Where people choose to retire can affect the duration of their retirement savings because of differences in the cost of living.
Where people choose to retire can affect the duration of their retirement savings because of differences in the cost of living.
It’s a simple concept. Residents spend more money in high-cost communities, and they spend less money in low-cost communities. It matters a lot for retirees on fixed incomes.
The implications can be substantial.
A $50,000 annual income in Seattle is comparable to a $26,686 annual income in Spokane, according to the Sperling’s Best Places website.
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The cost of living in Seattle is much higher, largely because of more expensive housing.
Marc Knauss, a financial adviser with Comprehensive Wealth Management in Lynnwood, says the average Social Security benefit is $16,320 a year.
A retiree living in Seattle on an annual income of $16,320 would have to tap $33,680 a year from other sources, such as savings, to hit $50,000. In Spokane, the same retiree would have to tap $10,366 from other sources to pay for a comparable lifestyle.
To compare the cost of living in various cities, check out Sperling’s Best Places at www.bestplaces.net and click on “compare cost of living.”
— George Erb