I lived in Flagstaff Arizona and it was beautiful - amazing outdoor activities and a fun historic college town. The only drawback is housing pries and rents were both quite high (higher than Phoenix). Lots of good rocks (Grand Canyon, Sunset Crater, Giant Meteor) and Navaho ruins nearby too :) I'd imagine with the university and number of professors loving in town the schools would be reasonable, although that could be relative (AZ schools are not as good compared to the US as a whole, due to low taxes - so a "retirement friendly" state might be at direct odds with good public schools). The snow put a bit of a damper on walk/bike ability - but I guess this is an issue in many cities/towns. Also the nearest grocery store to downtown was nearly a mile away. Downtown has more social/fun stuff which would be important if you were retired.