You can retire sooner or with less savings if you are willing to significantly cut your expenses. One way to quickly lower your retirement costs is to move to a place with a low cost of living.
Reducing your housing costs can add to your retirement savings and make your ongoing bills more affordable. “Downsizing to a less expensive, more manageable house has numerous benefits,” says Paul Staib, a certified financial planner for Staib Financial Planning in Aurora, Colorado. “You could use the proceeds from the sale of your current home to add to your retirement savings, thereby providing a bigger source of retirement income, while significantly potentially cutting other housing-related costs, including property taxes, insurance, utilities and ongoing maintenance and management costs.”
U.S. News analyzed U.S. Census Bureau and Bureau of Labor Statistics data to determine where a retiree could cover his or her basic expenses, including typical costs for housing, food, transportation, health care and utilities, with less than $100 per day, or $36,500 per year, in retirement income.
It’s important to note that in many of these cities $100 a day just barely covered these five basic expenses. The analysis does not factor in the costs for recreation, clothing, consumer goods, hobbies or travel. A little extra income from savings or a part-time job would make you much more comfortable living in many of these places.
Housing costs are the biggest driver of retirement expenses, but they also vary considerably based on whether retirees rent, own or have paid off their mortgage, with homeowners who are living mortgage-free paying the lowest housing costs. “You can’t eliminate housing costs 100 percent because you still have property taxes to pay and insurance, but you could live with less if you find someplace that is cheaper for you to live or if you can get rid of your mortgage,” says Edward Fulbright, a certified public accountant and CEO of Fulbright Financial Consulting in Durham, North Carolina. It’s also important to factor in the transaction and moving costs when you relocate to a new city.
Here are 10 places where it’s possible to cover basic monthly costs on just $100 a day:
Aurora, Colorado. Aurora has 97 parks and over 5,000 acres of open space for hiking, biking and fishing. The Aurora Center for Active Adults has exercise equipment and fitness classes that Aurora resident seniors can use for as little as $18 per month, with further discounts available if you purchase your membership as a retired couple. The city also has a day trip program for retirees that provides low-cost excursions that might include transportation to a local hike, sporting event, concert or tour. Health care is available at the University of Colorado Hospital. Housing costs for retirees are $1,623 with a mortgage, $904 for renters and just $440 monthly with a paid-off house.
Cleveland. Located on the shore of Lake Erie, Cleveland’s reasonable housing prices for retirees include a median of $1,278 monthly with a mortgage, $652 per month if you rent and $478 each month if you own a paid-off house. And the bargain housing costs get you a high quality of life. The Cleveland Clinic is a top-ranked hospital for geriatric care. Music lovers will delight in attending events at the Rock and Roll Hall of Fame or the many free concerts at the Cleveland Institute of Music. And Case Western Reserve University has an audit program for senior citizens that permits those age 65 and older to take courses at a reduced tuition rate of $40 per credit hour.
Dallas. This city in the Lone Star State has many innovative programs specifically for retirees. The Senior Source manages the Retired Senior Volunteer Program, which helps connect seniors to volunteer opportunities that match their desires and talents. The Dallas Arboretum and Botanical Garden holds weekly events specifically for people ages 65 and older and offers a senior discount on admission. And the University of Texas Southwestern Medical Center is nationally ranked for its geriatric care. Retiree renters in Dallas pay a median of $911 per month, while homeowners pay $1,544 monthly if they have a mortgage or $518 per month if they are mortgage-free. Texas doesn’t have a state income tax, but remember to factor in the property tax bill when purchasing a home.
Durham, North Carolina. Durham is the home of Duke University, which includes Duke University Hospital, and is one of the corners of the research triangle, known for its high-tech research and development. People ages 65 and older are eligible to ride the Triangle Transit bus system free of charge. There’s also an affordable door-to-door van option for people with disabilities. Median housing costs for older homeowners are $1,420 with a mortgage and $456 without one. Retiree renters pay a median of $857 in monthly housing costs.
Jacksonville, Florida. Jacksonville provides pleasantly mild winters and is just a short drive from white-sand Atlantic Ocean beaches. But housing in Jacksonville costs far less than many other parts of Florida. Retirees age 65 and older pay a median of $910 monthly to rent an apartment in Jacksonville. That cost climbs to $1,340 among homeowners with a mortgage, but that dips to $433 for retirees who have paid off their house. There’s also no state income tax in Florida.
Kansas City, Kansas. There are many ways to live on less money in Kansas City. Google Fiber built a pilot fiber optic network in Kansas City, and after a one-time $300 installation fee, basic broadband is free for up to 7 years. The median housing cost for retirees is $1,388 with a mortgage, but that drops to $486 among people without a mortgage. The median rent is $772 per month. The University of Kansas Hospital is nationally ranked for its geriatric care.
Madison, Wisconsin. Wisconsin’s state capital is the home of the University of Wisconsin–Madison, where Wisconsin residents age 60 and older are eligible to audit classes for free. This college town is affordable for students as well as retirees. Housing costs a median of $1,624 per month with a mortgage, but it decreases to $622 once you pay off your home and $868 if you rent. There’s also plenty of scenic beauty. The city is located near five lakes — Kegonsa, Mendota, Monona, Waubesa and Wingra — which are popular for boating and recreation.
Minneapolis. Those who dream of a retirement on the water have many options in Minneapolis, which offers access to a chain of lakes and the Mississippi River. The Grand Rounds National Scenic Byway provides plenty of walking and bicycle paths to enjoy the parks and scenery. Housing for retirees in the Minneapolis metro area, which includes St. Paul and Bloomington, costs a median of $1,594 per month with a mortgage, $520 with a paid-off house and $843 if you rent. Health care is available at the Abbott Northwestern Hospital. In nearby Rochester, Minnesota, you’ll find the top-ranked hospital in the country for geriatric care, the Mayo Clinic.
Phoenix. Arizona’s state capital is among the sunniest places in the country and is known for its hot summers and mild winters. Whatever professional sport you enjoy, Phoenix is likely to have a nearby team to root for, perhaps including the Cardinals, Diamondbacks, Suns or Coyotes. Phoenix has its own branch of the Mayo Clinic, as well as the Banner Good Samaritan Medical Center. Housing costs a median of $905 per month for renters and $1,330 for homeowners with a mortgage, while people who own their home mortgage-free pay just $392.
Pittsburgh. Sports fans have many professional teams to choose from, including the Pirates, Steelers and Penguins. The UPMC-University of Pittsburgh Medical Center is ranked 11th in the country in geriatrics. But this city full of noteworthy museums and colleges continues to have affordable housing prices. The median monthly housing cost is $1,227 with a mortgage, $453 without a mortgage and $642 if you rent. Plus, Pittsburgh retirees age 65 and older are eligible to ride the bus, T or Monongahela Incline for free.
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