Yahoo Finance Retirement in Austin: 5 Reasons It Costs You Less Than $50,000 a Year
Finding a home in a sunny city might seem like too saturated a market for what your savings can accommodate. However, Austin, Texas is increasingly becoming a popular destination for retirees and retirement communities alike. Known for its vibrant culture, beautiful landscapes and warm weather, Austin offers an appealing lifestyle for retirees. What’s more, you can enjoy all that this bustling world-class city has to offer for less than $50,000 a year.
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GOBankingRates recently conducted a study to find places where people can retire for less than $50,000 annually. You don’t have to settle for small-town living — in fact, Austin, which is a popular tourist destination, as well as the state capital, offers plenty of options for retirees based on everything from monthly mortgage payments to annual expenditure estimates. Here are some key takeaways:
Total population: 958,202
Population of people aged 65 and up: 93,592
Average home value: $578,348
Average monthly mortgage payments: $3,470
Average monthly costs of expenditures: $1,898
Average monthly costs after Social Security: $3,504
Total estimated annual cost of expenditures: $22,780
Total estimated annual cost of living after Social Security: $42,045
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Why You Can Retire in Austin for Less Than $50,000 a Year
Though you might want to avoid downtown Austin to keep your cost of living more in check, there are many affordable neighborhoods in the Live Music Capital of the World. Here are five reasons why you can retire in Austin for less than $50,000 a year.
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1. Affordable Homes
Whether you currently live in Austin or are thinking of moving there upon retirement, it’s important to break down what you can afford in your housing budget. Even a master plan needs some financial wiggle room, as the average home value in Austin is over $500,000, and the estimated monthly mortgage payment is over $3,000. This isn’t necessarily on the cheaper side, but it does still factor into the total annual cost of living being around $42,000 — just under the $50,000 budget.
Real estate costs in many parts of the country continue to soar, and Austin is no exception, but it still offers a range of affordable housing options. From reasonably priced single-family homes in the suburbs to cost-effective apartments in the city, there are plenty of choices for retirees looking to downsize or relocate. Additionally, Texas has no state property tax, which can significantly reduce annual housing expenses.
2. No State Income Tax
One of the most significant financial benefits of living in Texas is the absence of a state income tax. This means that retirees can keep more of their Social Security benefits, pension and investment income, contributing to a lower overall cost of living.
3. Lower Healthcare Costs
Austin is home to numerous high-quality healthcare facilities that offer easy access to services at competitive prices. The city’s robust healthcare infrastructure ensures that retirees can access the care they need without exorbitant costs. Additionally, many healthcare providers offer discounts for seniors, further reducing expenses.
4 . Senior-Friendly Discounts, Recreation and Entertainment
Many businesses, communities and services in Austin offer senior discounts, from restaurants and retail stores to gyms and recreational facilities. Additionally, the city boasts numerous community programs specifically designed for seniors, providing low-cost or free activities, classes and social events. Austin also has a thriving senior community, as 9.8% of the population is of retirement age, so it’s not a shock that there are opportunities for socializing, volunteering and staying active.
Austin is renowned for its live music scene, outdoor activities and cultural events, many of which are low or no-cost. From the scenic trails of the Barton Creek Greenbelt to the vibrant festivals that occur year-round, there are countless ways to enjoy the city’s offerings without blowing through your retirement savings.
5. Affordable Monthly Expenditures
There are a lot of factors that add to your monthly bills. However, the more you can save overall on each expenditure, the longer you can stretch your retirement savings. In general, Austin has more reasonable pricing for everyday necessities.
Food costs: The price of groceries and dining out in Austin is generally lower compared to other major cities. The city hosts numerous farmers’ markets, where fresh produce can be purchased at reasonable prices. Additionally, many restaurants offer special deals and discounts for seniors, making it easier to enjoy dining out on a budget.
Utility bills: Thanks to Austin’s mild winters and generally favorable climate, utility costs are relatively low. Energy-efficient initiatives and the availability of renewable energy sources also help keep utility bills manageable. Retirees can further reduce their costs by taking advantage of programs and rebates offered by local utility companies.
Methodology: For this study, GOBankingRates analyzed major U.S. cities to find the places where you can afford to retire on less than $50,000 a year. First, GOBankingRates found the most populated U.S. Cities as sourced from the U.S. Census American Community Survey. For each city, a number of factors were found, including the total population, the population aged 65 and over, both sourced from the U.S. Census American Community Survey; the average home value from April 2024, as sourced from Zillow Home Value Index; the average Social Security benefits, as sourced from the Social Security Administration; the cost of living indexes, as sourced from Sperlings BestPlaces; and the livability index, as sourced from AreaVibes. All cities with a livability of 75 or below were removed from this study, as they represent cities with a low quality of life. The average national expenditure costs for residents aged 65 and over were sourced from the Bureau of Labor Statistics Consumer Expenditure Survey for residents aged 65 and over and used to calculate the average expenditure cost for each city. The average home value was used, and by assuming a 10% down payment and using the national 30-year fixed mortgage rate, as sourced from the Federal Reserve Economic Data, the average mortgage costs can be calculated. The mortgage and expenditures can be used to find the total cost of living for each city. Assuming a retired resident received Social Security benefits, the total cost of living after Social Security benefits was calculated. The cities with an annual cost of living above $50,000 were removed for this study. The top 100 cities by population with all correlating data were kept, with the rest removed, and the remaining cities were sorted by their total cost of living. All data was collected on and is up to date as of May 17, 2024.
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This article originally appeared on GOBankingRates.com: Retirement in Austin: 5 Reasons It Costs You Less Than $50,000 a Year
