This article takes a look at the 25 best US cities where you can retire on $2500 a month. If you wish to skip our detailed analysis on navigating retirement in 2024, you may go to 5 Best US Cities Where You Can Retire on $2500 a Month.
Navigating Retirement in 2024: Insights, Challenges, and Strategies
Entering 2024, retirees will encounter a substantial reduction in their Cost of Living Adjustments (COLAs), amounting to less than half of what they received in 2023. The USA grappled with record inflation in the year 2022, prompting the Social Security Administration to announce an 8.7% increase in social security benefits for the subsequent year. This increase has been the highest in 40 years, with retirees receiving an average monthly boost of more than $140. Regrettably, benefits do not increase consistently each year, and even when they do, the increments may not necessarily match the levels of the previous year.
This means that the 71 million individuals receiving Social Security benefits in 2024 are poised to receive a Cost of Living Adjustment (COLA) mirroring the deceleration in inflation. This COLA for 2024 is set to be 3.2% only.
“Though it’s less than the COLA for the past two years, next year’s bump is more in line with the historical average increase. For the past two decades, the average COLA has been 2.6%. In more recent years, it has been as low as 0%.”
-Mike Lynch, managing director of applied insights Hartford Funds.
The 3.2% COLA means the average monthly benefit for a retired worker will increase by more than $50 per month starting January 2024. According to The Charles Schwab Corporation (NYSE:SCHW), although this payment may appear modest compared to the 8.9% COLA last year, retirees stand to retain higher benefits if inflation continues to subside in the coming months. Nevertheless, a sizable chunk is going to be eaten away by the standard Medicare Part B premiums too. These premiums have risen to $174.70 per month in 2024 from $164.90 in 2023, and are generally deducted from social security benefits.
“Social Security benefits generally do keep up with inflation, though there is a lag…If anything, these changes are a reminder that retirees’ incomes aren’t truly fixed. Social Security benefits can change from year to year, and retirees can and should adjust their spending as their situation and the broader economic and financial environment evolve.”
-Rob Williams, managing director for financial planning, retirement income, and wealth management at the The Charles Schwab Corporation (NYSE:SCHW) Center for Financial Research.
The 2023 COLA increase had led retirees to raise their spending growth by more than 3%, according to Bank of America Corporation (NYSE:BAC). Most of these retirees were cutting down on expenses previously because of the inflation.
“What this cost-of-living increase has done is allowed them some breathing space to move their spending higher, But I don’t think anyone would pretend they aren’t facing quite a lot of pressure still.”
-David Tinsley, senior economist at Bank of America Corporation (NYSE:BAC).
Considering these are insights for the current year, it is only obvious that retirees are struggling to come out of the pressures of inflation as yet. Despite inflation cooling down and COLAs helping them keep up, the Senior Citizens League says that the costs of items that older adults spend on consistently outpace the COLA.
Moreover, a Spending in Retirement survey by Employee Benefit Research Institute (EBRI) further reveals that almost half of the responding retirees spend less than $2,000 each month. 1 in 3 reported spending between $2,000 to $3,999 each month. Moreover, 16% spend between $4,000 and $6,999, and 3% spend more than that. The major trend, as evident, is that retirees prefer spending more or less around $2,000 only, which brings us to the question, where can one retire on $2,000 a month in the USA?
Well, there are many places to retire on $2,500 a month. For instance, one of the cheapest states to retire in is West Virginia, based on the 2023 Third Quarter Cost of Living Data Series by MERIC. Retirees can also choose some of the best states to retire in for taxes and cost of living, such as Mississippi, Oklahoma, and even Kansas. Regardless of which state they choose to live in, careful financial planning and consideration of individual preferences are essential for a comfortable retirement lifestyle. Retirees can take advice from financial consultants, such as those at The Charles Schwab Corporation (NYSE:SCHW), Morgan Stanley (NYSE:MS), and others, to help them navigate through retirement planning.
Henryk Sadura/Shutterstock.com
Methodology
To compile the list of 25 best US cities where you can retire on $2500 a month, we have used several sources such as Yahoo Finance, Travel & Leisure, Smart Asset, and Nasdaq, to name a few. Next, we filtered out the cities having average rents for one-bedroom apartments more than $1,500, and used Best Places and Redfin Corporation (NASDAQ:RDFN), for sourcing cost of living data for cities on our list.
