William Parrott, founder, president and CEO of Parrott Wealth Mangement in Austin, feels that the attractions offered by downtown Austin—including daily music festivals and "superb" dining—combined with the areas' many lakes, rivers and hiking trails, and access to the arts and cultural offerings of the University of Texas, make the city among the nation's most attractive retirement destinations, along with places such as Las Vegas, Arizona and Florida.

"I don't think the price spread between Austin and Phoenix is that much different," Parrott said. "And it's certainly a lot cheaper than Southern California."

How low can retirees go in terms of savings to retire in Austin?

For a 65-year-old retiree who will be getting a monthly Social Security check, and who wants to buy rather than rent their own home, Fort feels the total minimum assets needed for a comfortable life amount to about $650,000 to $750,000. For a couple of the same age, he would add about $200,000 to that total.

About $250,000 of that would go toward the purchase of a home, which Fort feels is doable in areas outside of downtown Austin. For that price, he said, a retiree should be able to find a home with 2,100 square feet of living space and two to three bedrooms. People may even be able to find such a home for a cheaper price the farther they're willing to live away from the city center, he added.

The abundance of housing construction in the Austin area, he said, has made affordable housing easier to find.

"Austin has a large surrounding area that has seen a lot of growth," he said. "The city has grown into almost multiple cities."

While Parrott agrees half a million saved for retirement can get it done in Austin, such a person would be forced to retire with a "frugal lifestyle." He recommends that a 65-year-old person have $1 million to $1.2 million in savings for retirement in Austin. That will ensure an annual income of $75,000, when Social Security is included, and allow retirees to fully enjoy the city lifestyle, he said. Parrott recommends between $1.5 million and $2 million for a couple of the same age.

With all that said, there is one other thing about Texas that retirees need to consider: the weather.

"The weather is the only thing people might complain about," Fort said. "It can get really hot in the summertime."