This article looks at the 25 best cities where you can retire on $5000 a month. If you wish to skip our detailed analysis on retirement realities, you may go to 5 Best Cities Where You Can Retire on $5,000 A Month.
Retirement Realities: From Longevity Literacy to Financial Strategies
According to a TIAA study, many Americans today don’t have longevity literacy, even though it is the very basis of a sound retirement plan. In particular, one-quarter of Americans have been found to underestimate how long a 60-year-old can live, posing a serious question mark on their preparedness for retirement. In this regard, CNBC reveals that 56% of Americans aren’t on track to save sufficiently for retirement because of the financial vortex they are caught up in, entangled in commitments like funding their children’s education, managing mortgage payments, and similar financial pressures. Consequently, 40% of seniors are projected to run out of funds during retirement, as noted by TIME.
Fidelity Investments reports that individual retirement accounts and 401(k) balances bring unfavorable tidings as well, witnessing declines as of Q3, 2023. On the other hand, withdrawals and loans are gradually on the rise. Their data reveals that the average 401(k) balance has declined by 4% from $112,400 in Q2, 2023 to $107,700 in Q3, 2023. In the same quarter, 2.3% of workers were also reported to take hardship withdrawals, an increase from 1.8% in Q3,2022. Adding to the challenges, the benchmark for a comfortable retirement is continually escalating, with The Charles Schwab Corporation (NYSE:SCHW) now setting this target at $1.8 million.
To make matters worse, potential retirees are skeptical of waiting until the full retirement age to start claiming their social security benefits. Given the uncertain future of the funds, many Americans are now choosing to take their benefits out early.
“We have a crisis of confidence in the Social Security system and it’s costing American workers real money. Fear about the stability of Social Security has people walking away from money that could improve their quality of life in retirement.”
– Deb Boyden, Retirement expert at Schroders
According to Schroders, an investment firm, 40% of people who haven’t retired yet plan to start drawing their social security benefits between the ages 62 and 65. This leaves the potential retiree with a monthly average benefit of $1,800 only, a sum that isn’t sufficient to last them each month during retirement. According to the survey, Americans believe that they would need an estimated $5,000 per month to have a comfortable retirement. For those who don’t have enough saved, relocating to cheaper destinations is one solution. For instance, West Virginia is the state with the lowest cost of living for retirees. The MERIC index states that the cost of living index of the state is 85.2, which implies that living costs are 14.8% lower than the national average.
Many US employers are also actively enhancing their retirement plans in the quest to retain talent and boost employee retirement security and well-being. 401(k) plans are by far the most popular option that is used for saving retirement money. Employees use these plans to deposit pre-tax compensation for retirement, thereby maximizing their contributions. In many cases, employers may match contributions as well. Some companies that have a good matching percentage include Amazon.com, Inc. (NASDAQ:AMZN), The Charles Schwab Corporation (NYSE:SCHW), The Boeing Company (NYSE:BA), and Google, to name a few.
Employees at The Charles Schwab Corporation (NYSE:SCHW) have the benefit of receiving a $250 contribution from the company on contributing their first $1. Meanwhile, the company also offers a full match on contributions of up to 5% of their compensation. In Google’s case, the company offers two match structures to choose from. The first option that Google offers is that employees can receive a remarkable 100% dollar-for-dollar match on contributions up to $3,000. On the other hand, they may choose a generous 50% match-up to the IRS contribution limit instead.
Regardless of the savings strategy you adopt, it’s crucial to factor in both your anticipated retirement age and expected lifespan to accurately determine the amount you need to save. Keep in mind that a prudent approach should ensure you have at least $5,000 per month during your retirement years.
An aerial view of Dubai, the 2016 epicenter of the technology industry.
Methodology
To compile the list of best cities where you can retire on $5000 a month, we have used several sources such as Nasdaq, Business Insider, among others, to get a consensus on the best cities for retirement on a $5,000 budget. We have also used expat forums to determine the best cities where retirement on $5000 is possible. In this context, we define ‘best cities’ as ones that can provide a high quality of life and safety. Many of the cities in our list are expensive, however, they fall well within a $5,000 monthly budget.
After picking consensus, we ranked the places on their average monthly rent (1-bedroom apartment) and average monthly living costs for an individual retiree. Scores were added, and the final Insider Monkey Scores were used to rank our list in an ascending order from the lowest scores to the highest. For places with the same scores, tie-breaking was done to outrank one over the other using average monthly rent, with the place with the lower rent outranking the other one.
Here are the 25 Best Cities Where You Can Retire On $5000 A Month:
25. Hong Kong, China
Insider Monkey Score: 12
Average Monthly Rent: $2,092
Average Monthly Living Costs: $2,504
Hong Kong’s famous East-meets-West culture, high safety levels, and world-famous attractions make it one of the best cities to retire on $5,000 a month. According to the 2023 Safety Index by Global Residence Index, Hong Kong ranks 11th place out of 181 places, signifying high levels of safety and vanishing levels of crime.
