Study: This is the best U.S. city to retire in

Roughly two-thirds (63%) of Americans aged 55 and older say they plan to stay put during retirement, according to a 2016 survey from Freddie Mac. But housing can be incredibly expensive, and depending on where you call home, even basic living expenses can eat up your retirement savings quickly.

If your savings aren't quite where you want them to be (for example, if you're among the 42% of Americans with less than $10,000 stashed away for retirement), that expensive mortgage and those high taxes may become unaffordable once you retire. While one solution is to simply continue working and saving, not everyone is able (or wants) to do so.

Although you can slash your budget elsewhere, one of the most effective ways to save money involves packing your bags and retiring in a less expensive city. Choosing the right city, though, involves more than simply throwing a dart at a map or moving to the place with the most beautiful beaches. If you're moving for financial reasons, there are a few considerations to keep in mind.

The best U.S. city to retire in is...

According to a recent GOBankingRates study, the most retiree-friendly city in the United States is Fort Wayne, Indiana. Researchers looked at cities across all 50 states and examined four factors:

  1. Taxes: The average property tax and the dollar amount the average household pays, as well as Social Security taxes
  2. Living expenses: Mean home listing price and median home value
  3. Social Security: The amount the average beneficiary in the city receives
  4. Healthcare costs: The amount the average citizen pays in health insurance premiums

This helped determine which city is not only the least expensive, but also the best for retirees in particular.

Fort Wayne held the lowest average property tax bill of all the cities profiled at roughly $947 per year (a tenth of what homeowners in San Francisco typically pay), and the city earned an 81.2 on the Sperling's Best Places cost-of-living index (where the national average is 100) when it came to living expenses.

Compare that to some of the most expensive cities to retire in, and it's easy to see why the Indiana town is a good option for retirees. Irvine, California, for example, ranks No. 207 on Sperling's index, meaning the cost of living there is roughly double the national average. (For comparison, New York City has a ranking of 180.)

All that being said, it's important to do your own analysis to determine which city is the right fit for you. The GOBankingRates study only focused on four criteria, which may or may not be the most important factors in choosing a retirement city. For instance, the amount the average Social Security beneficiary receives in benefits each month is largely irrelevant to whether the city itself is a good place to retire, because the amount you receive in retirement benefits depends mostly on your income and when you choose to file -- not where you live.

Quality of life is another important factor that the GOBankingRates survey doesn't consider. Sometimes the most affordable place to live isn't the best place to live, and even if you're saving money, you still want to be happy. According to a study from WalletHub, Indiana ranks 35th in the quality of life category, which is based on factors such as the availability of jobs for those aged 65 and older, access to public transportation, crime rate, and the number of attractions like museums and theaters per capita.

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1. Create a Post-Retirement Budget

How much you spend in retirement might differ dramatically from what you spent during your working years. That's why pre-retirees need to create a post-retirement budget, said Emily Guy Birken, personal finance expert and author of "Choose Your Retirement."

"To do this, you will need to determine your retirement income, including how much you expect to withdraw from your investments and what you expect to receive from Social Security or a pension," she said. "Going into retirement without a post-retirement budget is a good way to overspend in your early years."

Do what you can now to ensure you're not someone who doesn't know how you're paying for retirement.

2. Test-Drive Your Post-Retirement Budget

Once you have a budget set, try living on your post-retirement budget for the year leading up to retirement, said Birken. Doing so "will help you acclimate to the changes" and "psychologically transition to your post-career life," she said. It'll also give you time to figure out if you're even ready for retirement or not so you can tweak your plan before the big day comes.

3. Avoid Lifestyle Inflation

The years leading up to retirement are when your income will likely be at its highest.

"Keep your budget the same in spite of salary raises," said Pauline Paquin, owner and founder of personal finance blog Reach Financial Independence. "That will boost your retirement nest egg and allow you to live on a fraction of your last income in retirement."

4. Reduce Living Expenses

"Start streamlining your lifestyle now in preparation for retirement," said Carla Dearing, founder and CEO of online financial planning service SUM180. "Take a close look at your monthly expenses and identify those items you can do without. This gradual approach will let you significantly cut your monthly expenses without feeling the shock of adjustment."

