Baby Boomer Lifeboat   

      Tips for Comfortably Retiring on a Limited Income

Live Well in an Inexpensive Location

Relocate to an Area Where the Dollar Goes Further

One of the most effective steps Baby Boomers can take to live better on a fixed income is to relocate to an area where the cost of living is less.  This can result in dramatic savings without sacrificing your quality of life.  In fact, in many cases the quality of life significantly improves.

Many Baby Boomers live in relatively expensive areas, like San Diego, where home prices are dramatically higher than in the rest of the nation.  Just selling your home and relocating to more affordable areas may allow you to buy a new home for cash and still retain a nice nest egg to supplement Social Security or pension income.  And if the real estate market does not justify selling your residence now, you can always rent or lease it out until times are better.

Best Places in the U.S. for Baby Boomers on a Fixed Income to Retire

Yes, there are still places right here in the U.S. that are excellent retirement locations for Baby Boomers who must live off Social Security or a pension and have an additional small nest egg (401K, investments, etc.).  Obviously, you want to avoid areas with high housing costs or which are dependent upon expensive fuels for heating and traveling.  U.S. News and World Report has profiles of 1000 places for retirement, and lists the following "Best Places to Retire" in a feature from 2007:

This site even provides the capability for Baby Boomers to build their own list of spots based on your preferences in weather, housing costs, and more.

Forbes Magazine (Francesca Levy; 12/2/2008) Report - Most Affordable Cities for Families

Families earning the median income in some of America’s largest cities don’t earn enough to pay for much more than basic needs, according to Forbes magazine’s analysis of data from the Economic Policy Institute and the U.S. Census Bureau.

In other cities, annual costs for the basics are much lower, giving families a cushion for emergencies and the ability to enjoy some extras.

Here are the most family-friendly cities, using basic living expenses as a percentage of income:

San Jose, Calif. , 55 percent
Austin, Texas, 64 percent
Kansas City, Mo. 67 percent
Salt Lake City, 68 percent
Baltimore, 68 percent
Detroit, 68 percent
San Francisco, 68 percent
Seattle, 70 percent
St. Louis, 71 percent
Chicago, 72 percent

U.S. News & World Report (Oct. issue 2009)

U.S. News & World Report identified the ten best affordable places to retire (based on job availability, health and recreational facilities, and reasonable home prices) as (alphabetical order):

And check out this August 2009 AARP article on "Best Places to Live the Simple Life."

Within the past year, I visited Austin, Texas on a real estate business trip.  The city still has a solid economy, culture, entertainment and inexpensive housing.  I strongly recommend looking at Austin as a great place to retire and make your bucks go further.  Click here to learn more about Austin as a possible retirement location.

Retirement Home Bargains

The recession has a flip side for Baby Boomers.  Sure, it hit your savings and home equity hard, but it has also yielded a window of opportunity to pick up a retirement home at a bargain price.

According to data from Moody’s Economy.com and the National Association of REALTORS®, retirement meccas where prices have dropped significantly are :

1. Las Vegas: -51 percent
2. San Diego: -47 percent
3. Phoenix: -52 percent
4.Tampa, Fla.: -38 percent
5. Naples, Fla.: -27 percent
6. Myrtle Beach, S.C.: -16 percent

Source: Money Magazine, Michaela Cavallaro (07/29/2009)

Forbes magazine took a look at the nationwide condo market to determine where the best deals could be found. Because financing can be hard to get, prices on luxury models have fallen the most.

The magazine suggested that the best deals come from paying cash or at least putting down enough cash so the property can be purchased with a federally-backed loan.

It also suggested that buyers bid low. Since these properties are moving so slowly, even a lowball offer might be accepted.

Here are the top 10 best places for condominium deals and their ZIP codes, as determined by Forbes:

1. Olympic Village, Calif., 96146
2. Tahoe City, Calif., 96145
3. Terra Linda, Calif., 94903
4. Fisher Island, Fla., 33109
5. Dallas, 75205
6. Malibu, Calif., 90265
7. Bal Harbour Fla., 33154
8. Key Biscayne, Fla., 33149
9. Lake Forest, Ill., 60045
10. New York (Upper West Side), 10069

Source: Forbes, Matthew Woolsey (07/29/2009)
 

Rural Areas Offer Home Financing for Low-Income Baby Boomers!

Rural Housing Direct Loans are loans funded directly by the government.  They are available for low- and very-low income baby Boomers to obtain home ownership. 

You can get 100 percent financing. including repairs and renovations or to purchase a site and install water and sewage!  Mortgage payments are based on the household's adjusted income.  To qualify, your income can be as high as 50-58 percent of the average median income for the area in question.

This is a good deal for Baby Boomers who have suffered financial setbacks or live solely on Social Security.  Find out if you are eligible and learn more at the USDA Rural Development Website.

Recommended Websites and Reading for Baby Boomer Retirement in the U.S.

• Affordable Places to Retire in the U.S. - Lots of good information, but promotes communities in the South.

• Retirement Housing on Less than a Shoestring - One encouraging experience on www.SeniorArk.com, an informative Website for the 50+ crowd.

• Great Homes and Destinations - Good New York Times article about how Baby Boomers can live good simply by relocating to other desirable areas of the country.

• BestPlaces.net - Sperling's Best Places offers a wealth on information and even a "cost of living" calculator which compares cities.

• RetirementLiving.com - Searchable directory of retirement communities by location with detailed information for each ($24.95 annually).

• City-Data.com - THE place to go to investigate different locations in the U.S.  Zero in on a location and access demographic information!

• Austin Real Estate - Learn about Austin and find a Realtor who can help you.

Stretch your Income by Moving Abroad

With skyrocketing insurance costs, high gas prices, increasing food prices, substantial home ownership and rental costs, it is difficult to comfortably retire in the United States unless you have a monthly guaranteed income of several thousand dollars.  But what if you could retire to an area where a relaxing lifestyle can be enjoyed for just $1,200 monthly, and you can live very well (with maids and gardeners) for, say, $2,500 monthly?  Interested?

Obviously, you probably won't find these places within the United States.  Moving to another country where the cost of living is low offers substantial benefits for those without a large financial nest egg.  Life can be good...very good.  American enclaves often exist for those who are afraid of cultural shock and language barriers.  Health insurance and medical facilities are good.  Financial matters are easily handled.  Internet and phone service are uninterrupted.  Climate and scenery are outstanding.  The recreational activities you enjoy are readily available.  Safety is not a major concern - crime is typically less than in major U.S. cities.  And you are just a plane ride away from family and friends in the United States.

But it takes an adventuresome personality to move abroad.  And we advise not purchasing property until you have lived in your selected location for at least a year.  There are a lot of considerations, but even on a low, fixed income it is possible to retire like royalty in a low-cost paradise.

A good discussion of the pros and cons of retiring south of the border can be found at this AARP site.  And a good site to consider if you are serious (requires a paid subscription) is International Living.

We have researched two areas popular among American retirees - Mexico and Costa Rica.  There are, of course, pluses and minuses to relocating to these countries to enjoy a comfortable retirement.  Our careful screening has identified Websites that give you both sides of the picture and offer helpful resources for making your decision.  Click on one of the links below to learn more: