Wednesday, February 25, 2015

Where To Retire in the U.S. on Social Security Alone

The media is full of scary stories about how the Baby Boomer generation will never be able to retire because they have not saved enough money to supplement their Social Security.  It is easy to panic and feel that you have fallen into an impossible situation.

However, in the Yahoo! article, "The 10 Best Places to Retire on Social Security Alone," the authors provide a list of places in the United States where you can retire comfortably on the average Social Security amount of $31,000 a year for a couple.  They made it clear that this would not be a luxurious retirement, only that it would be possible to get by.

In addition, the article was based on the assumption that the couple would either have a paid-off mortgage or they would be paying the typical rent for that community.  In other words, if you are still making large house payments, even these areas are likely to be too expensive for you, based on only receiving the average amount of Social Security.  Shown below is the list from the Yahoo article.

Yahoo's List of the Best Places to Retire on Social Security

Albuquerque, New Mexico
Austin, Texas
Buffalo, New York
Columbia, South Carolina
Grand Rapids, Michigan
Jacksonville, Florida
Pittsburgh, Pennsylvania
Spokane, Washington
St. Louis, Missouri
Tucson, Arizona

You can find a link to the Yahoo article at the end of the article if you want more details about why they believe these cities were especially affordable.  Basically, all ten of them have relatively low housing costs and they have amenities that are appealing to senior citizens, including sports teams, senior centers, and high quality medical facilities.

I want to add that you do not have to move to the inner city of St. Louis or Pittsburgh, for example, in order to get the benefits of an affordable lifestyle in those states.  Most cities also have suburbs and small outlying towns in the surrounding areas that are also quite affordable.

In addition, I was pleased that this list included cities in temperate climates, such as Tucson, Jacksonville, Columbia, Albuquerque and Austin.  There is no reason for a couple to feel stuck in a frigid climate that requires them to deal with ice and snow on a regular basis in the winter.  There are many affordable places within the United States that also offer desirable lifestyles for senior citizens.

More Ideas for Affordable Places to Retire

When I read the Yahoo article and looked over the list for myself, there were a few things I observed.

*  All of the states on the list have MANY communities where people can find affordable places to retire.  Not everyone wants to live in a big city, especially not a crime ridden one like St. Louis.   However, most of the states of Missouri, Pennsylvania, Texas and Florida offer affordable housing ... and even the surrounding states.  Be sure to cast a wide net when you are looking for places to live.

*  Crime is particularly worrisome if you will be renting a cheap apartment in a big city.  It might be preferable to find a charming rental in a small town outside of the cities on this list.  I grew up in Missouri and lived in Texas for decades and I know there are hundreds of affordable small towns that are charming, friendly and within a reasonable drive of the larger cities on this list.

*  It is also important for people to realize that most couples can increase their Social Security to above the average amount simply by working an extra couple of years.  Therefore, they may be able to live on their Social Security alone and even afford a few little extras from time to time, as long as they are willing to defer their retirement a little bit.  There is no rule that says you have to settle for the average amount of benefits.  Many people have also found they can supplement their Social Security with fun part-time jobs.

*  For those people who have large house payments when they reach retirement, they have a couple of options.  If paying off their current mortgage is not attainable, they may be able to take the equity in their current home and use it to pay cash for a smaller home or condo.  Even if they cannot pay cash, they may be able to get a small, affordable, manageable mortgage that they will be able to handle after retirement.

*  Another option for people who are having trouble finding affordable housing is to check out the senior apartment complexes in their area.  Most cities and many mid-size towns have apartment complexes that are designed especially for older people.  If money is tight, you may even qualify for a subsidized apartment.  Contact your local housing authority or Department of Social Services to see what subsidies might be available.  I know of both single and married retirees who are living on Social Security alone in expensive areas like Orange County, California, but only because they receive housing subsidies.

The bottom line is that there are many options that are available to people who are just living on Social Security alone.  Do not feel that you have to limit yourself to only the cities on the Yahoo list.  There are many options available to you, as long as you are willing to search for them.  Millions of people retire every year in the United States with Social Security as their only or primary source of income.  You can find a way to do it, too.


The 10 Best Places to Retire on Social Security Alone

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Wednesday, February 18, 2015

Housing Costs Put Retirement at Risk

Your housing costs may be the biggest threat to your retirement.  Even if you have paid off your home prior to retirement, the cost of maintaining your home can remain high.  According to the Employee Benefit Research Institute, housing amounts to 43% of the expenses of retirees who are over the age of 75.

Danger For Those Who Still Have a Mortgage During Retirement

Part of the problem is the fact that most people are not paying off their mortgages before they retire.  In fact, the Consumer Finance Protection Bureau reports that about 30% of Baby Boomers still have a mortgage when they retire.  This has resulted in a higher mortgage delinquency rate for people over the age of 75.   The average person over the age of 75 who still has a mortgage currently owes about $80,000.  This can be an overwhelming amount for someone who hasn't worked in 5 or 10 years and is dependent on Social Security and a meager amount of savings.

The problem with owning a home when you are on a fixed income with limited resources is that, in addition to the mortgage, you will also have other housing expenses ... and many of them increase annually.  Among those expenses are property taxes, homeowners insurance, repairs, cleaning and lawn work.  In addition, utilities on a large home are likely to be higher than those for a much smaller property.  Furthermore, people who may have been able to do their own cleaning, repairs and lawn work when they were in their 60's, may find that they must pay to have these things done as they age.  As a result, the cost of home ownership may rise much faster than inflation.

Other Financial Risks Faced by Retirees

When housing costs are added to the fact that many people retire while still owing student loan debt, credit card debt and, sometimes, bills for medical expenses, retirees are advised to make significant adjustments to their lifestyles before they stop working.  If they don't, they risk going through foreclosure and bankruptcy later in life, when it could be even more traumatic for them.

If you are doing your best to set up a realistic budget for your retirement, you will want to read this report by the Social Security Administration:   Expenditures of the Aged Chartbook - 2010.  It contains a detailed breakdown of how people spend their money after retirement.

While you will want to read the chartbook for yourself, I wanted to mention that it shows the three largest expenses for retirees are housing, transportation and healthcare ... and those are all expenses that have been rising rapidly over the past decade.


The solution for high housing costs is obvious.  Many financial advisers recommend that people downsize their lifestyle prior to retirement.  This may mean moving to a smaller home, condominium or townhome.  For some people, they may wish to take in a boarder or sell their home and rent ... letting someone else deal with repairs and lawn care.

Whatever you decide is the right approach for you, make sure you are taking your housing costs into consideration when you plan your retirement.


If you are looking for additional retirement information and ideas about downsizing, click on the tabs at the top of this page.  They will link you to hundreds of additional helpful articles.

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Wednesday, February 11, 2015

Hopeful News for the Future of Medicare

The November, 2014 "AARP Bulletin" listed some encouraging news for people who are on Medicare or who expect to enroll in Medicare sometime in the future.  Steps are being taken to help Medicare remain solvent somewhat longer than originally expected, even if Congress continues to drag its feet in making funding changes to the program.  Here is a summary of what AARP reported:

Medicare Will Spend Less Than Projected

One of the reasons that the Congressional Budget Office originally predicted that Medicare would run out of money within a decade is because they anticipated that by 2019 Medicare would be spending $14,913 per year for each beneficiary of the program.

However, Medicare costs are not rising as fast as anticipated.  Recently,  the CBO has revised its numbers and now they only expect Medicare to spend $12,478 per year for each beneficiary by 2019.

That is almost $2,500 less per person than they originally projected and is great news for the solvency of the program.

How Medicare is Saving Money

Medicine and medical care has been changing over the past few years.  Hospital stays are getting shorter and, as a result of the Affordable Care Act, there are new incentives for hospitals to take better care of people the first time ... thus reducing the number of re-admissions.

In addition, we Baby Boomers have been taking pretty good care of ourselves.  The influx of younger, healthier Baby Boomers into the program is helping to keep costs down.

More Health Insurers Are Participating in Obamacare

While a few insurers have dropped out of the program, in 2015 they were replaced by 77 new insurers who were offered additional plans in 44 states.  While not all of these insurers will be offering Medicare Advantage or Medicare Supplemental plans, evidence indicates that the more insurers there are in the marketplace, the lower the premiums.  This is good news, both for people on Medicare as well as their younger family members.

More Insurers are Covering End of Life Conversations

The most expensive healthcare often occurs during the last few months of a patient's life.  Often they receive treatments that they do not want, can be painful, and will only minimally extend the length of their life, while decreasing their quality of life.

I saw this personally a few years ago when a 97 year old neighbor was put through open heart surgery.  She never returned home and was in pain during the remaining few months of her life, which she spent in a nursing home.

Now some insurance companies are paying doctors who want to have a conference with their patients about their end-of-life decisions, so that people can decide for themselves what they want to do ... before they are in a crisis situation.  The American Medical Association has also put in a request to Medicare, asking that they also consider paying doctors to discuss these issues with their patients.

There are several benefits to these discussions.  While encouraging end-of-life conferences could save money on unwanted medical treatments, the more important issue is that it will also enable people to have more of a say concerning the treatments they receive during the last few months of their lives ... and whether they want to spend that time at home or in a hospital or skilled nursing facility.

The Government is Cracking Down on Medicare Fraud

Another important issue for the future of Medicare is the effort to reduce Medicare fraud.  It costs the program billions of dollars and seems to be getting worse, rather than better.  In order to keep the program solvent, federal agents and prosecutors are putting more energy into prosecuting these cases.  The Justice Department is using Medicare billing data as one way of tracking cases of fraud.

Retirees who are concerned about keeping Medicare solvent should report any cases of of suspected Medicare fraud in their community.

If we want Medicare to be available as we get older, we all need to report any suspicious charges listed on our bills ... for example, for treatments we did not receive.   Medicare beneficiaries should also file a report any time they hear of someone who is getting kickbacks from doctors for agreeing to get treatments they do not need, or for agreeing to say they received treatments, when they did not.

If you are interested in learning more about retirement facts that could be helpful to you, use the tabs at the top of this page.  They contain links to hundreds of other informative articles.

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Wednesday, February 4, 2015

Popular Places to Retire

Towns With the Highest Percentage of Retirees

 Are you looking for a busy, active retirement in neighborhoods that offer a wide variety of activities and where many other people have already retired?  If so, you may enjoy living in one of the ten communities on this list that was compiled by U.S. News and World Report in late 2014.  These are towns that contain a high percentage of retirees.

Some of these communities are exclusively for people over age 55 ... such as Laguna Woods Village, California and Sun City, Arizona.  Other towns on this list have residents of all ages, but a much higher percentage of retirees than the other typical American communities.

While I am sharing this U.S. News list with my readers, I have to say that I do not agree that all of the towns on this list would appeal to the typical retiree.  Some of them are located in places with harsh climates where younger adults may have simply moved away ... leaving only the older residents behind.  On the other hand, some of these are places that are quite charming and you might love living there!

You'll want to do a lot more research before blindly choosing one of these communities, especially if you are basing your decision simply on the fact that a lot of the residents are over the age of 65!

Ten Popular Communities with the Most Retirees

Laguna Woods Village in Laguna Woods, California - This is the community where I have lived for the past ten years.  There are activities here for everyone ... from people who want to go line dancing or do synchronized swimming to those who want to take classes and learn to write their autobiographies.  One of the seven clubhouses is shown in the photo at the top of this article.  You can learn more about this community in the blog post I wrote about Laguna Woods Village.

Kings Point, Florida - Located on the Atlantic side of Florida, this community is surrounded by golf courses.  Almost 70% of the population is over the age of 65.  Florida is a very affordable place for retirees to live and it has been popular with senior citizens for decades.  There is no state income tax and housing prices in Florida also tend to be quite affordable.

Sun City, Arizona near Phoenix, Arizona - One of the earliest Sun City communities, this age-restricted community is affordable and perfect for those seeking an active lifestyle in the desert sun.  It has lots of amenities, including swimming, golf, clubhouses and a variety of activities.  However, if you have not spent a summer in Arizona, I suggest that you rent there before purchasing a home.

Pinehurst Village, North Carolina - With 43 golf courses in the surrounding area, Pinehurst is a golfer's paradise.  You can even drive your golf cart on the community streets in Pinehurst Village!  North Carolina is also becoming more popular with retirees who have decided that Florida is a little too far South for their taste. 

Bella Vista, Arkansas - Our daughters used to go to a summer camp in the Ozark Mountains.  It is a beautiful, pristine part of the country, ideally suited for retirees who like to hunt, fish and go boating in the gorgeous lakes.  There are also plenty of golf courses around, too.  Homes can be purchased for as little as $125,000, which is one more reason this mid-western community is popular with retirees.

South Yarmouth, Massachusetts - Although U.S. News and World Report listed this community because one-third of the residents are over the age of 65, there are things you should know about this Cape Cod community.  Our family used to spend the month of August in Cape Cod and loved it.  However, many people closed up the homes and left the Cape for the winter.  It can get bitterly cold in the winter and many of the restaurants and tourist facilities on Cape Cod are closed during the coldest months.  Second, the population decreases significantly during the winter months, so you might not have many neighbors if you plan to live there year around.  If these factors do not bother you, and you like to go fishing and sailing, then this could be the right choice for you.

Fredericksburg, Texas - This town is home to Texas Tech University, so there are many cultural events that retirees can enjoy.  It is also a charming, historic town in the Hill County, for those who are looking for a quaint small town where they can enjoy their retirement.  Home prices are quite reasonable and Texas does not have a state income tax, two factors that appeal to many retirees.  I have some friends who retired there about 15 years ago, and they have been very happy.

Ocean Pines, Maryland - This mid-Atlantic coastal community is near the more crowded, touristy Ocean City.  There are a variety of housing choices, including those both inside and outside of age restricted communities.  This is a popular beach-style retirement area for retirees with plenty of golf courses and other amenities for people who seek an active lifestyle.

Pahrump, Nevada - This town on the California border is about an hour's drive away from Las Vegas.  It is a sunny desert community that is not too far from Death Valley, California. Retirees need to consider these facts when they think about the long, hot summers in the California/Nevada desert.  While a high percentage of the residents may be over the age of 65, this may be primarily because younger people leave and move to more prosperous areas with more job opportunities.

Camano, Washington - Camano Island is a gorgeous community that is popular with both fishermen and artists.  It's just north of Seattle and is popular with retirees who want to live in a pristine, rural area.


If you are looking for other places to retire, use the tabs at the tops of this article to find links to hundreds of other articles.  In particular you will be interested in the tab "Retire in the U.S."

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