With inflated prices making retiring on a fixed income more difficult, the personal-finance website WalletHub today released its report on the Best & Worst Places to Retire in 2024, as well as expert commentary, to help people find an ideal spot to enjoy their golden years without breaking the bank.
WalletHub compared more than 180 U.S. cities across 45 key measures of affordability, quality of life, health care and recreational activities.
Retirement-Friendliness of New York (1=Best; 91=Avg.):
- Overall Rank: 135th
- 176th – Adjusted Cost of Living
- 60th – Annual Cost of In-Home Services
- 118th – % of Employed Population Aged 65 & Older
- 17th – Recreation & Senior Centers per Capita
- 100th – Adult Volunteer Activities per Capita
- 49th – % of 65 & Older Population
- 103rd – ‘Mild Weather’ Ranking
- 8th – Museums per Capita
Expert Commentary
What are some tips for living on a fixed income during retirement?
“Those who have developed strong budgeting skills over time will benefit during retirement. It’s important for retirees to understand how their fixed income amount covers necessities (food, healthcare, transportation, etc.) and discretionary expenses. With this knowledge, retirees can make spending decisions to match their fixed-income reality. For retirees who have been fortunate to amass significant personal savings, it is important to have adequate funds readily available. Ideally, 1 years’ worth of living expenses (or more) in a “rainy day” account can be helpful during tough times but also can provide a strong sense of comfort and security during good financial times.”
Jonathon Ferguson – Financial Capability Specialist, University of Wisconsin-Madison
“Retirement experts say retirement can last up to 30 years. Plan to replace about 80 percent of your pre-retirement income because certain expenses will decrease in retirement. For people who have a fixed income in retirement, they can scout around for senior discounts, move to a lower cost of living state, or consider Section 8 senior housing. Currently, Americans do not save enough for retirement. Places of employment, the federal government, and states should do more to encourage retirement savings. Currently, low and moderate-income people are eligible for a saver's credit when they file their taxes.”
Joann Pinto – Professor, Montclair State University
What is the biggest mistake that people make when planning their retirements?
“Regretfully, many retirees do not have as many financial resources as they think they have. Defined contribution retirement plans require employees to invest the contributions they and their employers make each month. The great majority of workers, however, are not well-versed in making sound investment decisions. By retirement, their gross investment values often fall short of expectations. Be as diversified as possible in your investments, so that if one sector performs poorly, your other investments will help offset the losses. Many retirees take Social Security benefits far too early, before their full retirement age, as defined by the Social Security Administration. It deducts $1 from your benefits for each $2 you earn above $22,320 annually. In my opinion, this is one of the worst laws ever enacted by Congress, as it is a disincentive for older people to work. Anyway, make sure you are not going to continue to work if you take early benefits. Once you reach full retirement age, your earnings no longer reduce your benefits, regardless of earnings. Consider what inflation does to your assets and earnings. Many retirees do not budget for the costs of goods and services increasing over time. It has averaged over three percent per year over the 120-year period of 1900 – 2020. Healthcare is the single biggest category that deserves more consideration. Long-term care policies, health costs not covered by insurance, Medicare or Medicaid, and increasing healthcare costs far exceeding even the inflation rate can siphon off much of retirees’ assets. It is estimated that 50 percent of our healthcare costs occur in the first 75 years of life, and the other 50 percent occur in the few years we live after age 75!”
Randall Guttery, Ph.D. – Clinical Professor; Director Emeritus, Real Estate, Finance and Managerial Economics; Director Emeritus, Weitzman Institute for Real Estate, University of Texas at Dallas
“Not building their financial retirement plan on the basis of a very well thought out non-financial retirement plan. Ultimately, money is just a tool to help people live the lives that bring them joy. For this reason, the money plan should follow the life plan. Instead of defining retirement by the departure from their previous experience (ex: the challenges of their career or job), they should consider, in detail, how they want to spend time in retirement. For example, who will they spend time with? What activities will they participate in? Where will they spend time in retirement (specific locations)? What positive components of their career/job experience will they miss and how can they build these into their retirement experience?”
Jonathon Ferguson – Financial Capability Specialist, University of Wisconsin-Madison
Nearly half of American households have no retirement savings. What consequences will this cause in the future?
“This could lead to greater dependence on public programs such as social security retirement benefits, increased poverty rates among the elderly, enhanced caretaking and financial responsibilities by younger generations, etc. While the specific consequences and severity of those consequences can be debated, it is clear that low or no personal retirement savings among large groups of Americans is problematic.”
Jonathon Ferguson – Financial Capability Specialist, University of Wisconsin-Madison
“Sadly, it is true that over 50 percent of retirees on Social Security would be below the poverty line in America, were it not for their Social Security payments. When Social Security was enacted into law and signed by President Roosevelt on August 14, 1935, it was intended to be a supplement to workers’ other investments. This has not proven to be the case for many retirees, as many count this as their sole source of income in retirement. Consequently, many American retirees cannot afford an unexpected $400 repair. They may become financially dependent on their adult children, which in turn, may cause family strife. Life is expensive, especially in retirement. The key to not having underfunded retirement plans is to begin investing as early as possible. Even small contributions will grow over time, and as you earn more, investing will become easier financially, provided you do not increase your expenses because you earn more money. You likely have neighbors who have lived frugally and within their means; now in retirement, they can enjoy their Golden Years.”
Randall Guttery, Ph.D. – Clinical Professor; Director Emeritus, Real Estate, Finance and Managerial Economics; Director Emeritus, Weitzman Institute for Real Estate, University of Texas at Dallas