By Emily Brandon
If you don't have a traditional pension through your job and haven't been saving a significant amount in a 401(k) or individual retirement account, Social Security is likely to be your largest source of retirement income. Almost all retirees (86 percent) receive Social Security payments, and for over a third (36 percent) of retirees, Social Security accounts for 90 percent or more of their retirement income. The type of lifestyle Social Security alone will provide largely depends on how much you have earned in Social Security benefits and where you live.
The average Social Security benefit for retired workers was $1,294 per month at the end of 2013. A couple who each brought in this amount would have $31,056 in annual Social Security benefits, which will also be adjusted for inflation each year. U.S. News analyzed Census Bureau and Bureau of Labor Statistics data to determine where a retired couple age 65 or older could cover their basic expenses, including typical costs for housing, food, utilities, transportation and health care, on this amount.
[See: 10 Places to Retire on Social Security Alone.]
It's important to note that in most places, Social Security alone barely covered these basic expenses. After paying for those five major costs, retirees living on Social Security alone likely won't have much cash left over for recreation, hobbies, clothing, consumer goods or travel. "If they are highly dependent on Social Security, it is not an easy life," says John Palmer, a Syracuse University professor and former public trustee for the Medicare and Social Security programs. "If they own their own home and don't have high medical expenses, they can probably get by."
Retirees would often be much more comfortable if they had income from another source in addition to Social Security, such as personal savings, a part-time job or a traditional pension. Taking steps to maximize your Social Security benefit is also important. "Not collecting until you are in your late 60s, if you can do it, is a good idea," Palmer says. "For every year you retire earlier than that and choose to collect Social Security, your monthly benefit is about 7 to 8 percent less, and for every year you delay up to age 70, your benefit increases by 8 percent."
In expensive cities including San Jose, California, Honolulu and San Francisco, Social Security alone did not cover the basic costs retirees face. "I wouldn't want to try to make it just on Social Security in New York City or the D.C. area, but in a lot of the rest of the country, the cost of living is substantially lower," says Kenneth Robinson, a certified financial planner for Practical Financial Planning in Cleveland. "Moving has expenses that go along with it, but if you have relatives who live in a less expensive place than where you are now, you might want to consider a move."
In these cities, a household with typical expenses and two average Social Security checks coming in could get by on Social Security income. Here are 10 places where it's possible for retirees to cover basic costs on Social Security alone:
Albuquerque, New Mexico: Albuquerque homeowners age 65 and older pay a median of $1,078 per month if they have a mortgage and just $368 monthly if they have paid off the mortgage. Senior citizen renters pay a median of $686 monthly to live in Albuquerque. The city also provides many services to retirees who don't have a lot of extra cash. There are six senior centers where people age 50 and older can become members for just $13 a year. The Albuquerque 50+ Games is an athletic competition that includes bocce ball, tennis and pickleball exclusively for people 50 and older. And New Mexico residents age 65 and older can take classes at the University of New Mexico for just $5 per credit hour.
Austin, Texas: The low housing costs in Texas are drawing people to the state. A home in Austin costs retirees a median of $1,395 monthly with a mortgage and $545 if they own their home debt-free. The median rent for retirees age 65 and older is $887 monthly. Texas doesn't have a state income tax, but it's important to carefully consider the property tax you might face on any home purchase. This state capital city typically has mild and sunny winters that largely eliminate high heating bills, although you may pay significant cooling costs during the hottest summer months. Seniors age 65 and older even qualify for a tuition wavier on up to six credit hours at the University of Texas at Austin.
Buffalo, New York: If you can tolerate the cold and snowy winters in this upstate New York city, you'll be rewarded with a very low cost of living. Senior citizen homeowners pay just $466 monthly in housing costs if they have paid off their mortgage and $1,009 monthly if they are still making payments on their home. The typical rent for retirees age 65 and older is $611 monthly. The City of Buffalo also provides a senior discount card that entitles retirees to a percentage off their purchases when they shop at local businesses, including restaurants, salons and pharmacies.
[See: 12 Ways to Increase Your Social Security Payments.]