5. Check Your Savings Numbers

"Although this sounds like a no-brainer, it makes sense to double, triple and quadruple-check [your retirement numbers] before you abandon the safety net of a regular paycheck," said Robert Steen, enterprise advice director for retirement at USAA. "We recommend having roughly 10 to 12 times your final salary saved up before you start your retirement."

6. Identify Income Sources

Review and list guaranteed income sources — like Social Security, pensions and existing annuities — as well as income-generating investments such as IRAs, 401ks, taxable investment accounts and savings accounts, to get ready for retirement.

"If you have any doubts about your ability to cover any of your retirement expenses, or legacy goals, get some expert help," said Steen. "A financial advisor can provide additional perspective, advice and solutions to help you reach your retirement goals."

7. Plan Your Second Act

Some retirees pursue a passion project, while others seek a little extra income on the side to make ends meet. Dearing recommends using your last year of employment to plan for your post-retirement career.

"Build the skills, resources and professional network you'll need to earn additional income after you leave your current job," she said.

8. Coordinate Timing With Your Partner

"It is fun to think of retiring together and immediately embarking on your elaborate travel plans, but if you stagger your retirement, more of your retirement assets will stay invested," said Dearing. "You'll also have the continued benefits from one of your employers; the medical coverage alone might have a significant impact."

9. Boost Retirement Savings

"It can be difficult for many people to max out their retirement accounts throughout their working lives. But during your last year, strive to sock away as much as possible," said David Hryck, personal finance expert and partner with New York City tax law firm Reed Smith. Your last working year is the final opportunity to put away as much as possible and pad your retirement savings account.

10. Take Advantage of Catch-Up Provisions

"The government encourages saving in the final years leading up to retirement by allowing catch-up contributions to retirement accounts," said Daniel Zajac, partner with Simone Zajac Wealth Management Group. For people 50 years of age and older, the IRS allows a pre-tax deferral of $24,500 into an employer-sponsored retirement plan.

IRA participants age 50 and older who meet income requirements can also contribute an extra $1,000 per year. "I've never heard a retiree complain that they saved too much for retirement," Zajac said.

11. Consolidate Financial Accounts

It's easier to keep track of your investment income if your accounts are in as few places as possible. Hryck suggests consolidating financial accounts to simplify record-keeping and achieve easier cash flow tracking as you get ready for retirement.

However, he warns individuals to "consider the consequences from a tax perspective prior to making any moves, such as selling stocks or mutual funds."

12. Reduce Your Portfolio’s Risk Profile

"The worst time to take a negative in your portfolio is right before retirement," said Tom Till, financial professional and owner of APPS Financial Group, which helps families and individuals with financial planning. "It will directly affect how much you can live on during retirement."

Contact a financial planner or take an online survey to determine your risk tolerance and adjust your portfolio accordingly. "I have seen people have to work an extra two to four years because they failed to take this step when close to retirement," Till said.

13. Create a Distribution Strategy

The accumulation and distribution of assets require two entirely different strategies and, particularly for those with a long retirement horizon, there will likely be a need for simultaneous accumulation and distribution plans.

"It is key to work with someone who is knowledgeable about distribution in this phase of life," said Till. Distribute too much or earn too little, and you risk not having enough capital to make it through retirement.

14. Eliminate High-Interest Debt

The fact is that high-interest debt is one of the biggest threats to a retirement budget, even if it's well-funded.

"Credit card debt can carry an interest rate of up to 20 percent," said Till. "Student loan debt never goes away, and the government can choose to withhold your Social Security benefits if you have outstanding student loans."

15. Relocate for Retirement

If you're planning to retire elsewhere, Benjamin Sullivan, a certified financial planner with Palisades Hudson Financial Group in Scarsdale, N.Y., suggests moving or buying a second home while still employed.

"While many retirees can qualify for a mortgage, it's much easier to prove you have the income to support a mortgage if you make the move while still earning a full salary," he said.

16. Work Extra Hours

"Some pensions and severance payments are calculated based on the income you earn in your last few working years before retirement," said Sullivan. "Therefore, working additional hours or taking on additional projects in your final working years can give you extra income now and in the future."

In other words, a little extra hard work now can create a substantial payoff once you transition out of the workforce.

