Figures for Your Retirement Haven
If you and your partner have an income of $36,500 a year, $100 a day, and taxes (city, county, etc) amount to 25 percent, you still have a disposable income of about $2280 a month.
Now, if you do not own a home free and clear, and want to buy instead of renting, you should be able to spend approximately 1/3 of your disposable income on a home. That’s allowing almost $750 a month for your payment to the financial institution for a home that could one day be all yours! Or, you can feel comfortable spending $750 on rent, or a bit more, because you won’t be paying taxes on the home, or the insurance!
If your home is already paid for, you only need to include taxes, insurance and upkeep… That shouldn’t be more than a couple of hundred a month… So your disposable income climbs back up! If you plan sell and move to a different community, you will have a nice chunk of cash to either purchase a smaller home and put the rest into an interest-producing income, or rent/lease, with the balance going again, into something that will produce extra income for you in retirement.
So, that leaves you $2280 minus $750, you end up with $1430 a month for food, insurance and the rest of total budget… Which by now, I hope you all have diligently worked out and written down in a place so you can review it often. That should make you feel pretty good!
I wanted to relieve some of your worries about just how much you are going to need to retire comfortably on. If, hopefully, you already have paid off your mortgage, you are sort of in the cushy driver’s seat!
If you are one of the more adventurous souls and intend to move out of the country, perhaps to Mexico, Puerto Rico, Panama, or one of the other “low cost of living” countries, you will pretty much live like a King and Queen with the income we talk about! In Mexico, you will actually be able to have a maid, a cook, and a gardener, if you want!
The AARP magazine claims the following cities have very low cost of living and are great places to retire in the States:
· Pittsburgh, Pennsylvania (My opinion – Dick and I lived in Altoona, Pa., years ago. Beautiful, great place to raise kids, but colder than heck in the winter…the snows were treacherous!)
· San Antonio, Texas (My opinion – Here, it can be very hot…you will have to use you’re A.C. or you will just melt. And the River Walk – Dick and I took the boat ride – you would not want to get the water on you – it was so dirty. But, friends say the shopping and restaurants there are great… Yes, true, but terribly expensive for the most… and we don’t do that much shopping in retirement. As I say – this is just my opinion, but it’s worth thinking about.)
· Omaha, Nebraska (My opinion – again, a great mid-west location to raise a family – good solid folks. You won’t need A.C. here, but a fireplace will be a great addition! You’ll need it during the long cold winters – not so great for arthritis.)
· Grand Junction, Colorado (My opinion – Beautiful area of the country. Great if you are into skiing- with wonderful skiing areas just a couple of hours away. But, at an elevation of 4,593 feet, I would not personally get enough oxygen – not too great if you have high blood pressure and at this age, we have exactly one friend who still goes skiing.)
· Gainesville, Florida (My opinion – It’s a pretty nice place. Can be hot and humid, but heck, I’m pretty used to that.) Has been rated high several times in the past as a good place to retire. U of Florida is there, so economy is fairly stable.
There are hundreds, and probably thousands of small towns around the U.S. that will give you a very nice low cost of living, albeit you may have to travel if you’re into museums and for entertainment /performances. If, over the years you have had enough of those things, you don’t need to travel much out of your comfortable little community. You still need to make sure medical facilities are good and nearby.
So, get your list going – decide on the temperatures you enjoy, set the altitude limits, determine if distance to family will have a bearing on the different areas, check out taxes, not every state has state taxes, and not every community has the same percentage taxes. It will take some work on your part, but it’s really worth it. You can find the perfect “retirement haven” for your wants and desires – get busy!
“I am not currently retired but hope to be in the next 2-3 years or so. We will be living on Social Security as neither my husband nor I have another retirement from a company or investments. I know we will be very limited. How about an article on the best places to live on very limited income. It would be greatly appreciated, I assure you! Sandy”
“I think your idea for a new website for possible retirees who feel they have to stay stateside is a great idea.
We have been fully retired for a while. One subject might be “What I wish I had prepared better before retiring.” Mistakes we made along the way and how to avoid them.
I am 74, my husband is 79. Although we tried Mexico for a year, my husband is not sold on it. We still have a mortgage and a car payment. Ugh! We are getting by on Soc Sec and a small pension each. But it is getting harder and harder to keep up with the rising gasoline and food prices especially. Ruth”
On Facebook? Comment on this post...
Barbie Parks is the publisher and editor of MoneySavingMexico.com. She is the author of Retire In Luxury: How To Retire Abroad And Live Better on Less and her latest book, Money Saving Mexico: How To Save Money On Everything South of the Border.