Ahhh, retirement. Nine holes in the morning, the beach on the weekends, sunset picnics and... the office for a few hours a day?

Not too long ago, the whole point of retirement was not working. But today's retirees are increasingly counting themselves among the job-seekers. Roughly three out of four workers over age 50 say they plan to work at least part-time in retirement, according to a 2010 study by the Families and Work Institute; currently about 20% of retirees have a job. Indeed, working during retirement is becoming the "new normal," the study says.

For some retirees working means an encore, a chance to dive into something they've always been passionate about. Others are driven by a desire to stay vital and stave off boredom. But for many people, working past 65 is a necessity, not a luxury. Considering the average boomer couple currently has a retirement savings shortfall of about $30,000, according to a recent study by the Employee Benefit Research Institute, it's a trend that experts predict with accelerate. "Boomers aren't as financially prepared for retirement as earlier generations," says Mary Johnson, a senior policy analyst at The Senior Citizens League, a non-profit senior rights advocacy group.

Regardless of the reason, a post-career job hunt can drastically affect where you're going to settle down when you retire. That's why SmartMoney.com's second annual survey of the best places to retire comes with a twist. Like last year, we've analyzed tax rates, cost-of-living numbers and real estate prices to compile a list of less expensive alternatives to several traditional retirement hotspots. But this year we also combed for relatively low unemployment rates and thriving job opportunities for seniors.

In the current economy, of course, finding work isn't easy in most regions of the country. What's more, it takes employees over 55 more than 40% longer to get hired than their younger counterparts, according to AARP. Meanwhile, nest eggs are shrinking and retiree income is stagnating. (One recent example: The Social Security cost-of-living increase announced last week is likely to be at least partially negated by rising Medicare premiums, experts say.) That means finding an affordable place to live has become more important -- and more difficult. Palm Beach, Florida, for example, has a median home price of $827,300, a cost of living that's 109% higher than average, and an unemployment rate pushing 10%, according to Sperling's Best Places. In other words, not a keeper for the list.

Instead, here are seven underrated retirement havens (complete with comparisons to their more expensive alternatives) that are relatively affordable, delightful and full of opportunities for work and play.

Santa Fe, New Mexico

Joel Stein, a corporate bond broker from New York City, and his wife retired to Santa Fe in 1997. The reason: "It's like a microcosm of New York but without the hustle and bustle," he says. "It's a small town but it's sophisticated — there's art, opera and hundreds of restaurants. It's a nice place to retire but it doesn't feel like a 'retirement town'."

Nicknamed "City Different," Santa Fe is indeed unlike the trendier Sedona, an Arizona town that's often touted as a best place to retire. Unemployment is just 5.3%, thanks to Santa Fe's thriving tourism business and government payroll. (Santa Fe is the state capital.)

The arts scene is one of the best you'll find anywhere. Santa Fe is dotted with 240 art galleries and the home of Art Santa Fe, an international art fair that attracts buyers and tourists from around the globe. In fact, Santa Fe's art market is the fourth largest in the country in terms of sales, according to the University of New Mexico Bureau of Business and Economic Research. Stein says he and his wife have embraced the scene. He leads historic walking tours of the area and works for pay at the Museum of Natural History; she is a docent at a local art museum.

For retirees who want to work, tourism-related jobs are a good bet, says Steve Lewis, a spokesperson for the Santa Fe Convention & Visitor's Bureau. In addition, many people retire here to reinvent themselves. "We get a lot of people who have always wanted to be artists and they come here to do it," he adds.

Medical and travel information: The Christus St. Vincent Regional Medicare Center, which is the regional medical center for northern New Mexico, is in Santa Fe. The Albuquerque airport, which serves 10 major airlines, is about an hour's drive.

Lincoln, Nebraska

Lincoln is the quintessential Midwestern town — friendly people, college football and picturesque landscapes. Residents take a brimming pride of their city's low crime rate and accessible natural beauty, including ten nearby lakes and more than 99 miles of recreational trails.

Lincoln sounds a lot like another Midwest retirement haven that frequents the best lists: Ann Arbor, Michigan. But Nebraska's state capital has a much lower unemployment rate, just 3.6% compared to Ann Arbor's 7.2%.

