Insider Monkey

25 Best US Cities Where You Can Retire on $2,000 a Month

Ghazal Ahmed
11 min read

In This Article:

This article takes a look at the 25 best US cities where you can retire on $2,000 a month. If you wish to skip our detailed analysis on navigating unanticipated costs and financial challenges during retirement, go to 5 Best US Cities Where You Can Retire on $2,000 a month.

Retirement Realities: Navigating Unanticipated Costs and Financial Challenges

Let's talk about Barbara for a minute. In her youth, she envisioned her golden years filled with relaxing spa retreats and exciting travel adventures. However, reality paints a different picture for her as healthcare costs take center stage, eating away a large chunk of her retirement income.

Just like Barbara, many retirees have the misconception that living costs drop drastically during retirement. However, the truth is that even though some categories of expenses do get lower, many others rise drastically. According to the US Bureau of Labor Statistics, the cost of medical care is 30% higher than it was a decade ago. Health View Services further reports that a healthy 65-year-old couple retiring in 2023 will spend nearly 70% of their lifetime Social Security benefits to cover their medical costs during retirement. This alarming trend puts retirees, even those with Medicare, at risk of outliving their savings due to such escalating costs.

"Many folks just assume Medicare is going to pay for everything but, in reality, it only covers about two-thirds of your costs," - Ben Storey, director, Retirement Research & Insights, Bank of America Corporation (NYSE:BAC)

Financial advisors at Merrill Edge, a subsidiary of Bank of America Corporation (NYSE:BAC), agree that healthcare can be a huge surprise cost. Expenses such as premiums, deductibles, critical services, and other out-of-pocket expenses often add up and eat a large chunk of your income. If worrying about your health wasn’t enough, an analysis from investment management company T. Rowe Price Group, Inc. (NASDAQ:TROW) reveals that home maintenance costs are another major expense that retirees do not account for during retirement planning.

In a survey comprising of 1300 American households, almost half reported a 25% increase in spending, a large chunk of which goes into mortgages and maintenance. Even if you manage to fully pay off your house, the costs for maintaining a house, as of 2023, stand at $17,500. Often times, these spending shocks expose retirees to what is known as the "sequence of returns risks."

“A bad sequence of returns in your portfolio could force you into having to spend less in retirement to avoid depleting your nest egg too quickly,” -Joe Toledano, Managing Director, Head of Insured Solutions, Morgan Stanley (NYSE:MS) Wealth Management.

Terms and Privacy Policy
Your Privacy Choices
Utah Privacy Notice

Recommended Stories