Retirees: Ditch These 20 Pricey American Cities — And Retire Here Instead
It’s an unfortunate reality that some of the best places to retire and the most affordable places to retire don’t have a ton of overlap. This leaves plenty of people struggling with the decision between getting the retirement they want and having to make painful cuts to their lifestyle.
However, while your first choice of location might be prohibitively expensive, a new study from GOBankingRates dug deep into the numbers to give you some more affordable options to consider for your golden years. The study looked at factors like the typical cost to purchase a home, the state tax laws regarding retirement income and several retirement expenditures, including the annual cost of an assisted living facility or home services. Taken altogether, it helps paint a picture of just how retirement-friendly — or unfriendly — each of these cities really is.
So, keep reading to get a look at which cities you should only consider if you’re ready to pay the steep costs and which will help you make the most of your retirement.
Last updated: Sept. 7, 2020
20 Cities Retirees Should Ditch
Of course, there are undoubtedly plenty of retirees living in each of these cities and having the time of their lives. However, there are many other Americans who want to retire somewhere cheap rather than spend their hard-earned nest egg on sky-high costs of living. For them, these pricey cities — despite all of the marvelous aspects of life they have to offer — are just not going to fit the bill.
20. Chula Vista, California
California might be best-known for the clusters of unimaginably expensive cities that surround Los Angeles, San Diego and the entire San Francisco Bay Area. In this case, Chula Vista sits just south of San Diego and its livability score of 70 is a lot lower than you might expect based on the median list price that clears a half-million dollars.
19. Anaheim, California
Speaking of those clusters of pricey places to live, Anaheim might be the home of Disneyland, but a median list price that’s over $600,000 would only make sense if you’re literally buying a magic castle.
18. St. Paul, Minnesota
This might come as a head-scratcher given St. Paul’s common perception of being the slower, more traditional alternative to swanky Minneapolis, but the Twin Cities area is one where high costs are unavoidable most of the time. So while the $232,646.86 median list price is the best among the cities to ditch, it also comes with a livability score of just 64. On top of that, Minnesota taxes Social Security income — one of just two states featured in this study with such a levy.
17. Long Beach, California
Long Beach is well south of Los Angeles, but it still features many of the high costs associated with the region with a median list price in excess of $600,000 and state sales tax rate of 7.25%.
16. Santa Ana, California
Staying in the Los Angeles-Long Beach-Anaheim metro area, Santa Ana’s $546,221.43 median list price is, well, actually not bad given its location in Orange County. But costly homes and high sales taxes help put this SoCal city on the “cities to ditch” side of things.
15. Jersey City, New Jersey
Homes in Jersey City list for a little under $575,000 on average. But that’s less notable than the high cost of senior care. It has the second-highest average annual costs for adult day healthcare, renting a semi-private nursing home room and renting a private nursing home room of any city listed here.
14. Aurora, Colorado
While the median list price of just under $365,000 puts Aurora among the least expensive cities to buy a home on this side of the list, the fact that Colorado taxes Social Security income, retirement income and has the highest local sales tax rate in this study limits the upside of its reasonably priced houses.
13. San Diego
A home in San Diego lists for just under $700,000 on average, which makes the half-million plus figure for Chula Vista look a lot better. Combine that with California’s 7.25% sales tax — the highest among all states in the study — and the costs of living in San Diego start to add up.
12. Minneapolis
While St. Paul isn’t exactly a cheap place to live, its reputation for having a bit more sanity than its neighbor across the river is clearly earned. Minneapolis has a median list price of $315,900 — low for this group of cities but still over a third more than it is in St. Paul.
Read: 15 Retirement Mistakes That Will Shrink Your Nest Egg
11. Stockton, California
Median list prices in Stockton average out to just over $300,000 a year, which is good. However, owning your own home might be a necessity given that the average annual costs for living in an assisted living facility come out to $420,000 — the highest in the study.
10. Denver
Denver’s low livability score of 62 and its state tax on Social Security income mean you’re probably not getting enough value for the median list price of nearly half a million dollars.
