The 10 Worst Places to Retire

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Retirement is especially difficult if you live in a place with expensive real estate, high taxes, and steep healthcare costs. Retiring in a city with an inordinately high cost of living means you will have to save more money and invest more successfully just to make ends meet. Here are 10 U.S. cities where it's extremely difficult to retire well:

Here are 10 U.S. cities (listed in alphabetical order) where it's extremely difficult to retire well:

Bridgeport, Conn.

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In the Bridgeport metro area, which includes Stamford and Norwalk, people age 60 and older pay a median of $854 per month in rent. This monthly cost more than doubles to $2,440 for retiree homeowners who have a mortgage. And even those who have paid off their mortgages still spend a median of $984 per month in other housing costs, the Census Bureau found. Long-term care costs will also be out of reach for many retirees, with nursing homes costing a median of $427 per day and assisted living facilities charging a median of $5,953 monthly, according to a 2012 Genworth Financial survey. Connecticut is one of only 14 states that taxes Social Security income, with exemptions based on adjusted gross income. And pension income is also generally taxable at the state level.

[Read: Best Places to Retire for Under $40,000.]

Honolulu

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At first, it sounds lovely to retire to Hawaii and enjoy perpetually pleasant weather and ocean breezes. There are also some tax perks for retirees, including the ability to subtract Social Security benefits from your federal adjusted gross income, and retirement account distributions derived from employer contributions to pensions and profit-sharing plans are tax-exempt. But living in Hawaii is a far different experience from vacationing there. "We are far from anywhere, so to fly anywhere is much more costly. You don't have the option of driving six hours to be somewhere completely different. That really gets to people sometimes," says Lesley Brey, a certified financial planner for LJ Brey Inc., in Hawaii. "There are lots of things that are more expensive. Food is more expensive here. Housing tends to be much more expensive than people are used to." Senior citizens age 60 and older spend $2,118 per month on housing if they have a mortgage and $539 in other monthly costs if they have paid off their house. The typical retiree renter pays $953 per month. If you end up needing to live in an assisted living facility, it will cost you a median of $3,815 per month, and a semi-private room in a nursing home in Honolulu costs a median of $303 per day.

Los Angeles

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People often move to the Los Angeles area for the jobs, year-round sunshine, and beautiful beaches. And they tolerate the city's daily traffic congestion and sky-high rent to live there. Retirees who stay in the city pay a median of $1,003 per month in rent or $1,996 monthly in mortgage payments. The median costs for long-term care--about $195 per day in a nursing home or $3,600 monthly for care in an assisted living facility--are similar to national rates overall. It could be worth staying in L.A. for the medical care. The Ronald Reagan UCLA Medical Center is ranked third in the country for geriatrics, and the Keck Hospital of USC and Cedars-Sinai Medical Center are also both in the top 30 nationally. But you could certainly get by on a much smaller nest egg if you moved to a place with a lower cost of living. "There are definitely people who do want to stay here who are struggling to stay here because of the high expenses," says Jennifer Hartman, a certified financial planner for Greenleaf Financial Group in Los Angeles. "For some people, if they move elsewhere, that will free up resources that they could use to perhaps travel or pursue other hobbies that would otherwise just be going to property taxes and other expenses."

New York City

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Once they are no longer tied to a job in the New York City area, one of the first things some retirees do is leave town in search of more space, less traffic, and a lower cost of living. Many retirees also seek better weather than New York's often cold and snowy winters. You'll certainly leave behind the ability to see Broadway shows or have food delivered at 3 a.m. But you'll also avoid rents that run over $900 per month, mortgage payments that exceed $2,200, and the possibility of needing long-term care in Manhattan, which costs a median of $4,500 monthly at an assisted living facility. If you instead sold your New York-area home and moved somewhere more affordable, you could potentially buy a bigger property for less money and use the extra cash to pad your retirement savings. "If you are a city dweller, you are not used to driving everywhere, and there are a lot of services in cities. But there are also very high costs in a big city," says Karen Altfest, a certified financial planner and principal advisor for Altfest Personal Wealth Management in New York. "A lot of our clients have made themselves residents of Florida or other states because they can save a lot on taxes and the cost of living." But you might want to stick around for the medical care. New York has three of the top 10 hospitals in the country for geriatrics: Mount Sinai Medical Center, Hospital for Special Surgery, and NYU Langone Medical Center.

[Read: Need Income From Your Retirement Funds? Try These.]

Oxnard, Calif.

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Just 60 miles from Los Angeles, the seaside city of Oxnard is known for its sweet locally grown strawberries and year-round pleasant weather. But those simple pleasures don't come cheap in the Oxnard metro area, which also includes Thousand Oaks and Ventura, Calif. People age 60 and older with mortgages pay a median of $2,107 each month. Retiree renters pay about half that amount, but a still-pricy $1,148 per month. Retirees who have paid off their homes face a more reasonable $476 in monthly housing costs. The daily rate for a nursing home in Oxnard costs a median of $201, which is similar to the national median rate, but assisted living facilities cost an above-average $4,000 per month. As in other parts of California, pension income, including 401(k) and IRA withdrawals, is generally taxable.

Poughkeepsie, N.Y.

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Located midway between New York City and Albany, this Hudson River city has hot summers and cold winters that include sometimes significant amounts of snow. Housing costs for retirees are almost as high as those in New York City, costing people age 60 and older $1,918 monthly with a mortgage, $746 if they have paid off the house, or $979 monthly in rent. Long-term care expenses, while lower than those in Manhattan, still cost a median of $371 per day for a nursing home or $3,900 monthly for an assisted living facility. New York state does provide some tax breaks for retirees, including allowing them to subtract Social Security benefits from their adjusted gross income and exempting the first $20,000 of pension and annuity income for individuals age 59 1/2 or older.

San Diego

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This sunny city near the Mexican border has mild winters and warm summers. And the UC San Diego Medical Center is ranked 37th in the nation for geriatric care. Long-term care typically costs $213 per day for a nursing home or $3,075 monthly for assisted living, which is similar to the rest of the country. What makes it difficult to retire in the San Diego metro area, which includes Carlsbad and San Marcos, are the high housing costs. People age 60 and older spend a median of over $1,000 per month on rent and $1,971 monthly on their mortgages, although costs drop to $436 monthly for seniors who have paid off their houses.

San Francisco

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If you can't stand the heat, head to San Francisco, where you can expect cool and foggy summers and a rainy season in the winter. The city has incredible parks and beaches, and an excellent public transportation system that gives a significant discount to senior citizens. And the UCSF Medical Center is among the top 25 hospitals for geriatrics in the country. The city's big drawback is the cost of housing, which costs people age 60 and older a median of $1,034 in monthly rent or $2,227 in mortgage payments and other carrying costs. And only the wealthiest retirees are likely to be able to afford the steep $4,250 median monthly cost for an assisted living facility or the median $395 daily rate for a nursing home.

San Jose, Calif.

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The Silicon Valley area is the place to be for entrepreneurs, and you'll meet plenty of people with ideas for the next great start-up company. But retirees who didn't have the foresight to acquire a few hundred shares of a rock-star company before it went public are likely to be priced out of the housing market. Retirees with mortgages in San Jose, Sunnyvale, and Santa Clara pay an average of $2,266 per month, and renters are charged a median of $1,059 monthly. Healthcare costs could run $3,500 monthly for an assisted living facility, or $258 per day for a nursing home. Social Security benefits aren't taxed in the state of California, but retirement account withdrawals generally are.

[See 10 Golden Parachutes to Make Your Head Spin.]

Washington, D.C.

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There are lots of free things to do in the D.C. area, including admission to nearly all of the Smithsonian museums and the National Zoo. The hard part is being able to afford to live close enough to take advantage of these world-class exhibits on a regular basis. The typical renter age 60 and older spends $1,122 per month to live in the Washington metro area. Homeowners with a mortgage pay even more: a median of $1,974 per month. And even those who have paid off their mortgages face other housing costs amounting to $652 per month. Median long-term care costs are slightly higher than the rest of the country, typically costing $243 per day for a nursing home stay or $3,698 monthly for assisted living.



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