Click to find out which jobs still offer pensions.

17. Secure Long-Term Care Insurance

"Lack of adequate insurance coverage can lead to high unexpected costs that might cause you to go into debt," said Harrine Freeman, financial expert and CEO of H.E. Freeman Enterprises. The majority of bankruptcies result from an unexpected, expensive medical concern. Long-term care insurance can help defray the high costs associated with an unforeseen ailment or potentially needing long-term care.

18. Refinance or Pay Off Your Mortgage

"The thing you absolutely must do is straighten out your mortgage financing before retiring because you might not qualify with your reduced income after retirement," said Casey Fleming, author of "The Loan Guide: How to Get the Best Possible Mortgage." "If you don't do this, you might find yourself with too high an interest rate that you can't get rid of, too high a payment for your new, lower income or plenty of equity but no way to access it readily."

19. Declutter Your House and Mind

"Clearing our mental clutter is an essential step to getting ready for the next chapter in our lives, which often includes getting rid of stuff," said Catherine Allen, co-author of "The Retirement Boom: An All-Inclusive Guide to Money, Life and Health in Your Next Chapter."

Not only are these items unlikely to be worth as much as you think, but the odds are also good that your family members won't hang on to them.

"Our kids and grandkids are minimalists and don't want to save Aunt Hattie's china or Grandpa Paul's stamp collection," she said.

20. Know How Your Income Affects Your Taxes

"When an individual's 'combined income' — defined as half your Social Security benefit, plus your other adjusted gross income — exceeds $25,000 as a single person, your benefit becomes taxable," said personal finance writer JoeTaxpayer. "Simply put, the tax burden on $30,000 of Social Security benefits and $20,000 from retirement funds will be far less than if the two were reversed."

Everyone's situation is unique, but a sit-down with a tax expert can help you to reduce your overall tax burden in retirement.

21. Know When to Start Collecting Social Security

Most Americans take Social Security before full retirement age, according to the Social Security Administration. "Once you start, it's irrevocable, and you can leave hundreds of thousands of dollars on the table," said Steen.

"For each year you delay benefits past age 62, you gain a 6 percent to 8 percent increase in lifetime annual benefits. That adds up quickly," Steen said. You can check your personal Social Security benefits at

22. Engage in Your Interests and Hobbies

Many pre-retirees forget to account for how they'll spend their time once they're no longer headed to the office each day. "Chart out your time both at the macro-level (annual vacations, trips, etc.) and at the daily level — what will you do immediately after waking up?" said Paula Pant, personal finance blogger and founder of Afford Anything.

If you fail to plan ahead for retirement hobbies, "you'll develop restlessness, spend too much money out of boredom and potentially jump back into the workforce due to a lack of anything else to do," she said.

23. Apply for a Reduced Real Property Tax Program

"Many of the elderly lose their homes due to the inability to pay their real property taxes and in some cases, the amount owed is less than $1,000," said Freeman. "Owing taxes during retirement will reduce your monthly cash flow and might put you in a financial bind that could take months to recover from."

Many states offer property tax relief for qualifying seniors, so do your research to find out what can be done with your taxes.

24. Renew Your Home Warranty

"Home repairs can range from hundreds to thousands of dollars per repair, and might lead to usage of credit cards if you cannot afford to pay for the repairs on your fixed income," said Freeman. An up-to-date home warranty can cover many unexpected repair costs, which can help keep a retiree from busting the budget.

25. Build an Ultra-Emergency Savings Account

"The standard advice for emergency savings accounts is to have six to 12 months' worth of living expenses. However, if you plan to no longer have earned income, increase your emergency savings to 18 to 24 months' worth," said David Auten and John Schneider of The Debt Free Guys blog.

"For the 12 months leading into retirement, cut your expenses and put all additional savings into your ultra-emergency savings account," they added. That way, it can help keep invested assets secure, if and when an unexpected financial emergency occurs.

26. Review Family Financial Obligations

An emotional drive to help loved ones financially can erode a nest egg.

"Helping out family and friends is great, but don't do it at the expense of your retirement savings," said Steen. "Outliving your resources is a real risk. So, even if you think you have the cash available, seek professional advice before making a decision."

27. Review Life Insurance Coverage

When you retire, you might lose the group life insurance coverage offered through your employer.