9. Irvine, California
Irvine is yet another SoCal city where you’re getting hit by that 7.25% statewide sales tax, but the median list price that’s just a hair short of $1 million might end up dwarfing the concerns about that extra money paid at the register.
8. Los Angeles
The last of the five cities in the greater Los Angeles area is — get this — Los Angeles. The City of Angels is really only affordable for people who have money raining down from the heavens — the median list price for a home here is over $825,000.
7. Boston
If you’re a big American history buff, the additional cost of living in the city from which the Revolution sprung might seem well worth it. But if you can take or leave the Old North Church or Bunker Hill, the average list price for homes approaches $750,000, and the highest average annual costs for renting a semi-private or private nursing home room will probably strike you as unreasonable.
6. Seattle
A home in Seattle typically lists for a little under $700,000 a year. And if shelling out that much for your house makes you think you’ll want to spend as much time there as possible, you should keep in mind that the city also features the highest annual costs for a homemaker or health aide.
5. New York
Again, if your dream is spending your retirement hitting up Broadway musicals, you might feel like living in the city that never sleeps is the only way to make that happen. But then again, you may opt to take the train in from outside the metro area when you consider that homes in New York average close to $800,000.
4. Oakland, California
Oakland’s high cost to own a home — over $685,000 for the median list price — might not be worth it based on its livability score of just 55.
3. Fremont, California
While the greater Los Angeles area has the most cities on the “ditch” list, the Bay Area holds all four of the top four spots. The median list price in Fremont clears $1 million at the moment.
2. San Jose, California
Even though San Jose is technically part of its own, separate metro area, it’s a safe bet that its sky-high costs have a lot to do with being so close to San Francisco and the booming tech startup business. In addition to a median list price of nearly $1 million, it has the second-highest costs for hiring a home health aide or adult day healthcare.
1. San Francisco
Shocking, well, no one, San Francisco’s astronomical costs make it one of the least appealing cities for seniors living on a budget. If nothing else, the study’s highest median list price — a mind-boggling $1.3 million — is shocking in and of itself. And all the more troubling when you consider that half the homes in the city list for more than that.
20 Cities to Retire To Instead
When your cost of living is comparatively small, it can translate to a lot more freedom in retired life. Regardless of how you want to spend your golden years, living somewhere that has cheap houses and lower costs for basic necessities gives you more flexibility to do whatever you want. As such, these cities might be great options for retirees looking to cut back.
20. Houston
Most Americans will likely have little trouble identifying the nation’s three largest cities, but they might need a few guesses before correctly naming Houston as the fourth-largest. Despite its huge population, costs are surprisingly low.
19. Arlington, Texas
The cost of renting a semi-private nursing home room in Arlington is among the lowest in the study, but with a median list price that’s just over $250,000, you might just opt to own your own place.
Check Out: How To Retire Early — A Complete Guide
18. St. Petersburg, Florida
St. Petersburg’s low costs clearly appeal to many retirees — it has the second-highest proportion of the population that’s 65 and older at 17.67%.
17. Jacksonville, Florida
Jacksonville actually has the highest average annual cost — including the “cities to ditch” — for adult day healthcare at about $25,000. However, its average annual cost for an assisted living facility is a mere $5,310 — the lowest in the study by over $20,000.
16. Greensboro, North Carolina
A combination of a median list price for homes that’s just over $200,000 and a statewide sales tax that’s under 5% help make Greensboro a great option for cost-conscious retirees.
15. Norfolk, Virginia
The average local sales tax in Norfolk is tied for the second-lowest in the study at just 0.35%.
14. Plano, Texas
While the $386,071.43 list price for a median home in Plano might seem high for the better half of this study, its livability score of 91 — the study’s highest by a long shot — indicates you’re likely getting a good value.
13. Memphis, Tennessee
Few cities in American history have had the profound impact on American culture as Memphis, home to both Staxx and Sun Studios where much of the most important rock and roll, soul and R&B in American history was recorded. However, even if you’re not a fan of classic soul, a median list price for a home that’s barely over $100,000 will likely be music to your ears.
12. Toledo, Ohio
While plenty of people may see Memphis’ list price for the average home and jump for joy, residents of Toledo might consider it just a little high for their tastes. That’s because this city on Ohio’s northwest border has homes that typically list for less than $85,000.
11. Richmond, Virginia
Richmond is also tied for the second-lowest average local tax rate at 0.35% in addition to a population where roughly 1 in 8 residents are over the age of 65.
10. Garland, Texas
In addition to being located in Texas — where there’s no tax on Social Security or retirement income — the costs of renting a semi-private or private nursing home room are among the study’s lowest.
9. Lexington, Kentucky
The only Kentucky city to land on this study is Lexington. It also has the lowest average local sales tax rate at 0%.
8. Virginia Beach, Virginia
Virginia Beach has the third-highest median list price on the “cities to retire to” section, but that comes with an average local sales tax rate of just 0.35% and a large senior population at 12.74% of all residents.
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7. Winston-Salem, North Carolina
While a livability score of 65 is a bit low, you’re getting a discount on your home price. Winston-Salem is one of the few cities where you can expect to be quoted a price under $200,000 for your new home.
6. San Antonio
San Antonio is the nation’s seventh-largest burg with a population that’s roughly equivalent to San Francisco and Boston combined. But, unlike those two cities, it doesn’t appear to be fighting a chronically low supply in the housing market — the median list price of under $250,000 means you can probably buy five houses in San Antonio for the cost of just one in San Francisco.
5. Hialeah, Florida
Hialeah presents an excellent chance to soak up the culture of South Florida without paying Miami prices for your home. And more than 1 in 5 residents is over the age of 65 — the highest proportion of seniors in the study.
4. Lubbock, Texas
Home to Texas Tech University, Lubbock allows you to take advantage of Texas’ lack of taxes on retirement income while still having among the lowest costs for renting a semi-private nursing home room or attending adult day healthcare.
3. Corpus Christi, Texas
You can live near the beach without spending a fortune provided it’s the Gulf Coast in Texas. The median list price is under $215,000, and it has the second-lowest average cost for adult day healthcare and the third-lowest average cost for homemaker services.
2. Laredo, Texas
Senior living in Laredo includes a lot of care options at prices lower than almost everywhere else. Laredo boasts the study’s lowest average cost for homemaker services and the second-lowest costs for a home health aide and adult day healthcare.
1. El Paso, Texas
El Paso has been in the news for a lot of the wrong reasons as of late, but the end result might be more people becoming aware of how this west-Texas city offers a great chance to live somewhere with relatively low costs, low taxes and low crime rates.
More From GOBankingRates
Methodology: GOBankingRates analyzed the top 100 U.S. cities in terms of the population according to the 2017 American Community Survey conducted by the United States Census Bureau to find 20 pricey American cities that retirees should ditch, and 20 lower-cost alternatives. GOBankingRates used the following criteria to rank the cities: (1) percent of population aged 65 or older, sourced from the 2017 American Community Survey; (2) the city’s January 2019–July 2019 median home list price, sourced from Zillow; average annual cost of senior care by metro area, broken down into costs for (3) homemaker services, (4) home health aide, (5) adult day healthcare, (6) assisted living facility, (7) semi-private nursing home room and (8) private nursing home room, all sourced from the Genworth Cost of Care Survey 2018; (9) livability score on a scale from 1-100, sourced from AreaVibes; (10) whether there are taxes imposed on Social Security benefits, sourced from AARP; (11) whether there is a tax imposed on retirement income, sourced from individual states and RetirementLiving’s: Taxes by State report; (13) state sales tax rate; and (14) average local sales tax rate, both sourced from Tax Foundation. All 14 factors were then scored, with the lower score being best, and combined to give a final score. Factor two was weighted three times and factors 10 through 13 were weighted 1.5 times. All data was collected and is up to date as of Sept. 6, 2019.
This article originally appeared on GOBankingRates.com: Retirees: Ditch These 20 Pricey American Cities — And Retire Here Instead
