6 terrific towns on the water

Many baby boomers dream of retiring somewhere by the water. These half-dozen places are on a lake, a river or an ocean - yet they won't sink your retirement budget.

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Located two hours north of Seattle, Sequim (pronounced skwim) offers a lower cost of living and an easier pace than its burgeoning neighbor to the south. For about $300,000, you can get a three-bedroom house there.

Seafarers can head to the marina, a jumping-off point to explore the Puget Sound and the nearby San Juan Islands. Those who don't own a boat can ride the 30-minute ferry to Canada's historic city of Victoria or explore the coast by car, bike or foot. The Dungeness National Wildlife Refuge, a few minutes from downtown Sequim, boasts the longest natural sand spit in the U.S., a historic lighthouse, hiking trails and hundreds of species of birds. And the snow-capped Olympic Mountains loom just to the south - meaning Sequim residents can have lunch on the beach and dinner on the slopes in the same day.

What about that less appealing kind of H₂O - the kind that falls from the sky? Sequim is an anomaly in the Pacific Northwest: The town averages just 16 inches of precipitation a year, thanks to its location in the "rain shadow" of the Olympics. Sequim also has a whole lot of culture nearby, from plays at Olympic Theatre Arts to rotating exhibits at the Museum and Arts Center to live music at the Port Angeles Symphony Orchestra.

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