Even more surprising, especially for a Midwest town, says experts, is that in the past two decades the jobless rate in this state capital has never gone above 5%, according to the Bureau of Labor Statistics. The University of Nebraska, government jobs, as well a sizable corporate presence, including Kawasaki and Assurity Life Insurance, help keep employment stable. And Lincoln is affordable: Housing prices have remained relatively flat since 2007, with a two-bedroom home now running for about $115,000.

No wonder Jim Strand, a 65-year-old Lincoln resident, decided to stay put when he quit working. "Stability is really important with all the craziness in the financial and housing markets," he says. Strand, who served as the interim business manager for the local zoo for the first eight months of this year, appreciates the job and volunteer opportunities: "It's nice to feel like you're part of the community."

Medical and travel information: There are three major hospitals in Lincoln. The local airport offers direct flights to most major cities in America via Delta or United. 

Manhattan, Kansas

The Little Apple, as Manhattan, Kan., is known, is perfect for active, outdoorsy retirees who also want the cultural and educational opportunities that a college town brings. The 1,200-acre Tuttle Creek Park boasts a 12,500-acre reservoir and 100 miles of shoreline with walking paths. The Flint Hills nature preserve (yes, there are hills in Kansas) is the last large tract of protected prairie land in North America. After a day enjoying nature, residents can reward themselves with dinner out at one of the town's 130 restaurants.

Retirees can take or audit dozens of classes — from martial arts to Spanish — at the UFM Community Learning Center or at Kansas State University. Manhattan actually conjures up images of retirement hotspot, Athens, Georgia — another college town with an abundance of good restaurants and outdoorsy activities.

Here's the difference: Manhattan, Kansas, is a cheaper place to live. The cost of living is almost 9% lower than the national average and the lowest on our list of cities. (Athens has a cost of living that is just 3.9% lower than average.) Unemployment is also low, coming in at 5.9%.

For boomers dreaming of an entrepreneurial second act, Manhattan is a great place to start a store or other small business. The 23,000 students attending Kansas State University and the personnel at Fort Riley army base help keep the local economy humming. Better yet, experts say commercial real estate is a bargain -- retail space rents in the $20-25 per square foot range — and retail sales in the area have increased about 66% in the past decade, according to John Pagen, vice president for the Chamber of Commerce.

Meanwhile, the Department of Homeland Security is building a $720 million National Bio and Agro-Defense Facility, due to be completed by 2018. When that opens the local economy will likely get another boost.

Medical and travel information: Mercy Regional Hospital. A small local airport offers direct flights to Dallas and Chicago. 

Portland, Maine

Northampton, Mass., lands at the top many "best places to retire" lists. And for good reason: It's a scenic, mountain town with lots of Berkshire culture. It's also home to Smith College and close to four other name schools. But the charm comes at a price — it costs nearly 20% more than average city to live there.

Head about 200 miles north and you'll hit Portland, Maine, where the culture and natural beauty rivals Northampton thanks to miles of coastline, the popular fishing area of Sebago Lake, which is only a short drive from the city, and a smattering of islands around the coast. "Portland is known for its natural beauty," says travel blogger Lee Abbamonte.

Foodies also take note: Bon Appetit recently rated the city as one of the top small towns in America, due in part to some notable chefs. Hugo's, for example, is run by French Laundry chef Rob Evans and the chef at Fore Street is a James Beard Foundation Award winner, one of the most prestigious culinary awards.

Portland offers all this and incredible values. Homes here are about 44% less expensive than in Northampton — and right around the median price for a home nationwide. Unemployment is well below the national average, with many big employers such as Maine Medical Center, the largest hospital in the state, TD Bank and, of course, clothing company L.L. Bean. With its steady population growth and relatively low commercial real estate costs, Portland often and deservedly ranks as one of the best places to start a small business.

Medical and travel information: There are two major hospitals in the Portland area. A major airport offers flights to most US cities. 

Santa Maria, California

California's Sonoma and Napa counties have long been the gold standard of California wine country and a mecca for retirees. But prices have risen with that popularity. The median home price in Sonoma County's Santa Rosa, for instance, is close to $300,000 and the cost of living is 45% above average. High prices like these are encouraging Chardonnay-sipping retirees to look at some of the less-popular and more affordable corners of wine country.

