Many financial planners will tell you the best way to save for retirement and hopefully enjoy an early retirement age is to start young and consistently put aside a portion of your salary into a retirement savings vehicle. And some people certainly do that. But if you're like many of us, you didn't save as much as you could, and now you're looking for some last minute retirement options.
On one hand, you could save more. But that isn't necessarily a viable retirement options if you are already having trouble paying your living expenses. More immediate goals, such as paying your mortgage and health care bills, or helping out your children and grandchildren, may be stretching your budget. Around 58% of Americans age 55 and older have less than $100,000 in their retirement savings, according to the Employee Benefit Research Institute's latest Retirement Confidence Survey . Only 19% have $250,000 or more of retirement savings.
That means you may need to adjust your retirement age or consider relocating to a less expensive area.
Relocating? To many, that might seem drastic. You like where you live. You've built a life there. You're close to your children and grandchildren. But depending on where you live now, and where you move to, it could significantly impact your quality of life and permit a lower retirement age.
Such a move can even include warm weather and palm trees, but most importantly, moving from a high-cost area to one with a significantly lower cost of living. Doing so can make the difference between an early retirement age and working for several more years - particularly if you have significant equity in your home that can bootstrap your move. Let's say you have $50,000 a year to live on in retirement, and you currently live in Oakland, California. What will happen if you move to Bradenton, Florida? According to Bankrate.com , you can take a 33.21% decrease in your retirement income and still maintain your standard of living. Just compare some of the prices between the two areas.
Cost of living comparison
|Oakland, CA||Bradenton, FL|
In fact, there were only a few things that cost more in Bradenton than in Oakland, including energy, which was $120.69 and $167.03, respectively. (Guess it's all the air conditioning.)
The key, if you are considering this strategy, is to find a community with a solid economy as well as opportunities for an enjoyable lifestyle. The latter will depend on what you enjoy, but may include warm weather, access to cultural activities, or other retirees with whom you can socialize. So maybe there's a place that you will like with lower housing and living costs and will permit you to have the early retirement age you dreamed of.