10 Small Towns With the Best Christmas Spirit for Retirement

Retirement often leads people to choose towns that are easy to live in. This includes affordable housing, fair tax policies, and access to essential services. But for some, it also means living in a place where holiday traditions are part of the community. In these towns, Christmas celebrations include parades, local markets, public decorations, and events that engage residents, not just tourists.

Taos, New Mexico

Holiday traditions in Taos reflect the town’s long cultural history. Adobe buildings feature luminaria displays, and seasonal markets showcase handcrafted items. Retirees often arrive drawn by the deserts and the chance to live near creative people without constant motion. New Mexico taxes most retirement income, but the cost of living stays affordable.

Stowe, Vermont

Many retirees look for routine, especially during colder months. A study showed that structured environments contribute to better emotional health in adults over 65. Stowe offers exactly that with its clear seasons, repeatable local events, and a winter centered around small gatherings, markets, and neighborhood traditions.

North Pole, Alaska

The Santa Claus House, built in the 1950s, anchors this town’s identity and serves as a real business and community hub. December attracts visitors, but the rest of the year stays quiet. Alaska’s tax structure makes retirement affordable, since there’s no state income tax at all.

Branson, Missouri

Here, home prices average around $245,000, and Social Security isn’t taxed. The town treats the holiday season as a long-standing tradition. Each year, Branson transforms into what locals call America’s Christmas Tree City. The town hosts multiple light tours, themed shows, and seasonal parades.

Frankenmuth, Michigan

Bronner’s Christmas Wonderland takes up 320,000 square feet and operates year-round, which makes it one of the largest Christmas stores in the world. It is situated in Frankenmuth, a town renowned for its Bavarian-style architecture and seasonal traditions. Michigan further excludes Social Security from taxation, and by 2026, it will exempt all retirement income from taxation.

Santa Claus, Indiana

Leaning fully into its name, Santa Claus, Indiana, keeps Christmas visible all year. The town features a Santa Claus Museum, a themed amusement park, and a drive-through light display that draws visitors every December. While the theme might seem excessive at first, many residents appreciate the town’s identity.

Bethlehem, Pennsylvania

Nicknamed “Christmas City,” Bethlehem earned its title in 1741 when Moravian settlers named it on Christmas Eve. The town still leans into that identity with winter markets, historic tours, and a steady lineup of seasonal events. Bethlehem appeals to retirees who want a place with strong traditions and a community that treats the holiday season as part of everyday life.

Sedona, Arizona

Life in Sedona isn’t built for crowds or large seasonal events, and that’s part of its appeal. During the holidays, residents hang lights on adobe homes, attend local art festivals, and gather in small settings. The cost of living stays moderate compared to other scenic towns, especially in the Southwest.

Carmel-By-The-Sea, California

What makes Carmel suitable for retirees is its strict zoning laws, which keep large commercial chains out and maintain a small-town scale that’s easy to navigate on foot. Christmas here reflects that same restraint, as decorations stay simple, storefronts use white lights, and events focus on community rather than spectacle. Residents walk to tree lightings or local concerts without dealing with traffic or crowds.

Beaufort, South Carolina

You will find a steady pace in Beaufort, where life doesn’t revolve around events. Retirees often appreciate how easy it is to take part in things—parades, waterfront strolls, or small winter markets—without dealing with large crowds or long drives. The mild climate keeps outdoor activities comfortable through December.