We then ranked the cities based on the sum of their average rent, median home price, monthly grocery expenses, monthly utility expenses, and healthcare visits. Places have been ranked in descending order from the highest expenses to the lowest.
Here are the 25 Best US Cities Where You Can Retire on $2,500 a Month:
25. Fargo, North Dakota
Average Rent: $1,650
Median Home Price: $267,900
Average Monthly Utilities: $383.11
Average Monthly Groceries: $128.04
Dentist Visit: $117.38
Doctor Visit: $188.58
Despite the chilly winters, Fargo residents deem it as one of the best retirement spots because of its friendly Midwestern vibe, low crime rate, vibrant cultural scene, and numerous outdoor opportunities.
24. Tucson, Arizona
Average Rent: $1,455
Median Home Price: $330,000
Average Monthly Utilities: $387.01
Average Monthly Groceries: $137
Dentist Visit: $101.71
Doctor Visit: $123.98
Apart from being one of the sunniest cities in the US, Tucson is also appealing to retirees because of its big-city lifestyle, rich cultural scene, and availability of plentiful retirement communities.
23. San Angelo, Texas
Average Rent: $1,425
Median Home Price: $199,000
Average Monthly Utilities: $416.04
Average Monthly Groceries: $120.12
Dentist Visit: $101.12
Doctor Visit: $144.53
San Angelo is revered for its great medical care, good air quality, and thriving cultural scene. The city also has a friendly community atmosphere,
22. Sherman, Texas
Average Rent: $1,407
Median Home Price: $271,995
Average Monthly Utilities: $387.47
Average Monthly Groceries: $120.12
Dentist Visit: $109.48
Doctor Visit: $103.16
Sherman is known to be a warm and welcoming community offering quality healthcare, a warm climate, and plenty of recreational activities. There are good senior citizen centers, as well as walking and biking trails, grocery stores, and similar amenities.
21. Indianapolis, Indiana
Average Rent: $1,350
Median Home Price: $230,000
Average Monthly Utilities: $399
Average Monthly Groceries: $132
Dentist Visit: $107.02
Doctor Visit: $98.77
From senior living communities and healthcare facilities to cultural amenities and entertainment options, Indianapolis is another awesome place to retire at $2500 a month.
20. Cleveland, Ohio
Average Rent: $1,357
Median Home Price: $110,000
Average Monthly Utilities: $384.46
Average Monthly Groceries: $134.64
Dentist Visit: $111.05
Doctor Visit: $128.25
Home to the renowned Cleveland Clinic, Cleveland is home to high-quality healthcare, a well-developed transportation system, and a range of cultural and educational opportunities.
19. Norman, Oklahoma
Average Rent: $1,326
Median Home Price: $251,000
Average Monthly Utilities: $361.04
Average Monthly Groceries: $133.32
Dentist Visit: $103.42
Doctor Visit: $103.87
Another city where retirees can stretch their retirement incomes further is Norman, Oklahoma. The city is known for its friendly community, good healthcare facilities, and vibrant cultural scene.
18. Waco, Texas
Average Rent: $1,232
Median Home Price: $243,277
Average Monthly Utilities: $420.87
Average Monthly Groceries: $120.12
Dentist Visit: $110.82
Doctor Visit: $104.35
Retirees living in Waco praise the city for its riverfront lifestyle, community atmosphere, and affordable cost of living. Seniors can explore the famous Magnolia market, enjoy water-based recreation, and relish the warm climate.
17. Lansing, Michigan
Average Rent: $1,278
Median Home Price: $135,000
Average Monthly Utilities: $374.03
Average Monthly Groceries: $117.48
Dentist Visit: $101.31
Doctor Visit: $131.42
Lansing is an ideal place to retire to because of its active lifestyle, natural beauty, and quality healthcare. Retirees get to experience all four seasons, engage in recreational opportunities, and experience cultural and educational opportunities.
16. Greenville, South Carolina
Average Rent: $1,269
Median Home Price: $435,000
Average Monthly Utilities: $360.28
Average Monthly Groceries: $129.36
Dentist Visit: $113.1
Doctor Visit: $121.68
Home to a thriving cultural scene, a walk able and vibrant downtown, and delectable cuisine, Greenville is certainly one of the best US cities where you can retire on $2500 a month.
15. Fort Wayne, Indiana
Average Rent: $1,240
Median Home Price: $200,000
Average Monthly Utilities: $383.71
Average Monthly Groceries: $130.68
Dentist Visit: $110.56
Doctor Visit: $110.56
From reputable healthcare facilities to educational opportunities and a range of cultural attractions, Fort Wayne offers the best of amenities. Parks, trails, and the scenic Rivergreenway keeps retirees busy.
14. Springfield, Illinois
Average Rent: $1,136
Median Home Price: $159,000
Average Monthly Utilities: $379.27
Average Monthly Groceries: $126.72
Dentist Visit: $100
Doctor Visit: $121.25
Springfield has earned its spot on our list of best US cities to retire on $2500 a month for its inviting atmosphere, unhurried pace of life, and profound historical significance. Notably, history enthusiasts will appreciate that Springfield is the cherished hometown of none other than Abraham Lincoln.
13. Abilene, Texas
Average Rent: $1,109
Median Home Price: $225,750
Average Monthly Utilities: $405.06
Average Monthly Groceries: $124.08
Dentist Visit: $112.15
Doctor Visit: $115.15
Abilene is a great place to retire for $2500 a month owing to its community-oriented atmosphere, cultural attractions, and opportunities for lifelong learning.
12. Sioux Falls, South Dakota
Average Rent: $1,175
Median Home Price: $312,000
Average Monthly Utilities: $335
Average Monthly Groceries: $127
Dentist Visit: $107
Doctor Visit: $175
Affordable living costs, high-quality healthcare, and big-city amenities make Sioux Falls a popular retirement destination.
11. Mobile, Alabama
Average Rent: $1,127
Median Home Price: $160,000
Average Monthly Utilities: $378.86
Average Monthly Groceries: $128.04
Dentist Visit: $109.88
Doctor Visit: $110.21
Boasting one of the lowest costs of living in the United States, Mobile is another great place to retire on $2500 or even less. Its historic charm, vibrant cultural scene, and waterfront lifestyle are the top factors attracting retirees.
10. Montgomery, Alabama
Average Rent: $1,081
Median Home Price: $175,000
Average Monthly Utilities: $395.3
Average Monthly Groceries: $128.04
Dentist Visit: $74.78
Doctor Visit: $103.33
Retirees who wish to take it slow can do so in the quaint city of Montgomery. Famous for its low taxes, affordable healthcare, mild climate, and numerous cultural attractions, it is one of the best cities to retire in the USA.
9. Fayetteville, Arkansas
Average Rent: $1,097
Median Home Price: $363,000
Average Monthly Utilities: $368.4
Average Monthly Groceries: $120.12
Dentist Visit: $93.94
Doctor Visit: $174.75
The charming mountain town of Fayetteville is a good place to live on $2500 a month. The city offers a dynamic festival scene, great food, quality healthcare, and a moderate climate.
8. Akron, Ohio
Average Rent: $1,124
Median Home Price: $136,000
Average Monthly Utilities: $320.83
Average Monthly Groceries: $125.4
Dentist Visit: $104.45
Doctor Visit: $106.81
An ideal place to retire on $2,500 a month is Akron, Ohio. This city presents an ideal blend of affordability, tranquility, a vibrant outdoor scene, and the opportunity to savor all four seasons, making it an indisputable favorite.
7. Rockford, Illinois
Average Rent: $1,072
Median Home Price: $145,000
Average Monthly Utilities: $345.73
Average Monthly Groceries: $128.04
Dentist Visit: $107.62
Doctor Visit: $151
Despite the chilly winters, the “Forest City” of Rockford offers an ideal blend of natural beauty and cultural attractions. The Rock River provides retirees with various recreational opportunities, while the city offers various cultural experiences.
6. Wichita, Kansas
Average Rent: $1,020
Median Home Price: $214,950
Average Monthly Utilities: $392.58
Average Monthly Groceries: $130.68
Dentist Visit: $98.09
Doctor Visit: $111.4
According to Redfin Corporation (NASDAQ:RDFN), Wichita is a good place to live owing to its affordable housing, recreational opportunities, and delectable food scene. However, weather conditions can be extreme here.
Click to continue reading and see the 5 Best US Cities Where You Can Retire on $2500 a Month.
Suggested Articles:
- Top 15 Countries With Best Dental Health
- 18 Best Places to Retire in North Carolina
- 25 Most Humid Countries in the World
Disclosure: none. 25 Best US Cities Where You Can Retire on $2500 a Month is originally published on Insider Monkey.