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Where You Need to Be a Millionaire to Retire

Stashed in: Awesome, Virginia, Mississippi, Personal Finance, Retirement, Demographics

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Culture costs a lot of money! The difference between what you'd need to retire to the cheapest place in America -- McAllen TX -- and the most expensive -- New York City -- is almost $2mm in savings!

Retiring in Oakland requires more than a million dollars in savings?!

That place has changed, man.

They assume seniors would receive $17,189 in Social Security income annually and that healthcare will only cost $5k a year.

According to the Bureau of Labor Statistics (BLS) seniors spend an average of $10,907 annually on housing, $5,314 on food, $5,439 on healthcare and $15,589 on everything else (including entertainment, transportation and utilities). That adds up to total annual expenditures of $42,557.

It costs a lot of money to live.

I could drill down on these fascinating numbers forever. For instance, over $100/week per person on food? I spent $21 on food last week, and it was only that high because I don't eat cheap carbs because I'm still young enough to be vain. If I make it past age 65, I plan to do like Léa in "The Last of Cheri" and live on nothing but fried potatoes and revel in my fatness!

Or here's another gem: healthcare in SF costs 30% more than in other places. OK... but I have long suspected that people in big cities also get MORE healthcare than people in the country. If you're a cattle rancher in the middle of nowhere and you have a heart attack, you're dead... whereas if you live a couple miles from Stanford Hospital, you'll be seeing a big-name cardiologist every month for decades. This one could actually be wrong because I understand that rich people are more likely to reject living with lowered quality of life -- so, for instance, a larger percentage of people in Hattiesburg might elect for dialysis than an equal number of patients in Palo Alto -- but I'd be interested to know which is true.

I'm interested to know which is true, too.

I can't find a lot of data on the Internet about health cost tradeoffs depending on where a person lives.

Even the least expensive place in America (McAllen, Texas) requires $370,000 in savings.

Do most people have that when they retire??

Number 3 on the list is McHenry County, Virginia, at $384,000 in savings.

Number 9 on the list is Hattiesburg, Mississippi, a place that's near and dear to my heart.

SmartAsset’s analysis found that with a nest egg of $403,120, a senior in Hattiesburg could live comfortably off of Social Security and savings alone. That is based off of annual expenditures of $31,797 required to maintain the national average standard of living. Among the things retirees in the Hattiesburg area might enjoy doing: catching a show at the historic Saenger Theater, visiting the University of Southern Mississippi Art Gallery and watching the annual Hattiesburg Mardi Gras parade.

The numbers in this article seem to be assuming that a retired person would MOVE TO the location and have to procure housing. If you already live in a particular location and have paid off your home by the time you retire, the numbers are going to be very different for you.

Which is why many older people stay put in California despite the otherwise high cost of living.

A lot of people think that once you live in California, it's hard to go elsewhere :) But more to the point, I think most people want to live near their families if they have a choice. For instance almost all my aunts and uncles have 3 or 4 adult kids and all their grandkids living in the Bay Area, there is probably no amount of money they could save by moving to a cheaper state that would make it seem worthwhile. If you add in the fact that they're immigrants and want specialized services like Korean grocery stores, churches, and doctors... how practical would it really be for them to move to someplace like Hattiesburg?

Not practical unless they're willing to get their groceries shipped and live without churches.

Doctors they might be able to Skype but probably not. 

So yeah, they'd be giving up some things.

McAllen TX is the cheapest place in America?!  Geez, I used to work on community projects down there and didn't notice. 

Joyce, you wrote "... I spent $21 on food last week, and it was only that high because I don't eat cheap carbs ..."

I spend $21 on a single meal – how the hell do you get by on $21 a week for food!?

She's very careful about what she buys. 

I'm a really good home cook, including the ability to visualize recipes for any given ingredient -- even scraps. I read the flyers from the grocery stores every week to see what's cheap and in season. Last week there was a great deal on spaghetti squash, which I fixed carbonara style with bacon and eggs that I always keep around, plus ricotta that I made myself from a quart of milk and a lemon, plus a little bit of parmesan. This week I got two cauliflower for the price of one, which I will cook with Italian sausage and bitter greens and the rest of the parmesan... plus organic chicken was on super discount so I'll roast one and eventually turn the bones into chicken stock. I even froze the rind of the parmesan to put into minestrone some other time.

It doesn't take me very long to do any of this, in fact I feel disappointed most weeks because I don't have any excuse to cook the elaborate French braises and confections that I love to make! I bet I actually COOK less than 2 hours a week, not counting unattended time in the oven. I've seriously considered getting a boarder or Airbnb guests that I could stuff with boeuf a la bourguignon and coconut cream pie!

To be fair I do eat out for 5 of my lunches most weeks, but those are almost always salads -- and honestly I prefer my own salads, but the guys like to get out of the office at lunchtime.

I appreciate and applaud your culinary skills and kitchen efficiencies, but I'm a chef as well... and it just doesn't seem possible – especially buying anything organic – to live on $3 a day for food in the USA today...

How many meals do you eat a day?  

Where do you live and shop for food?  

I will especially have a harder time believing it if you live in CA:

Sunnyvale, California! I have two farmers markets, two Safeways, a Sprouts, a Trader Joes, a Ranch 99, a big Korean grocery store, several Indian shops, several Mexican shops, and soon a New Seasons and an Amazon drive-thru grocery within 5 miles.

Yes, I too shop at a Safeway substitute (Randalls), a Sprouts, Trader Joes (don't know Ranch 99), a big Asian supermarket (as well as Korean speciality markets), several Indian and Mexican shops – don't know about New Seasons and what the heck is an Amazon drive-thru grocery (discounts for Prime members?).

But I do have the world headquarters for Whole Foods here, am an owner at Wheatsville food co-op and also enjoy several farmers markets and fish mongers that bring in their seasonal items fresh weekly.

I still can't envision any of these getting me to $3 a day for food costs... can you share any example food purchases for comparison.  Maybe good, whole foods are really cheaper in Sunnyvale than here in Austin?

Here you go! Fresh hot data for you Rob.

Ranch 99 is a big chain of Chinese supermarkets out here. New Seasons is a grocery store I've never heard of, I think this will be their first outlet in California. And the Amazon thing:

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