Retiring Somewhere Cheaper

Where do you want to retire and why? Those are important questions for anyone thinking about their retirement. For some it's an easy answer; they want to retire exactly where they are and do pretty much what they're currently doing, except more of the fun stuff. But for others, and for various reasons, deciding where to retire is just as important as when and how.

While there are numerous considerations when thinking of picking up stakes and moving in retirement, the cost of housing is often at the top of most people's list. If we could move somewhere cheaper, so the thinking goes, maybe we could retire earlier, live a little larger, have more fun, or maybe all three. And frankly for some folks, their best bet at a successful retirement is moving somewhere more affordable anyway. But where could you go? Is it all about finding somewhere cheaper? Where can you find that delicate balance of cost, weather, activities, lifestyle, etc?

While looking into these questions I stumbled across a recent report from WalletHub listing the 150 "Best & Worst Places to Retire". These lists pop up all the time, but this one seemed more robust than is typical. WalletHub gathered and scored 40 metrics to come up with an average score for affordability, activities, quality of life, and healthcare, for each city.

Much of the list contains cities you'd imagine, such as Tampa and Orlando, Scottsdale and Phoenix, Denver, and Austin. But the ranking of each was surprising. Some cities scored well on affordability, for example, but suffered from low quality of life and healthcare scores. This broader focus led to lesser-known cities scoring well overall, such as Pittsburgh and New Orleans, which both cracked the top 20.

As you might assume, Florida had three cities in the top ten (Orlando, Tampa, and Miami) and seven within the top 20. Arizona, another perennial favorite on these kinds of lists, only had one city in the top 20, Scottsdale. Cities like Honolulu and Madison, WI scored well overall due to high quality of life rankings (a score of one and 11, respectively) even though affordability was lower.

Interestingly, some of the cities with the highest affordability scores fared poorly overall due to lagging in other areas like quality of life and healthcare. Laredo, TX was deemed the most affordable city but ranked 57 overall after scoring poorly in activities, quality of life, and 149 out of 150 in healthcare. So, living cheaper isn't always better but it helps.

I was surprised to see that Santa Rosa made the list. Where did we land? 110 out of 150. In fact, California was entirely out of the top 20, with San Francisco almost there at 21. What helped the City by the Bay rank so much higher than Santa Rosa? Substantially better activities and healthcare scores. But what held both back was the unenviable status of being some of the least affordable places in the country to live.

We all know that living in Northern California is expensive, due mostly to housing costs. Here in Sonoma County, for example, house prices are 70% higher than the national average. According to the U.S. Census Bureau, in December the average sales price nationally for a home was $394,600 compared with $669,500 locally.

Now, some of this difference is due to the fires last October which, according to the Press Democrat, literally and figuratively changed the landscape for housing in Sonoma County. But housing costs were already abnormally high before the fires. How abnormal? Also according to the Census Bureau, the local median income in 2016 was about $68,000 versus about $58,000 nationally, or about 17% more.

An open question is how this 17% supports housing prices being 70% higher. (In a nutshell, this is the wealth gap we hear so much about.) But home prices hit an all-time high of $640,000 last summer, before the fires, so the trend of local housing being more expensive isn't changing anytime soon.

While this is frustrating for people trying to break into the local housing market, it's great news for current homeowners who might be considering selling and retiring somewhere else.

But just as with the Laredo example, it's not all about finding the cheapest place to live. Fortunately, according to WalletHub there's 109 possible landing sites that may offer a better balance of affordability and other lifestyle-related metrics.

If you're considering downsizing, resizing, or are just trying to find a change of pace in retirement, maybe check out the report link below and play with sorting the columns. It should at least give you an idea of where to start your search. And if you do you'll see that Santa Rosa holds the ten-spot for quality of life, which offers another part of the explanation of why it's so darn expensive to live here.

https://wallethub.com/edu/best-places-to-retire/6165/

Have questions? Ask me. I can help.