Planning for Retirement

Today's successful retirement strategy involves a variety of financial tools, with different risk and return qualities, to satisfy different objectives.

As we have said, there is never a time when it is not to your advantage to save for your retirement, whether starting very early in life or later in life, when you are nearing or already at retirement age. You can even save money when you are already a senior. What changes over time are your strategies and tactics. Certainly, successful retirement strategies involve a variety of financial tools, with different risk and return qualities, to satisfy different objectives.

And that is what this mini course is all about. Offering you options to help reach your objectives; to help you succeed and generate as much as you can for those years when you might be living on a fixed income, or, when you just want enough income to enjoy life and not worry about paying the bills.

Whatever your age or occupation, a good way to start is by analyzing where you stand financially now and to know your hopes and dreams: how you eventually want to live in retirement. An excellent tool is the "ballpark estimate" calculator for a glimpse into your future. Based on your current savings and income, the calculator will tell you if you are likely to build up enough money in your nest egg to replace 70 to 80 percent of the money you were used to living on during the year before you retired (That 70-80 percent number is generally considered the amount of your annual earnings you currently live on.) And if your savings, Social Security and any guaranteed pension money in a "defined benefit plan" will fall short of delivering what you will need, the calculator will tell you how much more to save each year to get to where you want to be.

What follows are tips to follow at any stage of your life.

The Stages of your life

Although everyoneís attitude toward investing and money is different, most investors share some common situations throughout their lives. For instance, where you are in your life cycle certainly affects how you invest for retirement, but what about other life stages that arenít so closely related to age? Letís look at both.

Letís say for example that youíre 40 and expecting your first child. Youíll need to decide how to balance your finances to account for the additional expenses of a child. Perhaps youíll need to supplement your income with income-producing investments. Moreover, your child will be entering college at about the time youíre ready to retire! In these circumstances, your growth and income needs will change, and maybe your risk tolerance as well.

The following are some major life events that most of us share, and some investment decisions that you may want to consider:

  • When you get your first job

    • Start a savings account to build a cash reserve. Starting early is one of the best ways to save for retirement. Take advantage of any workplace retirement plans you can and make sure to contribute enough to receive matching contributions. This is one of the few places you will get a 100% return on your ďmatchedĒ investment. Donít have a workplace savings account? ThenÖ
    • Start a retirement fund and make regular monthly contributions, no matter how small.
  • When you get a raise

    • Increase your contribution to your company-sponsored retirement plan.
    • Invest after-tax dollars in municipal bonds that offer tax-exempt interest.
    • Increase your cash reserves.
  • When you get married

    • Determine your new investment contributions and allocations, taking into account your combined income and expenses.
  • When you want to buy your first house

    • Invest some of your non-retirement savings in a short-term investment specifically for funding your down payment, closing, and moving costs.
  • When you have a baby

    • Increase your cash reserves.
    • Increase your life insurance.
    • Start a college fund.
  • When you change jobs

    • Review your investment strategy and asset allocation to accommodate a new salary and a different benefits package.
    • Consider your distribution options for your companyís retirement savings or pension plan. You may want to roll over money into a new plan or IRA.
  • When all your children have moved out of the house

    • Boost your retirement savings contributions.
Financial strategies by age

If one can generalize at all then here are some suggested tactics by your age:

  • Saving In Your 20ís

    • Plan for how much you will need to save with a tool like the Ballpark Estimate
    • As your salary increases, consider try to gradually increase the percentage you contribute toward retirement.
    • Consider expanding your retirement portfolio to include at work or outside of work savings options.
  • Saving In Your 30ís

    • Plan for how much you will need to save with the tool.
    • As your salary increases, consider gradually increasing the percentage you contribute toward your retirement.
    • Consider expanding your retirement portfolio to include at work or outside of work savings options.
  • Saving In Your 40ís

    • Calculate how much you will need to save for retirement. According to EBRI nearly half of workers age 45 and older have not tried to calculate how much money they will need to save so that they can live comfortably in retirement.
    • Pay off as much debt as you can.
    • Consider increasing retirement contributions.
    • Address any life changes that could impact your retirement plan.
  • Saving In Your 50ís

    • Once you turn 50 or older, you can take advantage of what Bank Rate calls catch-up contributions, where you to contribute extra money to your retirement plans. For company-sponsored 403(b) and 401(k) plans, you can contribute an extra $5,500 on top of the $16,500 allowed for everyone -- for a total of $22,000. For an IRA or Roth IRA, it's an extra $1,000 per year on top of the $5,000 contribution limit for everyone. This is absolutely important if you didn't save enough money during the Great Recession of 2008, when we were all younger. Catch-up contributions enable you to save more at a later life stage, even if you can't totally get caught up to where you might have been had you started saving earlier.\Review your accounts to learn when and how you can withdraw money from your accounts, and make sure you are on target with your savings to last your through retirement.
    • Estimate, using the social securityís benefit calculator how much you will receive from Social Security and determine the age you should apply for Social Security benefits. You can do that all on the SS calculator page. Itís a nifty research tool you can use.
    • Review your retirement fund asset allocation to accommodate the shorter time frame for your investments.
    • Donít stop saving for retirement.
  • When you retire: Saving in Your 60s

    • Waiting a few years can add up to greater payouts from Social Security. Decide when you should start receiving social security benefits.
    • Carefully study the options you may have for taking money from your company retirement plan. Discuss your alternatives with your financial advisor.
    • Review your combined potential income after retirement and reallocate your investments to provide the income you need while still providing for some growth in capital to help beat inflation and fund your later years.
Instruments of Wealth

All investing involves a certain amount of risk. How well you tolerate price fluctuations in your investments will need to be balanced against your required rate of return in determining the amount of risk your investments should carry. An offsetting factor to risk is time. If you plan to hold an investment for a long time, you will probably tolerate more risk because you have the time to make up any losses you may experience early on. For a shorter-term investment, such as saving to buy a house, you probably want to take on less risk and have more liquidity in your investments.

Here are some of the most popular long term investment vehicles:

  • 401(k)

    A 401K is a retirement plan offered by some companies to its employees.. It allows you to invest on a tax defered basis (meaning you don't have to pay taxes on any of the money you put into the plan until you withdraw it; always a good thing). Some companies will even match at least part of the amount that you contribute to the plan.

    Young investors might consider putting their 401(k) contributions into an index fund, which is an investment product consisting of many stocks bundled into one neat package, designed to mimic the performance of a major stock index such as the S&P 500. If you take this option, understand that you will take home a smaller paycheck, because your contributions are deducted directly from your pretax pay. However, you probably won't miss the money as much as you might think; because the contributions are made pretax, most young professionals (who are in the 25 percent federal tax bracket) will only take home $75 less for every $100 they contribute to a 401(k).

    In exchange for this small sacrifice in current pay, you'll experience several important benefits. Besides the immediate tax savings, you'll also experience tax deferral of all earnings and gains that you make. Also, as long as you invest part of your money in low-risk investments, you can contribute liberally to your plan without worrying about keeping too much money outside of it for emergencies, since it's possible to take a penalty-free loan from your 401 (k). Most people donít know that. For the list of allowable loans, go to a very clear explanation here.

    Finally, if you decide to leave your current job, you won't lose what you've invested - you can convert your 401(k) into an IRA through what is known as a rollover. It is important to note that the quality of your investment options can vary depending on your employer. Also, not all companies offer 401(k)s and, contrary to popular belief, the ones that do are not required to offer an employee-matching program.

    A Solo 401k or self-employed 401k is a plan designed especially for them. The ďone-participant 401(k) planĒ is not a new type of plan. It is a traditional 401(k) plan covering only one employee. The plans have the same rules and requirements as any other 401(k) plan.

  • 403(b)

    Itía like A 401 (k), but different, in who can take it. A 403 (b) plan is offered to certain educators, public employees and nonprofit employees. Like a 401(k), what you contribute is deducted from your paycheck and will grow on a tax-deferred basis; you can roll it all over into an IRA if you change employers. Most 403(b)s will allow you to invest in mutual funds, but others can limit you to annuities. Some will allow you take loans out against the plan, but this option can vary from plan to plan. See Chapter X for the definition of annuities.

  • Individual Retirement Accounts (IRAs)

    There are two types of IRAs: the more traditional IRA and the Roth IRA. These are plans you can contribute to on your own, whether or not your company offers a retirement plan. Both can be opened at a bank or at a brokerage company, and allow you to invest in stocks, bonds, mutual funds or certificates of deposit (CDs). The contribution limits are much lower than what you can contribute through an employer-sponsored plan; in 2012, the IRA contribution limit for those age 49 and under is $5,000, or your total 2012 taxable compensation, whichever is lower.

    A Traditional IRA is a tax-deferred retirement account. Much like a 401(k), you contribute pretax dollars, which grow tax free. Only when you begin to withdraw the money will you start paying tax on the withdrawals. Traditional IRAs can have limits on contributions if your modified adjusted gross income (MAGI) exceeds a certain threshold. The earliest age you can start withdrawals is 59.5; if you take the money out before this time, you could be subject to a 10 percent penalty. Once you reach age 70.5, there are mandatory minimum withdrawals that you must take.

    With a Roth IRA you pay the taxes before you make your contributions. Then, when you withdraw the money during retirement following the rules of the plan, there are no tax consequences. The Roth IRA also has income limitations, but there is no mandatory distribution age and your contributions (although not your earnings) can be withdrawn before age 59.5 without penalty.

    A Simplified Employee Pension (SEP) plan, according to the IRS, ďprovides business owners with a simplified method to contribute toward their employeesí retirement as well as their own retirement savings. Contributions are made to an Individual Retirement Account or Annuity (IRA) set up for each plan participant (a SEP-IRA). A SEP-IRA account is a traditional IRA and follows the same investment, distribution, and rollover rules as traditional IRAs.

  • HSAs

    HSA stands for Health Savings Account. It's a special savings account for people who have a high deductible health plan (HDHP). The HSA allows you to save tax-free dollars to pay for IRS-qualified medical expenses the HDHP doesn't cover. But the instrument as other benefits, too. For example: Your HSA and savings are yours to keep year after year. There's no "use it or lose it" penaltyóeven if you change jobs or healthcare plans; You can grow your HSA with investment options. And whatever you earn from HSA investments is not taxed, as long as the funds remain in your HSA account.

Annuities: A Primer

It also makes sense to use guaranteed income from fixed-income and certain types of variable annuities, in addition to your Social Security or pension income, for some protection to help ensure essential expenses (food, utilities, health care, and other must-haves) are covered.

Let's look at each of the three building blocks.

  • Fixed-income annuities: guaranteed income

    A fixed-income annuity is a contract with an insurance company that, in return for an up-front investment, guarantees to pay you (or you and another person) a set amount of income either for the rest of your life or for a set period of time. The income could start immediately or on a future date that you select.

    Why include a fixed-income annuity as part of a diversified income strategy? Fixed annuities, along with Social Security and/or pensions, provide guaranteed income to help meet essential expenses. The insurance company is obligated to make payments to you for a specific time frame you select, or if you choose a lifetime option, the payments will occur as long as you or your spouse live.

    But here are two things a typical fixed-income annuity wonít provide: access to the money you invested and growth potential. Since you give up access to the savings you use to purchase this type of annuity, you will need to have other assets available to address unexpected expenses that might crop up.

    Consider a fixed-income annuity with a cost-of-living adjustment (COLA) to help protect your income payments from inflation. For example, if you add a 2 percent COLA to your annuity, your income payments will increase by 2 percent every year. Although a COLA will require additional assets when purchased, the increasing income payments can help address the impact of inflation.

  • Variable annuities: guarantees and growth potential

    Unlike fixed-income annuities, variable annuities have underlying investment options that provide potential for growth and may help offset inflation. A variable income annuity guarantees payments for as long as you live. Depending on the specific guarantees of the annuity, these income payments may go up or down based on the performance of the underlying investments. You can pay extra for a deferred variable annuity with a guaranteed minimum withdrawal benefit (GMWB) to ensure that your payments wonít dip below a set amount, though they may rise due to market performance.

    Why might you purchase a variable annuity rather than invest the money directly in the stock market? A variable annuity with a lifetime income payment option may help protect you against the risk of outliving your assets.

    Warning: As with a fixed-income annuity, you may have to give up access to savings you use to purchase certain variable annuities.

  • Withdrawals from an investment portfolio: growth potential and flexibility

    An investment portfolio with a mix of stocks, bonds, and short-term investments can be an essential part of a diversified income strategy. Why? It provides flexibility (you can generally access your money when you need it) and growth potential, which is as critical in retirement as it is when you are saving for it, because you may need these assets to last 30 years or more. Of course, there is market risk with an investment portfolio, which is why it should be used to cover discretionary expenses in retirement to the extent possible or necessary.

Common Mistakes People Make

Achieving success with these long-term investment plans requires that you consistently make contributions, adopt a long-term mindset and not allow day-to-day stock market swings deter you from your ultimate goal of building for the future. Optimize your earnings when you're young, avoid these all too common mistakes.

  • You donít invest

    To many non-professionals, investing seems like a challenging process. It requires focus and discipline. In order to avoid it, many young investors convince themselves that they can invest "later" and everything will be OK. That would be a mistake. What many people don't realize is that the earlier you start putting money away, the less you'll have to contribute. By investing consistently when you are young, you will allow the process of compounding to work to your advantage. If you want to know more about compounding, check out this compounding calculator.

    The amount that you invest will grow substantially over time as you earn interest, receive dividends and share values appreciate. The longer your money is at work, the wealthier you will be in the future and at the lowest possible cost to you.

  • Take calculated risks, not unrealistic chances

    When you are investing at a young age, you can afford to take some calculated risks. That said, it is important to have realistic expectations of your investments. Not every investment will start delivering a 50 percent return. When the markets and economy are doing well, there are stocks that do have returns like this, but these stocks are generally very volatile and can have huge price swings at any time. By expecting paper losses in bad years and an average return of 8 to 12% per year over the long run, you can avoid the trap of abandoning your investments out of frustration.

  • You donít diversify

    This strategy will reduce your overall risk by having investments in a variety of different areas. This allows you not be too exposed to an investment that might not be doing so well and helps keep your money growing at a consistent, steady rate every year. Investing in index funds is a great way to diversify with minimal effort.

  • Letting Your Emotions Run Your Investments

    Another mistake that many investors make is becoming emotionally involved. In some cases, this means believing that an investment that has done well in the past, like a high-performing stock, will continue to do well in the future. Buying an investment that has a high price because of its past success can make it difficult to profit from that investment. Conversely, many people will sell their investments, or stop making their investment contributions when the markets are down or the economy isn't doing well. This behavior will lock in your losses, hurt your compounding and take you nowhere.

The Bottom Line

Start investing early and consistently to take full advantage of compounding and to use tax-advantaged tools such as 401(k)s, 403(b)s and IRAs to further your goals.

If you play the market, ignore short-term highs and lows in both the overall market and your individual investments and stay focused on the long-term. Diversify: by doing so and being realistic and unemotional about your investments, you should be able to build wealth comfortably over time.

Other options

This brings us to another path of action, basically the pros and cons of fee based financial planners, such as Vanguard and what they offer, and why investing with Vanguard or with fee based financial planners is preferable (for some investors) to traditional stock brokers that charge per trade, with large fees, and lots of account churn. The real question here is, does a fee-based brokerage account have a place in your portfolio? The answer largely depends on your perspective, your objectives and the quality of the advice you are receiving from your financial services professional. Understand the basic definition of a fee based investment: itís an investment account in which the advisor's compensation is based on a set percentage of the client's assets instead of on commissions. Contrast this to commission-based investment, in which the advisor makes money based on the amount of trades made or the amount of assets sold to the client.

If you trade frequently and appreciate a few tips from your advisor, you may be happy with the status quo. If you want unbiased advice, comprehensive financial planning services and commission-free trading, the situation is a bit more complex. Many advisors do help their fee-based brokerage clients create comprehensive financial plans with ongoing advice and portfolio monitoring. If you can find such an advisor, or if the industry officially creates an advisory version of the fee-based brokerage account, the fee-based brokerage may still work for you. If you don't want advice and don't trade frequently, working with a financial advisor and putting your money in a fee-based account may not be the right approach.

Another option is a financial website with a human component. Like other Internet-based services, Betterment.com deals with customers primarily online. However, customers with $100,000 or more can talk free to an advisor on the phone. The 2-year-old New York website places customers in as many as eight low-priced stock and bond exchange-traded funds, six stock offerings from Vanguard and two iShares bond funds. On top of the fund fees, Betterment.com charges 0.15% to 0.35%, depending on the assets held at the firm. Itís 0.35% for people with less than $10,000, 0.25% for those with $10,000 to $100,000 and 0.15% for those topping $100,000. What sets Betterment.com apart is access to an advisor for customers in the top tier. Customers can talk to Stein, the founder, or to a second advisor on the staff. Thereís no pre-set limit on the number of conversations or their length.

Words from the wise

There's a lot you can do on your own to prepare for retirement. But when you don't have time to step back and look at the bigger picture, a financial professional can help you review your situation and explore options to make sure your money will last. A good advisor can:

  • Create an asset allocation strategy to reduce investment risk and promote better returns
  • Develop a spending plan
  • Steer you away from tax moves that could be expensive in the long run
  • Draw up an estate plan or reviewing one you've prepared yourself
  • Decide how to manage a lump-sum severance payment or retirement-plan distribution
  • Help you through a difficult transition, such as a retirement, divorce or death of your spouse
  • Handle an inheritance or other unexpected financial windfall
  • Face a financial crisis such as a serious illness, layoff or natural disaster
  • Care for aging parents or a disabled child
  • Manage your money, if you have a healthy amount accumulated but don't have the time or interest in micromanaging it
  • Choose whether to accept or waive joint survivor benefits on your pension
  • Develop a college-funding plan for your children or grandchildren
  • Select a life insurance or long-term care policy

Meanwhile, thereís a new kid on the block. And the designation is Retirement Income Certified Professional, RICP for short. Unlike a CFP or ChFC, the RICP specializes in the specific area of retirement income planning, addressing everything from how retirees can use their savings in smart, strategic ways to realize their dreams during retirement, to making a financial action plan for how they'll be cared for if they can no longer care for themselves. With baby boomers reportedly retiring by 10,000 a day, this is certainly a needed profession.

If youíre looking for a qualified planner you might want to start your search here:

  • The Financial Planning Association provides referrals to its members, who have earned the Certified Financial Plannerô (CFPģ) designation after completing extensive financial planning coursework and work experience. The FPA offers the brochures "How a Financial Planner Can Help You," and "How to Choose the Right One" by calling 1-800-282-PLAN or visiting their web site.
  • The National Association of Personal financial Advisors offers referrals to its membership of fee-only planners, as well as a brochure, "How to Choose a Financial Planner."

The Taxman Always Cometh (Sooner or Later)

Taxes are a fact of life, even when you retire. What will change significantly is your tax liability. When you go into retirement, your income will probably decrease because you wonít have income from your regular job anymore. But many retirees have other sources of income, and they all need to be monitored carefully to avoid paying high taxes. Hereís a look at what you can do:

  • Reduce your expenses

    By keeping your expenses moderate, you will be able to stay under the 15 percent tax bracket and take advantage of many tax breaks available. The top 7 tax breaks available for seniors or retirees are: medical and dental expenses; selling your house; retirement plans contributions; investment expenses; business expenses, charitable contributions and your standard deductions. For more information about these breaks, look here.

    For married couples filing jointly, thatís $73,800 after your deductions and personal exemptions in 2014.

  • Pay off your mortgage before retiring

    One way to minimize your monthly expenses is to pay off your mortgage before retirement. Your mortgage is usually your biggest monthly bill, and if you can get rid of that, youíll have much more flexibility in retirement.

  • Minimize tax on your Social Security benefit

    Your social security income is taxed, based on your combined income? (Combined income is your adjusted gross income plus non-taxable interest plus half of your Social Security benefits.) If you file as married jointly and your combined income is below $32,000, you wonít have to pay any tax on your Social Security benefit. But as your income increases, you will pay more and more tax on your Social Security benefit.

  • Dividend income and long-term capital gains

    Qualified dividend income is taxed at zero percent, 15 percent or 20 percent depending on your tax bracket. If you can stay under the 15 percent tax bracket, your dividend income wonít be taxed.

  • Roth IRA and Roth 401(k)

    Your retirement funds in a Roth IRA or Roth 401(k) wonít be taxed if your withdrawals are qualified. Generally, if you are over 59Ĺ and the contributions were made more than five years ago, the withdrawal will be qualified. Check the IRS rule or talk with your tax advisor to make sure.

  • Traditional IRA and 401(k) distributions

    Withdrawals from your traditional IRA (deductible) and 401(k) are fully taxable. These retirement accounts helped lower your tax bill in your working years, but they will increase your tax liability once you start withdrawing the money.

  • Diversify your after-retirement income

    Diversify your after-retirement income. Retirees can have income from Social Security, pensions, rentals, taxable brokerage accounts, tax-free Roth accounts, saving accounts, bonds and more. These incomes can be fully taxed, taxed at the long-term capital gains rate, partially taxed (Social Security benefit) or not taxed at all. Keeping your taxable income under the 15 percent tax bracket will help minimize the amount of tax you pay.

Trending, Early Retirement Planning

There is a growing movement of people who realize that saving 40-80% of income a year can allow average savers to retire at extremely young ages. Sounds almost impossible in this day and age, with prices rising and incomes flat and the lure of the latest iPhone or iPad. But it can be done. Itís quite rare, of course. And there are some pretty smart companies ready to advise you on how to do it. In general, most peopleís expenses match to their income regardless of how much they make. To retire early, you have to avoid this. This means living on much less than you earn. But you canít do this by making only a few cost cutting measures; or even a great many cost cutting measures. Cost cutting will hurt.

Instead of downgrading, choose to live differently. Do not accept a second-rate car. Dump the car entirely, and live in an RV. Or rent a single room, or get a bigger place but live with others, perhaps your family. Develop an inexpensive but sophisticated taste. Here, you must be creative and creativity stands in direct relation to your quality of life. Creative retires do lots of stuff. Some hang out on their sailboat in the Caribbean, some buy a house in Argentina, some compete semi-professionally in their favorite sport, some travel around, others tend to their garden, or read all the classics.

Itís all about the numbers. And compounding (remember compounding? See Introduction in this mini course). Mathematics dictate that $100,000 saved by a frugal young worker is worth much more in the future than $100,000 saved by a 50-year-old, due to the power of compounding. Starting to save for retirement, while other thirtysomethings are loading up on expensive cable TV plans and fancy smartphones, speeds retirement.

Second, extreme-early-retirement believers refer to the 4% rule, which dictates that a retirement nest egg can last for decades or longer if the retiree withdraws 4% in the first year, then increases that dollar amount each year to adjust for inflation. Some extreme early retirees spin the 4% rule a bit by setting a goal of never taking more than 4% of their portfolios out each year no matter what. Doing so means that those who can save 25 times their annual expenses would have enough to last their lifetimes.

For those interested in this there are two very heady, clever and usefual websites we recommend following (their blogs are priceless); Mr. Money Mustache and Early Retirement Extreme. For much more on financial independence, check out Mad FIendist.

The Spoils of Your Labors (How and where to enjoy your retirementÖ)

Iíll start with the results of a recent study by Merrill Lynch; 81 percent of those surveyed said having good health is the most important part of a happy retirement. More important, even, than being financially secure or being with close family and friends. Kind of makes sense doesnít it?

source: http://www.wealthmanagement.ml.com/wm/Pages/Age-wave-Survey.aspx

Without your health, whatever youíve accrued cannot be enjoyed by you. That said, if youíre in good health and planned ahead for your retirement, enjoy the rest of your life. Travel, write, read books, play golf, do all the things you didnít have time for when you were younger. Here are the top 10 retirement destinations as presented by the AARP. For more information on these top 10 locations, visit this AARP article.

  1. Daytona Beach
  2. Pocatello, Idaho
  3. Bangor, Maine
  4. Greenville, South Carolina
  5. Grand Rapids, Michigan
  6. South Bend, Indiana
  7. Erie, Pennsylvania
  8. Louisville, Kentucky
  9. Sherman, Texas
  10. Pueblo, Colorado

What they all have in common is they are affordable, beautiful places, and safe.