Traveler:
I, like Salaryguru, live in Arizona. The Phoenix area has it problems, but parts of this state are a throw back to another era. Living in Phoenix is hard to get used to at first, as the seasons go from mild to hot to way too hot, but once one gets used to the "heat shock" (some do not) it is a great place to have as a base. There are older towns in the mountains north and east of Phoenix that, due to their elevation, have a very mild climate. My suggestions for someone looking to retire down here is to consider Globe - Miami, Superior, and the area just on the edge of the mountains east of Phoenix. These towns are nice, cheap, with old victorian homes and 19th and early 20th century ambiance from their heyday when mines nearby were busy building the country. All of the mines are shut down, but the towns are within an hour or so of Phoenix. It like living in a western movie set up in the hills. Real estate has surged in price in many locations, as the flow of cheap money has made rank speculation way too easy, but there are still relative bargains to find in the smaller towns, where the commute into Phoenix is more than an hour.
Lots of folks are settling south of Tucson in the Green Valley area, and if one wants a real bargain, Nogales and the adjacent area give you a US home base, with a short drive into Mexico for affordable healthcare, and an hour drive north to Tucson. The border is always been a mixed bag, with some real issues, but there are enclaves that are fairly safe. You just have to do your homework, and at least travel to see this part of the southwest for yourself.
Its not for everyone, but the people who live here really do enjoy the place. If you don't mind 4-6 hours in the car, you can drive to Las Vegas, San Diego, and Rocky Point Mexico, which is on the Sea of Cortez, and really laid back. The area of Sonora Mexico south of the border near the Sea of Cortez is remarkably remote, and the Copper Canyon south of the border is as profound an experiance as any landscape one would explore. Southern Arizona is not quite Mexico, but its not quite the US either. The Phoenix Metro area is amongst the fastest growth areas in the US, most likely due to a few of the points mentioned in these postings. It all seems to come togther for me when, after watching the weather channel during the winter and seeing the blizzards hit the midwest, with the cars dancing along the road ice, I stroll out to my pool to take in the sun while I enjoy an adult beverage. 8)