24. Dubai, UAE
Insider Monkey Score: 17
Average Monthly Rent: $1,994
Average Monthly Living Costs: $2,976
The sunshine-filled city of Dubai offers a high quality of life for retirees. American expatriates have the option to retire in Dubai through the Dubai Retirement Visa, which allows eligibility through either purchasing a property valued at AED 2 million or maintaining financial savings of AED 1 million. The city is home to a diverse expatriate community and offers a unique blend of modern amenities and Middle-Eastern charm.
23. Singapore
Insider Monkey Score: 19
Average Monthly Rent: $2,387
Average Monthly Living Costs: $2,628
According to the Expat City Ranking 2022, Singapore ranks 10th out of 50 cities, with high scores in Quality of Life and Ease of Settling in indices. Knoem’s healthcare efficiency index ranks the country’s healthcare as 2nd best in the world. Singapore is safe, boasts excellent infrastructure, and is also famous for its multicultural environment. A permanent residence can help retire to the country.
22. Stockholm, Sweden
Insider Monkey Score: 19
Average Monthly Rent: $1,516
Average Monthly Living Costs: $2,473
Stockholm, the capital of Sweden, is an epitome of beauty. Retirees appreciate it for its high quality of life, cultural offerings, and modern amenities. Public transportation is one of the best in the world, and the locals appreciate the living conditions in the city.
21. Lisbon, Portugal
Insider Monkey Score: 20
Average Monthly Rent: $1,365
Average Monthly Living Costs: $2,320
Portugal is ranked 4th in the 2022 Internations Expat City Ranking, and expats there say they’re the happiest living in its capital city, Lisbon. The coastal capital city is one where an individual can retire on $5,000 per month. Even after spending on rent and living expenses, there is ample room for leisure, dining, and other entertainment expenses. The city enjoys a Mediterranean climate and boasts the warmest winters in Europe.
20. Barcelona, Spain
Insider Monkey Score: 21
Average Monthly Rent: $1,337
Average Monthly Living Costs: $2,413
Barcelona in Spain enjoys a rich cultural scene, striking architecture, and a Mediterranean lifestyle. Retirees appreciate its fantastic weather, high-quality healthcare, and outdoor lifestyle. The lively atmosphere, social events, and festivals add to the appeal of retiring here.
19. Vancouver, Canada
Insider Monkey Score: 22
Average Monthly Rent: $1,868
Average Monthly Living Costs: $3,172
Vancouver in Canada sits on the picturesque Vancouver Island and is ranked as one of the best retirement destinations in the world. The nation’s healthcare system is top-notch. The culinary scene is wonderfully diverse in Vancouver, and the city consistently ranks among the world’s safest and cleanest urban environments.
18. Bristol, United Kingdom
Insider Monkey Score: 23
Average Monthly Rent: $1,410
Average Monthly Living Costs: $2,800
Bristol is one of the best cities where you can retire on $5,000 a month. Even though the UK has closed its retirement visa, Americans can apply for family or ancestry visas. Bristol is revered for its historic architecture, green spaces, and harbor-side living. Retirees love to dine in waterfront restaurants, relish the scenic countryside, and enjoy the many events and festivals throughout the year.
17. Helsinki, Finland
Insider Monkey Score: 23
Average Monthly Rent: $1,074
Average Monthly Living Costs: $2,265
Finland is ranked as one of the happiest and safest places to live in the world. Helsinki, in particular, boasts a high standard of living, quality education, and excellent healthcare. Retirees enjoy the city’s cultural offerings, public services, and its urban and natural environment. A Finland residence permit can help expats retire here.
16. Copenhagen, Denmark
Insider Monkey Score: 24
Average Monthly Rent: $1,856
Average Monthly Living Costs: $3,602
Another city where you can retire on $5,000 a month is Copenhagen. The city ranks high in quality of life, offering good public services, healthcare, and infrastructure. The bike-friendly infrastructure is a particular highlight of his city. Denmark does not offer a retirement visa, so you will have to get a work visa or be a Danish citizen’s partner to move here. EU citizens can move here provided they prove financial self-sufficiency.
15. London, United Kingdom
Insider Monkey Score: 25
Average Monthly Rent: $2,704
Average Monthly Living Costs: $4,395
Retiring in London, UK, for $5000 means relishing a unique blend of cultural richness, diverse experiences, and access to world-class amenities. Seniors in London enjoy the city’s cosmopolitan lifestyle and historical treasures. Retirees can apply for work, ancestry or family visas to live here.