If you "still have financial obligations such as dependent children, a mortgage or a car loan, consider buying a private life insurance policy if you're entering retirement with debt, or if you would lose benefits if you or your partner dies," said Steen.

28. Consider Healthcare Coverage

"Knowing exactly what to expect from your healthcare benefits is vital for retirees," said Birken. Fidelity has calculated that a 65-year-old retiring couple will need $275,000 for healthcare over the span of their retirement.

The first step she recommends is a meeting with your human resources department to find out if you're one of the lucky few who will receive employer-covered healthcare during retirement. If not, find out when your health benefits will lapse in retirement and, if you're under age 65 when you retire, you'll need to do to sign up for COBRA.

29. Get Organized

Organization doesn't just make your life easier in retirement; it also ensures loved ones can easily find key documents in case of an emergency and if you're unable to access them yourself.

"Compile critical information in a safe place, such as a fire safe," said Allen. "Keep paper copies of important documents, in case you lose the electronic."

You should also make a list of all your online accounts and passwords, such as your bank and investment accounts, so your family can easily find this information when the time comes.

30. Check Your Emotional Readiness

"Just because 'everyone' retires at age 65 doesn't mean you have to do the same," said Steen. Before leaving your career, ask yourself if you're retiring because it's something you look forward to or because it's something you expected to do at a particular age milestone.

If you're constantly asking yourself, "Am I ready to retire?" and never pulling the trigger, you might want to hold off on quitting your day job.

"If you are very unsure of the decision to retire, and have a choice, then don't do it," said Steen. "Working longer, perhaps at something new and different, can help you maintain yourself, both financially and mentally."



Choosing the right city for your lifestyle

There's no one-size-fits-all approach to choosing the best city to retire in. While Fort Wayne may look like a winner on paper, there are advantage and disadvantages to living there.

If you have health concerns, for example, it's a good idea to not just consider the cost of healthcare, but the quality, too. Although Indiana may have affordable health insurance premiums, the quality of healthcare ranks 41st in the nation compared to other states, according to WalletHub's report.

Similarly, if you plan to continue working during retirement, you'll want to check out the labor market for retirees in your potential city. Small, rural towns may be more affordable, but they also may not have as many options if you're looking for work. Browse job boards such as Indeed or CareerBuilder to see the types of listings that are posted in your potential city, then think about whether you would be happy working those types of jobs.

Also don't forget about the costs of long-term care. If you're moving away from family and won't have anyone to help take care of you as you age, you may need to move into an assisted-living facility -- and the costs can vary widely depending on where you live. For example, according to's 2017 "Best and Worst States to Grow Old" report, in Utah, the median annual cost of assisted living was $35,000, while North Dakota had median assisted-living costs of $129,276 per year.

It's also important to note that's survey ranked Indiana the second-worst state to grow old in, citing a lack of a sense of community. That's not to say that it isn't a good place to retire for some people, but it's important to examine your options from different angles and decide which factors are most important to you.

If you're struggling to start researching potential retirement locations, there are several resources that can give you a jump-start. As an example, can help you narrow your search, allowing you to sort through cities based on factors such as crime rate, cost of living, political views of residents, and access to restaurants, coffee shops, and parks.

Once you've decided on one or two potential cities, take them for a test drive. Spend at least a week or two in your preferred area of the city and pretend you're living there. Be critical at this stage and think about whether you'd truly be happy there. Talk to the locals and ask them whether they enjoy the city. Drive through the city during rush hour to see what traffic really looks like. And if you're hoping to join a church, synagogue, or other religious organization, you may even browse a few options or attend a service or two to see how it compares to what you're used to.

This is also a good time to get an idea for how much you'll be spending on everyday expenses. While housing expenses will be the biggest cost, don't forget about things like groceries, gas, and transportation. Sales tax may also take a bite out of your budget if you're moving to a city with a higher rate than you're used to, so during your trip, try to live like you normally do to get an accurate picture of how costs compare in your potential new city versus your current town.

You likely won't find the perfect city that checks every single box on your list of must-haves, but you can make an educated decision. By being strategic about choosing where to live during retirement, you can ensure you live your best retirement lifestyle while also making the most of your money.

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