Lived there for 4 years in college. I could certainly see retiring up there. Good atmosphere, lots of activities, restaurants, and bars to keep you entertained. And lots of cool events that are hosted at the university. Also lots of state parks and nature activities to do outside of town. Housing in State College is definitely expensive if you are right near down town. If you go a little further out it isn't that bad, and a lot of places are near the CATA bus loops so transportation isn't bad if you don't want to drive everywhere.
Just know if you do live near the university, especially behind Beaver Ave, expect loud noises and lots of drunks on the weekend. Comes with the territory