By Emily Brandon
Many baby boomers who haven't saved enough to retire well are contemplating delaying retirement. But if working into your 70s isn't possible (or appealing), moving to a place with a much lower cost of living can help stretch your retirement savings and finance a better quality of life.
A retirement income of $40,000 per year certainly won't go very far in Honolulu or Miami, but there are plenty of other places where it can fund a comfortable retirement lifestyle. If you're willing to relocate to a place with a low cost of living and affordable housing, this modest retirement income could give you access to interesting activities and top-notch medical care.
Producing a retirement income of $40,000 is a realistic goal for many retired couples, even those without a traditional pension. The average monthly Social Security benefit for a retired worker was about $1,230 at the beginning of 2012. For a married couple each receiving the average amount, that's a retirement income of just under $30,000 per year. Add to that a modest nest egg of $250,000, and that could bring your retirement income to around $40,000 per year, depending on how the money is invested, your drawndown strategy, and the inflation rate.
To find places where retirees can live well on less than $40,000 per year, U.S. News analyzed recently released 2011 Census Bureau data. We screened for places with the lowest housing costs for people age 60 and older, including mortgage payments for people who had one, other housing costs for people who have paid off their mortgage, and the typical rent for renters, as well as the proportion of their budget retirees spend on housing costs. Then, among the places where people age 60 and older spend the least on housing, we picked cities with the best amenities seniors will need, including major medical facilities, services for seniors, colleges, and cultural and outdoor activities.
Here are 10 great places to retire on less than $40,000 per year in 2013: