Thanks to increased costs of living, skyrocketing rental and real estate prices and unpredictable post-COVID inflation rates, maintaining a healthy retirement savings can be difficult. The average American saves approximately $609,000 in retirement funds by age 65.
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In some towns and regions, that sum could last a retiree several years, providing a very comfortable parachute into the golden years.
However, thanks to the many factors noted above, there are a number of expensive cities in which a retiree would far outlast their retirement funds, and be forced to return to work or find other income.
GOBankingRates recently amassed a list of cities in which retirees would find their savings accounts drained rather quickly due to dizzyingly steep mortgage rates that are commensurate with that area’s high cost of living.
If you have only average retirement savings, you’d be better served to rent or to live in less expensive cities than these.
Monsey, New York
- Average monthly mortgage: $7,445
- Annual cost of living: $118,091
- Years to draw down average savings: 5.16
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Garden City, New York
- Average monthly mortgage: $7,509
- Annual cost of living: $119,917
- Years to draw down average savings: 5.08
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Morgan Hill, California
- Average monthly mortgage: $8,363
- Annual cost of living: $127,215
- Years to draw down average savings: 4.79
San Francisco
- Average monthly mortgage: $8,355
- Annual cost of living: $127,744
- Years to draw down average savings: 4.77
Kihei, Hawaii
- Average monthly mortgage: $8,499
- Annual cost of living: $129,593
- Years to draw down average savings: 4.70
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Great Neck, New York
- Average monthly mortgage: $8,562
- Annual cost of living: $132,600
- Years to draw down average savings: 4.59
Kailua, Hawaii
- Average monthly mortgage: $9,158
- Annual cost of living: $138,379
- Years to draw down average savings: 4.40
Short Hills, New Jersey
- Average monthly mortgage: $12,445
- Annual cost of living: $176,050
- Years to draw down average savings: 3.46
Foster City, California
- Average monthly mortgage: $12,648
- Annual cost of living: $179,056
- Years to draw down average savings: 3.40
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Belmont, California
- Average monthly mortgage: $13,479
- Annual cost of living: $188,970
- Years to draw down average savings: 3.22
Greenwich, Connecticut
- Average monthly mortgage: $14,097
- Annual cost of living: $197,269
- Years to draw down average savings: 3.09
San Carlos, California
- Average monthly mortgage: $14,400
- Annual cost of living: $199,970
- Years to draw down average savings: 3.05
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Los Gatos, California
- Average monthly mortgage: $15,737
- Annual cost of living: $215,660
- Years to draw down average savings: 2.82
Burlingame, California
- Average monthly mortgage: $16,317
- Annual cost of living: $222,910
- Years to draw down average savings: 2.73
Hillsborough, California
- Average monthly mortgage: $30,603
- Annual cost of living: $394,440
- Years to draw down average savings: 1.54
Methodology: For this study, GOBankingRates analyzed cities across the United States to find the places where you are less likely to outlive your retirement savings. First GOBankingRates found the mean and median retirement account balance for 65-year-olds as sourced from the Federal Reserve’s Survey of Consumer Finances. Cities across the country with the highest cost of living indexes, as sourced from Sperling’s BestPlaces, were kept for this study. For each city, GOBankingRates found total population, population ages 65 and over, total households, and household median income, all sourced from the U.S. Census American Community Survey. To qualify for this study, each city had to have all data available as well as have a population of at least 10,000. Using this data, the percentage of the population ages 65 and over was calculated. The cost-of-living indexes were sourced from Sperling’s BestPlaces and include the grocery, healthcare, housing, utilities, transportation, and miscellaneous cost-of-living indexes. Using the cost of living and national average expenditure costs, as sourced from the Bureau of Labor Statistics Consumer Expenditure Survey, the expenditure cost for each location was calculated. The livability index was sourced from AreaVibes and included as supplemental information. The average single-family home value was sourced from Zillow Home Value Index for September 2024. Using the average home value, assuming a 10% down payment, and using the national average 30-year fixed mortgage rate, as sourced from the Federal Reserve Economic Data, the average mortgage was calculated. Using the mean and median retirement accounts value, the years to draw down those savings were calculated. All data was collected on and is up to date as of Oct. 7, 2024.
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This article originally appeared on GOBankingRates.com: 15 Cities Where You’re Likely To Outlast Your Retirement Savings
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