One Of The Best Places To Retire Is A Small Texas Town Known For Its Annual Oktoberfest Celebration

While Texas is one of the best states to live and work in from a frugality standpoint, the state is also gaining attention from folks looking to retire. When choosing a place to retire, many individuals want an alternative to the big cities, instead searching for community-oriented, slower-paced locations. Luckily, Texas is filled with such hidden gems.

One standout is Fredericksburg. Nestled in the heart of the Texas Hill Country, Fredericksburg is a charming town and one of the best places to retire in Texas, according to World Atlas. Beyond its picturesque scenery, the city offers a blend of German heritage and Southern hospitality, all while remaining affordable enough for retirees to live comfortably. Adding to its appeal is a close-knit community that comes alive during its beloved annual Oktoberfest celebration, which brings food, music, and tradition to the forefront. With its small-town charm, cultural richness, and relaxed lifestyle, Fredericksburg checks all the boxes for a fulfilling retirement.

One of the biggest draws for retirees considering Fredericksburg is its manageable cost of living, which allows residents to enjoy a high quality of life without breaking the bank. Compared to the national average cost of living, residing in Fredericksburg is about 8% less expensive, according to the Economic Research Institute. In particular, food and health services are the areas in which retirees can expect to see the most savings. In addition to cost of living, retirees in Fredericksburg and throughout Texas have the added benefit of not paying state income tax. This means that retirement income whether from Social Security benefits, pensions, Roth IRAs, or 401(k)s is not taxed, enabling individuals to keep more money in their pocket.

Housing prices have risen in recent years, as they have across much of the country. However, Fredericksburg remains more affordable than many larger Texas cities like Austin or Dallas. According to Realtor.com, the median home price in Fredericksburg in 2025 was $426,000, which is in line with the national median. However, for empty-nester retirees looking to downsize into an apartment, Fredericksburg's rental market remains relatively affordable. According to Apartments.com, the average rent price for a one-bedroom apartment in Fredericksburg is $1,688, which is down from the previous year.

Before making the move, there are a few important factors retirees should consider to ensure Fredericksburg is the right fit for their lifestyle and long-term needs. While the town offers undeniable charm and a relaxed lifestyle, it's still a relatively small city, with a population of 11,000, according to the latest Census data. That means fewer big-city conveniences like retail chains or large hospitals. Additionally, Austin and San Antonio, the two largest nearby cities, require long commutes by car or pricey transport solutions, adding to the complexity.

In recent years, Fredericksburg's growing population has also led to an increase in tourism, especially during peak seasons like Oktoberfest. While many residents enjoy the festive atmosphere, others may find the increase in visitors disruptive to their daily life and to the town's otherwise peaceful vibe. That said, for individuals looking for a close-knit community with a plethora of activities and scenic places to settle down, Fredericksburg continues to be one of the best places to retire in the United States.