For Retirees, the Allure of College Towns

Why some retirees prefer bricks and ivy to sand and putting greens.

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[See Best Colleges in Photos—Editor's Picks.]

The tendency for medical, research, technology, or light industrial companies to set up shop near colleges and universities, particularly in midsized to larger cities, also supports the local economy. North Carolina's Research Triangle Park, one of the oldest research parks in the country, is home to 137 companies and employs 42,000 people.

But there is a downside to stability. The cost-of-living in college towns might remain elevated relative to other changes in a resident's financial profile, such as declining stock portfolio values.

"College economies, especially private schools, generally hold up better than the rest of the economy. Hence, the relative decline in cost of living has declined least in those areas," says Harlan Platt, economist and professor of finance at Boston's Northeastern University. "However, many of these schools are in rural America, and so started out with lower costs."

Retirees should also take into consideration a state's income tax level and weigh any special rules for seniors. Some states don't have income tax, while others exempt some Social Security and pension income.

[See 12 States Without Pension or Social Security Taxes.]

Overall, price stability lowers risk. It's this stability that encourages development of multi-unit independent- and assisted-living facilities that maintain relationships with higher-learning institutions.

One such affiliation is between Miami University in Oxford, Ohio and The Knolls, a continuing care retirement community a mile and a half from campus. The affiliation, launched in 2005, is one of more than 100 such partnerships between colleges and nearby retirement centers. Their facility draws national demand because of the special relationship, says Tim McGowan, director at The Knolls of Oxford.

Meeting needs. The community has experienced some slowing demand during the recession, in part because weaker home sales prices and volume cut into would-be residents' ability to get enough value out of their homes to raise the upfront funds required for the facility's residency contracts. The Knolls has offered creative financing incentives, including subsidizing deflated housing prices so new residents could get out from under their existing homes by selling at the prevailing weaker market prices.

Students and seniors forge long-term relationships as part of a volunteer and part-time work program—friendships are the bonus. Students from a variety of disciplines come to The Knolls, but the school's Scripps Gerontology Center's research and resource capabilities brings aging issues to the fore.

Opening Minds Through Art (OMA) is a multiple-week, high-level program developed by a Miami student and conducted by the Scripps Gerontology Center that promotes creative expression among older people with dementia. Participants meet one-on-one with volunteers, usually Miami University students, to create watercolor, collage, or printmaking and hold shows and sales of their works, says Suzanne Kunkel, director of the Scripps Gerontology Center.

Classes through the university unite people ranging from their 20s to seniors; The Knolls shuttles residents to Miami sporting and cultural events and college clubs use The Knolls for events.

"Baby boomers are looking for ways to remain engaged in their community," says Kunkel. "Long gone are the days when bingo was the ultimate activity for retired people."

Here's a brief list of resources for retirement and senior living choices in college towns:

• Osher Lifelong Learning Institutes National Resource Center at the University of Southern Maine:

• Eastern Kentucky University Continuing Education & Outreach:

• North Carolina Center for Creative Retirement, The University of North Carolina at Asheville:

• Elderhostel, Inc.'s Lifelong Learning:

• Miami University's Scripps Gerontology Center: