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by Emily Brandon
Friday, April 3, 2009
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Most baby boomers don't have enough left in their 401(k) to kick back in Napa Valley or exit the mainland for Honolulu. Retirement dreams are being delayed and downsized. Even before the recession began, most Americans were behind on their retirement savings. And, let's face it, baby boomers are unlikely to recoup their losses anytime soon.
But there's a lot you can do to boost your retirement prospects by picking a low-cost locale. There are plenty of places where you can scale back your cost of living without reducing your quality of life. If you move to a city with a lower cost of housing than where you live now, it's a quick boost to your nest egg. In some cases, retirees can even get a better house for less money and reduce their tax bill, both of which will help your remaining retirement dollars stretch farther. "There's two factors that account for most of the difference in cost of living between two areas: housing and taxes, and housing more than taxes," says David Savageau, author of Retirement Places Rated. "You could flip a house in D.C. and go to Albuquerque or Iowa City and be better housed for one third the money and bank the rest and fund your retirement."
To find a few affordable retirement spots, we fired up our U.S. News best places to retire search tool. We sought out places with a low cost of living, giving considerable weight to affordable housing. But far from being out in the boonies, these places also offer access to arts and culture, sports, healthcare, and other amenities that retirees want and need in a retirement location. Every spot on our list has a median home price below $150,000, and many have important tax perks for retirees.
Sports fans will be drawn to the Division I sports at the University of Notre Dame. Admirers of the Fighting Irish have a block party in downtown South Bend, Ind., every Friday evening before a home football game. Ray McFadden, 88, a retired Dow Chemical Co. manager and his wife, Marion, 85, recently moved from Arizona to Holy Cross Village at Notre Dame, a retirement community affiliated with the university. "We are within walking distance of three colleges: Notre Dame, Holy Cross College, and St. Mary's," he says. "The activity level here is almost more than one person can handle at a time." Affordable housing is just an extra perk. The median South Bend home price, $81,396, will give you plenty left over to spend on hot dogs.
Here are 10 great affordable places to retire.
-- Binghamton, N.Y.
-- Chattanooga, Tenn.
-- Cocoa, Fla.
-- Eau Claire, Wis.
-- Montgomery, Ala.
-- Omaha
-- Pittsburgh
-- Roswell, N.M.
-- San Antonio
-- South Bend, Ind.