Columbia, South Carolina: South Carolina's capital city has 60 city parks and green spaces, and seniors can also get discount tickets to a variety of local attractions, including the Riverbanks Zoo and Columbia Museum of Art. South Carolina residents age 60 and older who are no longer working are also eligible for free tuition at the University of South Carolina. Housing remains affordable, costing retirees $1,074 monthly with a mortgage, $367 with a paid-off house or $801 in monthly rent. And Social Security income is not taxed at the state level.
Grand Rapids, Michigan: This small city is becoming known for its outsized art scene, which includes the Frederik Meijer Gardens & Sculpture Park, Grand Rapids Art Museum, Urban Institute of Contemporary Arts and the art competition ArtPrize. There are also plenty of opportunities for outdoor activities at the 74 city-owned parks with 1,210 acres of land, the Grand River and nearby Lake Michigan. Retirees age 65 and older pay just $684 monthly in rent. Older homeowners pay $1,080 monthly with a mortgage and $427 per month if their house is paid off. The city is also the hometown of U.S. President Gerald Ford and houses his presidential museum.
Jacksonville, Florida: Jacksonville offers balmy winters similar to other parts of Florida, but at much more affordable prices than Miami or Fort Lauderdale. Retirees age 65 and older pay a median rent of $861 per month. Older homeowners pay a median of $1,247 per month if they have a mortgage, which drops significantly to $405 once they pay off the house. The St. Johns River bisects the city and offers plenty of fishing and boating opportunities. Jacksonville is also a short drive from the Atlantic Ocean and boasts 22 miles of white-sand beaches. An added bonus: There's no state income tax in Florida.
Pittsburgh: Pittsburgh is a world-class city that isn't priced like one. Pittsburgh has several professional sports teams, noteworthy museums and several major colleges, including the University of Pittsburgh and Carnegie Mellon University. The UPMC-University of Pittsburgh Medical Center is ranked 13th in the country in geriatrics. But housing prices remain affordable. Senior citizen homeowners pay a median of $1,023 monthly with a mortgage and $434 when they have paid off their house. Retiree renters pay a median of $614 per month. Social Security income isn't taxed at the state level in Pennsylvania. Plus, residents age 65 or older ride free on the bus, T or Monongahela Incline, thanks to a program funded by Pennsylvania Lottery proceeds.
Spokane, Washington: The Spokane River flows through downtown Spokane and can be enjoyed at Riverfront Park, one of the city's numerous recreation areas for hiking and biking. Washington state does not have an individual income tax, and housing in retirement is affordable, costing just $419 monthly with a paid-off house and $1,139 per month with a mortgage. The median rent for people age 65 and older is $733 monthly. The city partially funds Project Joy, a group of entertainers age 50 and older who perform at assisted living facilities, retirement complexes and other venues.
[Infographic: Your Guide to Social Security.]
St. Louis: People who live in St. Louis know you don't need to pay excessively high housing prices to live in a place with professional sports teams, museums, gardens and parks. Home costs for seniors are $1,115 monthly with a mortgage and $434 per month with a paid-off house, while renters pay a median of $664 monthly. There are also services to help seniors get to doctor appointments and the grocery store, and the St. Louis Area Agency on Aging runs a program that connects senior citizens age 60 and older with volunteers and youth groups willing to provide chores that include yard work, painting and gutter cleaning at no cost. The Barnes-Jewish Hospital/Washington University is nationally ranked in geriatrics.
Tucson, Arizona: This Sonoran Desert city is surrounded by five mountain ranges and is famous for its enormous cactuses. Retirees can take in the giant saguaros at Saguaro National Park, where U.S. citizens age 62 and older can get a lifetime pass to this and other national parks for just $10. Yet this sunny city remains affordable. Monthly rent for people 65 and older is a median of $771. Older homeowners pay $1,095 monthly with a mortgage, but that drops significantly to $366 for people who have paid off their homes. The University of Arizona offers affordable classes for seniors through its Osher Lifelong Learning Institute. Plus, the state of Arizona doesn't tax Social Security income.
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