JOAQUIN DE HARO for TIME GOLDEN OLDIES: Some of Altea's resident retirees gather in front of the Vigin del Consuelo church

When Scotsman David Henderson decided to retire after a life of world travel as a professional photographer, he chose Altea — and not just because it was a picture-postcard town on Spain's Costa Blanca, with whitewashed houses, azure skies and turquoise waters. What sealed the deal was the friendliness of a stranger. "While we were looking at what would be my future house," he recalls, "a tiny old lady from up the street strolled down to see us. She stared at me for a moment and, with a wide, one-toothed smile, said: 'I'll be happy to have you as my neighbor.'" Three decades on, Henderson says Altea is still the best retirement spot in Europe. Amazingly, its population of retirees — they make up a quarter of the town's 21,000 residents — hasn't yet gotten out of hand.

Set on a promontory overlooking the Mediterranean, 60 km north of Alicante, Altea has opened its arms to foreigners looking for a peaceful place to spend their autumnal years. The town is hardly the only retirement haven on the Spanish coast. The qualities that make this area a magnet for young revelers — sun, sand and low costs — also make it ideal for their grandparents. Realtors do a brisk business in catering to elderly North Europeans, and scores of small towns have turned into cities for the superannuated.

What sets Altea apart is that it has made the transition without losing its soul. With its winding, narrow streets and flower-bedecked balconies, the old town seems little changed since the 16th century, when Altea's fortress was built to protect fishermen and peasants from corsair raids. At the top of the promontory, the town's main church stands out with its signature blue-and-white-tiled domes. Down below, its 8 km of pebbled beaches are unblemished by the noisy cerveza shacks common in other resorts. But the town's medieval exteriors conceal a host of modern amenities: two nursing homes, a health center and the Specialized Center for the Assistance of the Elderly, which has a rehab pool, massage therapists, mental-health specialists and a variety of other services subsidized by town and regional governments. "Foreigners get better health care here than in their home countries," says Per Svensson, 71, a Norwegian ex–real estate agent who has lived in Altea for two decades.

The town also tends to the seniors' cultural needs: every winter the 900-seat auditorium features performers like crooner Julio Iglesias, tenor José Carreras, conductor Mstislav Rostropovich and violinist Uto Ughi. And before you ask, yes, there's a golf club, nine holes, par 36.