Santa Maria is one such gem, says Warren Bland, the author of "Retire in Style: 60 Outstanding Places Across the USA and Canada." Part of the Santa Barbara wine region, which produces highly rated Chardonnays and Pinot Noirs, Santa Maria residents enjoy temperatures in the 60s and 70s nearly year around and with little rain. And while the local job market isn't exactly buzzing, nearby San Luis Obispo (just 30 miles away) and Santa Barbara (75 miles away) have healthier job markets than most California cities and are within driving distance.

Three years ago, when 82-year-old Jack Pellerin from Santa Ynez married a woman from Santa Maria, the couple realized they had too much stuff to fit into one house. So they decided they'd keep both places, splitting their time between them. Soon afterwards, Santa Maria's charms won the couple over to the point where they are almost full-time residents. "It's just the right size — it's big enough that you can get involved in a lot of things, but you still know a lot of people," says Pellerin. The best part, they say: Santa Maria isn't overrun with tourists.

Medical and travel information: The brand-new Marin Hospital is located in Santa Maria, several larger hospitals are located in nearby San Luis Obispo. A major airport is also in San Luis Obispo. 

Jupiter, Florida

The Great Recession took a heavy toll on Florida. Unemployment is 11% and median home sales prices have plummeted more than 40% since early 2007. Unfortunately that didn't create loads of housing bargains in some of Florida's most popular retirement spots, many of which were overvalued when the recession began. In Naples, for instance, the median home price is still half a million bucks, according to Zillow.com, even though prices dropped roughly 35% from their highs in early 2007.

While some of Florida's posh areas may still be unaffordable for many retirees, lower home prices in other parts of the state have created some attractive alternatives. Jupiter, for instance, on Florida's Atlantic-facing "Gold Coast" has similar pristine beaches, year-round warm weather, golf courses and shopping as Naples, but is about half the price to live in, according to data from Sperling's Best Places. The award-winning, 600-seat Maltz Jupiter Theatre, a regional theater that hosts well-known shows like Cabaret and Hello Dolly! as well as smaller shows, is a bonus, and swanky Palm Beach is only a 30 minute drive for those who want to stroll through the lap of luxury without having to pay for it.

As for job opportunities, Jupiter, with an unemployment rate of 8%, fares better than most of Florida. The area benefits from hosting the spring training seasons for two professional baseball teams, the Florida Marlins and St. Louis Cardinals, as well as biotech companies like the Scripps Institute and the Max Planck Society.

Medical and travel information: Jupiter Medical Center and several major hospitals in the Palm Beach area. Palm Beach International Airport offers direct flights to U.S. and international cities. 

Ithaca, New York

When the Dalai Lama decided to put down roots in United States, he didn't opt for Buddhist-heavy San Francisco or Eugene, Ore., with their many meditation-loving residents. Instead, he came to Ithaca, N.Y., to "offer Western students the opportunity to study authentic Tibetan Buddhism in a monastic setting."

That doesn't surprise many of Ithaca's 30,000 residents. "It's one of the loveliest places in America," says 76-year-old Roger Battistella, a retired Cornell college professor. This town is known for its beauty: You'll find dozens of waterfalls and craggy gorges that gave rise to tacky bumper stickers and t-shirts that sport the now ubiquitous "Ithaca is Gorges" tagline. But that doesn't spoil the area's 25,000 acres of national forest or the 40-mile long Cayuga Lake.

Perhaps it's all this beauty that give Ithaca its liberal, beatnik bent. "There's a zany political culture here," says Battistella. The "world's largest human peace sign" was created in Ithaca, when a local teen activist gathered nearly 6,000 people in 2008. Residents are well-versed in the art of protesting, as evidenced by recent Occupy Wall Street events and a rally in front of a local Bank of America branch.

Ithaca brings to mind another popular retirement town, Eugene, Oregon. True, the towns are nearly 3,000 miles apart and on opposite coasts, but both are havens for activist, outdoorsy retirees.

In Ithaca, your money goes farther — it's about 13% cheaper to live in than Eugene — and you've got a better chance of landing a job. The unemployment rate is just 5.8%, well below the national average.

One of the reasons for Ithaca's low unemployment is the presence of two highly rated universities, Cornell University and Ithaca College. And it's not just young people who land jobs there: AARP has named Cornell one of the top employers for people over 50, particularly in the green tech and tourism industries. And there are plenty of non-work related things to do. This past semester you could have taken a course on tropical field ornithology (the study of exotic birds), seen comedian Jon Stewart in person and cheered through an ice hockey face-off between Cornell's "Big Red" and Dartmouth's "Big Green."

