Are you ready to retire, hang it up after years of working?
With only three in 10 workers reporting that they are “very confident” they will have enough money for retirement, a new report on 2021’s Best & Worst Places to Retire, details the best places to retire.
To help Americans plan for a comfortable retirement without breaking the bank, WalletHub compared more than 180 U.S. cities across 48 key measures of affordability, quality of life, health care, and availability of recreational activities. The data set ranges from the cost of living to retired taxpayer-friendliness to the state’s health infrastructure.
|Best Cities to Retire||Worst Cities to Retire|
|1. Orlando, FL||173. Arlington, TX|
|2. Charleston, SC||174. Jersey City, NJ|
|3. Scottsdale, AZ||175. Detroit, MI|
|4. Tampa, FL||176. Vancouver, WA|
|5. Minneapolis, MN||177. Wichita, KS|
|6. Denver, CO||178. Rancho Cucamonga, CA|
|7. Cincinnati, OH||179. Spokane, WA|
|8. Fort Lauderdale, FL||180. Bridgeport, CT|
|9. Miami, FL||181. Newark, NJ|
|10. Atlanta, GA||182. San Bernardino, CA|
Best vs. Worst
- Scottsdale, Arizona, has the highest share of the population aged 65 and older, 24.30 percent, which is 3.2 times higher than in Irving, Texas, the city with the lowest at 7.50 percent.
- Brownsville, Texas, has the lowest adjusted cost-of-living index for retirees, 75.65, which is 2.6 times lower than in Pearl City and Honolulu, Hawaii, the cities with the highest at 195.83.
- Plano, Texas, has the highest share of workers aged 65 and older, 25.02 percent, which is 2.4 times higher than in Detroit, the city with the lowest at 10.57 percent.
- St. Louis has the most home health care facilities (per 100,000 residents), 68.79, which is 36.2 times more than in Fontana, California, the city with the fewest at 1.90.
Tips and Ideas for Retirement
What financial factors should retirees take into consideration when deciding where to retire?
“The largest shares of retirees’ expenditures are on housing, transportation, healthcare, food, entertainment, and taxes. So the costs of these should be considered when selecting a location. Housing is far and away from the largest cost for most retirees, so it is a primary consideration. Along with that go the level of real estate taxes, other property taxes, and income taxes which can be nasty surprises if not researched in advance. Be careful because states with no income taxes, which may sound desirable, often make up for that with high real estate and other property taxes. Utility costs, as well as taxes on gasoline, are also important as these are pretty much non-discretionary to retirees,” according to Deborah Allen Hewitt, Clinical Professor Emerita, William & Mary’s Raymond A. Mason School of Business.
“A little planning can help you boost your retirement income, even as you are approaching retirement. For example, monthly Social Security benefits increase when you delay claiming – it is a tradeoff, as you give up some benefits now in exchange for higher monthly benefits in the future. But for many people, delaying Social Security claiming increases the lifetime value of benefits…Also, working a little longer can have a big impact on retirement income if it allows someone to delay Social Security. This is a strategy you can use even if you are nearing retirement and have not saved enough,” said Sita Nataraj Slavov, professor, Schar School of Policy and Government.
How has the pandemic affected Americans’ retirement plans?
“Regardless of voluntary or involuntary retirement, the pandemic has impacted the already strained older workforce, at or near retirement. Many older workers fear a retirement future fraught with limited resources, limited income, partial health insurance, and limited opportunities to fulfill a productive and fruitful life on retirement. Some may even view retirement with few chances to return to the job market, if necessary once they resign. And for some, the pandemic has accelerated their retirement date,” said
Steven R. Applewhite, Ph.D., professor emeritus, University of Houston.
What is the biggest mistake that people make when planning their retirements?
“The biggest mistake is probably expecting returns in the stock market to remain positive and relatively high and costs of living to remain low. You need to plan for those years when the market declines by 15% to 25%, which happens about every 7 to 10 years. Will you have enough available cash to cover your expenditures without having to sell equities at these low periods?” according to
Deborah Allen Hewitt, clinical professor emerita, William & Mary’s Raymond A. Mason School of Business.
“I would say one of the biggest mistakes is not thinking carefully enough about when to claim Social Security. The stakes are pretty high. Delaying claims can boost lifetime benefits for many people. It is also important to remember that claiming Social Security does not necessarily need to be linked to retiring (stopping work),” Slavov added.