Retirees face the harsh realities of not generating enough retirement income to sustain current spending habits amid the worst inflation in four decades.
Millions of Americans living out their golden years are readjusting their retirement income and altering spending behaviors to survive the inflation storm sparked by the Federal Reserve and the federal government's spending spree during COVID that sparked inflation which has since become a significant policy error. The Fed has since unleashed the most aggressive quantitative tightening scheme in decades to tame inflation and could easily tip the economy into recession later this year or in 2023.
Financial turmoil has put retirees in a tough spot because they don't want to drain their savings and be forced to re-enter the labor market as Walmart greeters.
So if retirees want to maintain their current standard of living, there's a new study by GOBankingRates that has found the top metro areas where baby boomers can comfortably survive for less than $1,500 a month.
Still, living on a fixed income doesn't mean you have to miss out on a satisfying retirement. In the right place, you might discover that you can stretch your budget further and spend your golden years enjoying yourself. To help you find such a place, a GOBankingRates study identified American cities where you can realistically retire on a budget of $1,500 a month.
The study took the cost-of-living index from Sperling's Best Places and applied it to customer expenditure data from the Bureau of Labor Statistics to find the average cost of living in the given city. The average rent for a one-bedroom apartment in each city was also sourced from ApartmentList. Locations that fell below a certain livability score on AreaVibes or had a below-average portion of the population above 65 were eliminated, and only the places offering the best combination of bills under $1,500 and strong livability for seniors were left. - GOBankingRates
GOBankingRates found Odessa, Texas; Wayne, Indiana; St. Cloud, Minnesota; Lake Charles, Louisiana; Lawton, Oklahoma; and Lansing, Michigan, the most affordable areas where retirees could live out their golden years (currently) for less than $1,500.
- Total monthly expenditures: $1,385.63
- Livability score: 67
Odessa, in western Texas, is known for its oil rigs, Friday night high school football and a working re-creation of William Shakespeare's Globe Theatre. With the lowest average monthly rent on the list, $487, retirees should have a few dollars to spare for football or theater tickets.
Fort Wayne, Indiana
- Total monthly expenditures: $1,397.29
- Livability score: 80
Retirees who settle in Fort Wayne would find it affordable, as well as a great place to make friends. People ages 65 or older make up 14 % of the city's population. Rent averages $634 per month but healthcare costs are $453.83 a month — the second-lowest rate in the study.
- Cloud, MinnesotaTotal monthly expenditures: $1,404.64
- Livability score: 68
St. Cloud, about an hour's drive northwest of Minneapolis, has the lowest monthly healthcare costs on the list, an average of $444.71. The grocery costs are the highest, however, at $328.43.
Lake Charles, Louisiana
- Total monthly expenditures: $1,446.59
- Livability score: 69
Located along Interstate 10 between Houston and New Orleans, Lake Charles offers plenty of things for retirees to do, from enjoying museums to water activities to wildlife experiences. It is one of three cities on the list with an average monthly rent of less than $600 but healthcare costs higher than $500 a month.
- Total monthly expenditures: $1,483.75
- Livability score: 66
In Lawton, retirees can expect to spend a bundle on healthcare. Average monthly costs of $660.52 are higher than rent, which comes in at an affordable $519. The city of about 93,000 people has the lowest grocery costs in the study at an average of $304.73 per month.
- Total monthly expenditures: $1,485.48
- Livability score: 65
The average monthly rent in Lansing, Michigan's state capital, is $701 — the highest of the cities on the list. However, the average monthly cost of groceries, $308.45, is the second-lowest of the cities included here.