Emily Brandon

Members of the massive baby boom generation have reinvented each stage of life as they passed through it. Their retirement years will be no different. Like previous generations, boomer retirees are going to take up new hobbies and volunteer. But those who didn't save enough or choose to continue working will also start businesses and begin second careers. As life spans continue to increase, retirees are likely to embrace a mix of work and leisure activities.

Take Marie Hornback, 66, who runs two businesses in Fort Collins, Colo., and has no plans to retire. Hornback, a British-born American citizen and director of H.M.S. Protocol & Etiquette Training, opened a stationary store, Sign With Prestige, in May 2008. "I think if I didn't have these businesses, I would not sit at home crocheting every day, even though I do crochet and embroider," Hornbacks says. "I don't tire easily and I like the excitement and the rewards of accomplishing goals, doing something that has value, and making an impact on other people." Although business is sometimes slow, Hornback says it's a challenge she enjoys. "I've only sold $27 worth of products today," she says. "But it's exciting to see a day when you get a rush of [consumers] and think, 'Alright, now I can pay the rent.'"

To help retirees find a place to launch this new phase of life, U.S. News revved up our Best Places to Retire online search tool, powered Onboard Informatics, which provides the underlying data. We searched for places that provide plenty of recreational and cultural activities, including museums, concerts, and outdoor spaces, and that also offer affordable housing and a reasonable cost of living. We also screened the data for locales with employers or industries that are generally open to hiring older workers, and especially sought places that offer jobs in the relatively recession-resistant education, health care, and government sectors. Each place also has a nearby college or university, hospital, and in-home and residential long-term care facilities.

College towns such as Madison, Wis., and Tallahassee, Fla., offer an ideal mix of amenities and affordability. Schools give you a chance to stay intellectually active, host world class speakers, entertainers, and sports, and often provide great health care and cutting edge medical research. Many colleges allow retirees to take courses for free or a nominal cost. The University of Southern Maine in Portland , for example, waives tuition for Maine residents age 65 and older. In May, George Bilodeau, 76, received a bachelor's degree in industrial technology from USM without having to pay tuition -- his only expenses were books and fees. "I sat in a classroom with teenagers and people in their early 20s," says Bilodeau. "They accepted me as one of their own and I enjoyed it."

If you need or want to work in retirement, it's a good idea to find a place with a strong and diverse economy, such as Nashua, N.H., or Overland Park , Kan. In 2007, Shawn Slome, 57, got out of the outlet clothing business and opened an eco-friendly products store, Twig, in Chapel Hill, N.C. The year before, he designed and built a solar home. "It feels like my business has more purpose than money alone or profit," Slome says about his 1,800 square-foot store that's located in a shopping center with Whole Foods. "My staff really enjoys their work and feels like they are making a contribution, and I am enjoying my work because my staff is so upbeat about working -- it has really improved my day."

You can also stretch your nest egg by moving to a place with a lower cost of living than where you live now. If the city has convenient public transportation, you can save even more by going car-less. Annette Mills and David Eckert sold their car two weeks after they moved from Falls Church, Va., to Corvallis, Ore., when they retired in 2006. The couple now gets around using a combination of bikes, public transportation, and walking. "Every time I get on my bike, I feel like I am eight years old again," says Mills, 61, who carries groceries home from the farmers' market and local food co-op in her bike baskets. Biking allows the couple to incorporate exercise into their routine as well as save money. "It is phenomenal all the bills that we don't have anymore," says Eckert, 62, a retired documentary filmmaker. "It's like a huge burden has lifted."

The retirement locations on our list strike a balance between small-town charms and big-city amenities. Georgetown , Texas, for example, is nestled between the scenic Texas Hill Country and Austin, which is only a half hour away.

It would be difficult to run out of things to do in the 400-year-old city of Santa Fe . Anne Anderson, 62, a retired textbook salesperson, chose to stay in Santa Fe when she retired in 2008. An avid art fan, she volunteers at the New Mexico Museum of Art, Spanish Market, and the International Folk Art Market, among other places. "We have monthly meetings for docents and you sign up for what comes in the door," she says. When she's not volunteering, Anderson enjoys soaking up the city's culture. "Last night we were down on the plaza dancing. The night before, we listened to jazz at St. John's College sitting on the lawn," Anderson says. "If you want to do something every night of the week, you just have to choose what."

Check out these 10 great places to reinvent your life in retirement:

Chapel Hill, N.C.

Corvallis, Ore.

Fort Collins, Colo.

Georgetown , Texas

Madison, Wis.

Nashua, N.H.

Overland Park , Kan.

Portland , Maine

Santa Fe , N.M.

Tallahassee, Fla.