Don't forget the food, say travel experts: Ithaca has some standout restaurants, including the seminal vegetarian Moosewood restaurant, which Bon Appetit said was "one of the 13 most influential and revolutionary restaurants of the 20th century."

Medical and travel information: Cayuga Medical Center employs 200 doctors. A small local airport services direct flights to Philadelphia, New York and Detroit. For more direct flights, the Syracuse airport is roughly an hour and a half drive from Ithaca. 

A month after Bank of America got pummeled by consumers and politicians for introducing plans for new debit-card fees, most other big U.S. banks are steering clear of imposing similar charges.

Following eight months of consumer testing, J.P. Morgan Chase & Co. (JPM - News) has decided that it won't charge customers who use their debit cards to make purchases, according to a person familiar with the bank's plans. The New York bank's Chase retail unit is one of the largest U.S. consumer banks, with 26.5 million checking accounts and 5,300 branches.

J.P. Morgan joins U.S. Bancorp (USB - News), Citigroup Inc. (C - News), PNC Financial Services Group Inc. (PNC - News), KeyCorp (KEY - News) and other large banks that have said in recent days that they won't impose monthly fees on debit cards. None of those banks said they made their decisions because of the outcry over Bank of America's fees.

"We looked at all options and quickly decided it didn't fit with our overall strategy," said David Bowen, who runs the consumer-product business at Cleveland-based Key, which ranks among the 20 largest banks in the country.

Banks are loading fees onto customer accounts in an attempt to recover billions of dollars in revenue that will be lost from new restrictions on debit cards, credit cards and overdrafts. Most big banks have already eliminated free checking for customers who don't meet certain criteria on their accounts, such as minimum balances or a certain number of direct deposit transactions.

Bank of America Corp. (BAC - News) has begun laying plans to charge millions of customers $5 a month if they use their debit cards to make purchases. The bank is still working out details of its plans, which likely won't affect all customers, according to a person familiar with the situation. SunTrust Banks Inc. (STI - News), Atlanta, is also tacking a $5 monthly fee on some debit-card users, while Regions Financial Corp. (RF - News) of Birmingham, Ala. is charging $4 a month on some accounts.

Wells Fargo & Co. (WFC - News) is testing a $3 monthly debit-card fee in five states.

The debit-card fees stem from a provision in last year's Dodd-Frank financial-overhaul law that reduced by roughly half the amount that banks are permitted to charge merchants for debit-card transactions. Merchants had long complained that they were being charged too much to accept debit cards, which are typically used instead of cash and checks.

Banks are expected to lose more than $6 billion in annual revenue as a result of the new rules, according to industry estimates.

The debit-card fees have sparked an outcry among politicians—including members of Congress and President Obama—as well as customers, who have threatened to close their bank accounts and move to other institutions.

Community banks and credit unions are tapping into that fury by encouraging consumers to move to small institutions that don't charge such fees. Bethpage Federal Credit Union in New York, for example, said this week it signed up 1,500 customers—twice its normal rate—since Bank of America's plans became public.

Other big banks say they determined debit-card fees would cost them as well. "Our customers said that would be a massive source of irritation for them," said Stephen Troutner, Citigroup's head of consumer and small business banking. "Any time you hear that kind of emphatic feedback from customers, you've got to listen to them."

Many banks will likely increase charges in other areas to make up the lost revenue but some banks said they will focus on winning over more customers and convincing them to sign up for more financial products.

Todd Barnhart, head of retail products at Pittsburgh-based PNC, said debit cards are essentially an extension of checking accounts and that consumers don't view them as a separate product.

"I generally think customers don't want to be nickled and dimed," he said.

Indeed, consumers expressed relief that the debit-fee trend is not spreading widely.

"It's not about the money. It's about 'are you kidding me?'" said Amanda Peterson of San Francisco, who banks with U.S. Bancorp. She said she would have "immediately" switched banks if the Minneapolis-based lender had started charging for debit cards.

Chase was one of the first big banks to explore monthly fees on debit cards. The bank began testing monthly fees of $3 in Wisconsin and Georgia in February. Those tests are scheduled to end in mid-November and won't be renewed or expanded for now, said the person familiar with the bank's plans.