12. Canberra, Australia
Insider Monkey Score: 25
Average Monthly Rent: $1,836
Average Monthly Living Costs: $3,437
Owing to its clean and green surroundings, well-planned infrastructure, and numerous cultural institutions, retirees in Canberra live a fulfilling life in the capital city. The city offers retirees many outdoor activities, beautiful parks, and a sense of community, which in turn contribute to a high quality of life. Canberra’s moderate climate further enhances the appeal for seniors seeking a comfortable and pleasant retirement destination.
13. Seoul, South Korea
Insider Monkey Score: 25
Average Monthly Rent: $822
Average Monthly Living Costs: $1,466
Seoul in South Korea is another popular city to retire on $5000 a month. While the country doesn’t have a retirement visa, retiring to the country is possible by applying for a long-term visa instead. Besides a visa, expats also require some Korean language practice and cultural competency to live here. Featuring a vibrant cultural scene, excellent healthcare, and good public services, retirees get to enjoy the city’s cosmopolitan and tech-savvy lifestyle while savoring its rich history and delectable cuisine. Additionally, the city has a well-connected public transportation network and numerous parks, offering a high quality of life for seniors.
12. Auckland, New Zealand
Insider Monkey Score: 26
Average Monthly Rent: $1,013
Average Monthly Living Costs: $2,293
Offering a delicate blend of natural beauty and urban sophistication, Auckland is another popular retirement destination to retire on $5000 a month. Expats can retire here via the Temporary Retirement Visitor Visa, provided they are over 66 years of age and have NZD $500,000 ($462,641) to invest in the country. The city’s stunning harbors, diverse landscapes, and vibrant cultural scene help retirees live a high quality of life. Additionally, it is also known for its welcoming atmosphere, friendly locals, and numerous recreational opportunities.
11. Geneva, Switzerland
Insider Monkey Score: 27
Average Monthly Rent: $2,101
Average Monthly Living Costs: $4,041
Seniors who wish to live a life of high-quality can retire to Geneva via the Switzerland Retirement Visa. With careful planning and budgeting, an individual retiree can manage living in the city for $5000 a month. The city is renowned for its cultural richness, playing host to numerous international organizations, and also offering several museums and theaters to explore. Seniors enjoy quality healthcare, efficient public services, and a diverse culinary scene.
10. Sydney, Australia
Insider Monkey Score: 27
Average Monthly Rent: $1,823
Average Monthly Living Costs: $3,629
Sydney, Australia promises retirees a high-quality lifestyle. Expats can retire to Sydney through the Investor Retirement Visa. Owing to its diverse culture, excellent healthcare system, and temperate climate, retirees are quite satisfied living here. The city’s vibrant social scene, recreational opportunities, and access to nature adds to the appeal of retiring here.
9. Brussels, Belgium
Insider Monkey Score: 27
Average Monthly Rent: $975
Average Monthly Living Costs: $2,273
Brussels is home to a well-developed healthcare system, historic architecture, and delectable international cuisine. Additionally, the city’s diverse neighborhoods provide various living options, ensuring retirees find a suitable and enjoyable place to spend their golden years. A long-stay visa can help expats retire to the country.
8. Munich, Germany
Insider Monkey Score: 29
Average Monthly Rent: $1,216
Average Monthly Living Costs: $2,962
Known for its rich culture, picturesque surroundings, and high quality of life, Munich is one of the best cities where you can retire for $5000 a month. The city offers a range of cultural attractions, with many world-class museums, theaters, and historic landmarks to explore. Moreover, the city has efficient public transportation and well-maintained parks that create a retiree-friendly atmosphere. Expats need to acquire a temporary residence permit to retire to Germany.
7. Paris, France
Insider Monkey Score: 29
Average Monthly Rent: $1,105
Average Monthly Living Costs: $2,826
Paris is home to a rich culinary scene, encompassing charming cafes and gourmet delights. Retirees get to savor and even live the renowned French lifestyle in the city of love. Along with the city’s romantic ambiance, retirees receive world-class healthcare and public services, further contributing to a rich retirement experience. For a permanent retirement in the city, expats require a Long Stay Visa (Visa de Long Séjour).
6. Zurich, Switzerland
Insider Monkey Score: 30
Average Monthly Rent: $1,701
Average Monthly Living Costs: $3,920
Embraced by stunning landscapes and a relaxing ambiance, Zurich is a sought-after retirement destination. The city’s efficient public services, excellent healthcare system, and emphasis on cleanliness and safety make it particularly appealing to retirees. Its cultural diversity, along with its vibrant arts and music scene, further ensures that retirees enjoy their time here.
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Disclosure: none. 25 Best Cities Where You Can Retire On $5000 A Month is originally published on Insider Monkey.