Retirees these days are apt to move around; because retirees are healthier than ever before and can anticipate at least a few decades of active living, it’s become more and more common for a retiree to pick up and move to an entirely new location, in pursuit of new goals and dreams. However, in deciding on where to go, living costs are an important factor; most retirees are limited to fixed income, often much less than what they were making during their working years, and are therefore forced to pay special attention to their budget.
Retirees looking to move elsewhere should therefore do a cost of living comparison by city, identifying at least a few potential new destinations and running the numbers on living costs, comparing the numbers with living costs in their current place of residence. Information on comparative costs of living is available from a variety of online sources; many websites have calculators that allow you to directly compare one city versus another with regard to cost of living. Different sites emphasize different data, but all include major costs such as the average cost of a new home or condominium; prevalent interest rates charged; costs to rent a home; medical care and prescription drugs from local pharmacies; utilities; and other major and unavoidable expenses.
Additionally, different calculators take into account a wide array of day-to-day living expenses, including food (broken down item by item), pizza delivered to your home, a six-pack of beer, a haircut at a barber shop, appliance repairs and various other services, a newspaper subscription, clothing purchased locally, tickets to the movies, and much more. How much does it cost to go bowling in Austin versus San Diego?
Using this information, the calculators will usually produce their results as a percentage — it costs 7 percent less to live in City B than in City A, but City C will cost 23 percent more.
Given the inconsistency of data, not to mention wide variations in a single metro area — the same pound of ground beef may cost you 20 percent less if you’re willing to cross town to hunt it down — the results can give you ballpark figures at best, but at least they’re a starting point. And, certain cities are consistently more expensive than others. Generally, the largest cities are more expensive than mid-sized cities, given the wider variety of attractions available to residents; and for the most part, coastal cities are more desirable and more expensive than inland cities, with some notable exceptions.
It’s no surprise that New York tops most lists as America’s most expensive city to live in. Everything from real estate to gasoline to hot dogs costs more here. New York is a center of banking and finance, of arts and entertainment, of style and fashion; most career climbers aspire to “make it” in New York, as a sort of crowning achievement. Los Angeles and Chicago, the country’s second- and third-largest cities, are also in the top five. San Francisco offers tremendous natural beauty to a vibrant urban atmosphere, and is usually ranked the third or fourth most expensive city in America. Other cities in the top ten include Miami, Washington, Boston, and Honolulu. Expensive inland cities include Atlanta and Dallas.
At the other end of the budget, America’s cheapest places to live are mostly medium-sized cities in the south. Even though Texas’s metropolises are pricey, smaller cities in that state are among the most affordable in the nation. The state capital, Austin, is the largest city ranking highly as a cheap destination; there are many reasons other than affordability that make Austin a desirable retirement destination. Arkansas, Tennessee, and Oklahoma all have very affordable small cities. If you seek more variety, Las Vegas and Phoenix are two desert cities that have yet to snap out of the housing bust, so it’s a buyer’s market as far as real estate is concerned. And although New Orleans has largely recovered from the devastation of Hurricane Katrina, prices there are still down.
What about globally? According to cost of living surveys conducted by Mercer Human Resource Consulting, the Economist Intelligence Unit, and ECA International, New York, the most expensive city in the United States, ranks only #32 internationally. The most expensive city in the world is Luanda, in Angola; #3 is N’Djamena, the capital of Chad. These results are skewed, as the surveys consider what it would cost an expatriate to maintain his or her accustomed standard of living in the destination city. Chad is one of the world’s poorest countries, and local residents in N’Djamena patronize markets, services, and housing options that foreigners generally do not avail themselves of. Otherwise, cities in Switzerland and Japan (Tokyo is #2), as well as Hong Kong and Singapore, crack the top ten.
Cost of living is only one factor you should consider in choosing a retirement destination, but if you’re on a limited income, it’s certainly an important factor. Before committing yourself, be sure to spend considerable time — a few months at least — living in your potential new home, to ensure that it’s everything you hoped it would be.