Sen. Richard Durbin (D., Ill.), who wrote the provision which reduced merchant debit-card fees, sent a letter to Wells Fargo Chief Executive John Stumpf last week complaining about the bank's new charges. "It is certainly surprising that your bank would pursue this fee strategy in light of the consumer reaction that has been prompted by Bank of America's recent imposition of a monthly debit fee on its customers. If you were hoping that your new fee would go unnoticed, it has not," he wrote.

In a statement, Wells Fargo said, "We regularly review our pricing and take into account the needs of our customers, industry trends, the market competition and our cost of doing business."

(c) Wall Street Journal - Robin Sidel - Suzanne Kapner contributed to this article

In an unprecedented move on Tuesday, the Federal Reserve said definitively that historically-low rates are here to stay until at least mid-2013, essentially eliminating the possibility of a hike in interest rates for the next two years.

While stocks reacted favorably to the news — the Dow soared 429 points — determining the impact of extraordinarily low interest rates for the next two years from a personal finance perspective is a bit more ambiguous.

On the one hand, the Federal Open Market Committee's decision to keep rates low for more than just an "extended period" — as it has previously stated — is an indicator the Fed expects the economy to remain sluggish. That could mean we will see continued high unemployment, low consumer confidence and slow economic growth, all factors that do not give one much impetus to borrow and spend money.

On the other hand, it has never been cheaper to borrow money; if you can qualify for a loan, now (or sometime before mid-2013) is the time to get one. But personal finance experts caution against making any purchasing decisions based on interest rates, warning consumers it's important to keep the bigger picture in perspective.

"I certainly wouldn't be basing my decision to buy a car, a house, or take out a loan because interest rates are going to stay low for a couple of years," said Erik Carter, a certified financial planner with Financial Finesse, a Los Angeles-based financial education firm. "Really, it's about focusing on your goals, focusing on the fundamentals and not being distracted by what the Fed is saying today."

Carter said if it makes sense for you to buy a car, consolidate student-loan debt, or refinance your mortgage, now is as good a time as any with these historic rates, but major spending decisions should be made based upon your current financial picture, not the federal funds rate.

The fact that we know rates will be low for the near future is a positive thing for consumers who are looking to buy a home or refinance, according to Paul Bishop, vice president of research for the National Association of Realtors. He continued to explain that fear of rising mortgage rates is not really the primary concern weighing on borrowers. For most consumers, it's high lending standards, not interest rates, that are holding them back.

"It's really the availability of mortgages at this point that is a problem for consumers," Bishop said. "Underwriting standards are fairly strict and are likely to remain that way for some time."

Still, knowing we will see two more years of low interest rates is not a bad thing for prospective home buyers, who can work to improve their credit without feeling they might miss out on an historic deal. For those with good credit, Bishop reiterates that it is tough to beat flat housing prices and rock-bottom interest rates, if you are considering the purchase a home.

From a retirement perspective, a protracted period of depressed rates means socking money away into the standard high-yield savings account is not going to cut it. Mark Singer, a certified financial planner and author of "The Changing Landscape of Retirement," said most conventional investment strategies can not satisfy most investors' goals anymore.

"Eighty percent of the money invested in 401(k)s is in equities — they're getting crushed, and are moving from one headline to the next," Singer said. "You can't use the traditional stocks, bonds, cash and mutual funds formula anymore, you have to use alternative investment classes." He continued to cite managed futures, long/short funds and market-neutral strategies as better alternatives.

Singer explained that for people nearing retirement that have hit their target retirement "number," or the amount of money they can live comfortably on in retirement, they need to take low-risk strategies to maintain that number against inflation. For those who have not yet reached their retirement goals, Singer advocates carefully evaluating how much risk you need to take in order to reach the target, but warns against putting a lot of money in the market and investing everything in bonds, regardless of where interest rates stand.

The idea of the Fed giving us a more transparent outlook as to how interest rates will look for the next two years may be atypical, but there is nothing stopping the committee from changing its strategy in a few months if the economy were to suddenly stabilize. In light of that, Carter reiterated consumers should not alter their fiscal picture much from what they were already planning on the spending or saving front.

"You have to keep it in perspective — the fundamentals are the same," Carter said. "You're always trying to earn as much interest as possible and pay as little interest as possible."

In other words, act in your own best interest, regardless of interest rate levels.

(c) Kathryn Glass, Fox Business