Can you really retire in America and only spend $100 a day? Â Turns out it’s a lot more possible than you might think.
When I startedÂ this recent study with AARP, I’d expected only about 20 or 30 U.S. cities would be this affordable. Â But I was surprised to discover that most U.S. metro areas have a low enough combination of housing prices and property taxes to meet this criteria.
So what are the best cities for a $100/day retirement?
Based on things like arts and culture, rich community and great restaurants, here’s the Top 10:
I’m assuming a 25% tax rate, which will reduce your yearly income of $36,500 to $27,375 spendable income. Â That’s $2,281 per month.
The Bureau of Labor Statistics uses a percentage of 31.5% for the housing component of the Consumer Price Index. Â That means that we have $719 per month for mortgage payments and property taxes.
I’m assuming a 20% down payment, which means that with current low interest rates, we can afford a house priced at $192,000. Â Of course, putting up the nearly $40,000 (20% of $192,000) for the down payment may be challenging.
As I mentioned above, I was surprised to find that 259 of the 379 U.S. metro areas and divisions have this low combination of housing prices and property taxes.
And hereâ€™s something else I discovered.Â Current housing prices are so depressed (and rental prices so high by comparison), that in only 12 markets (out of 379) is it cheaper to rent a 3-bedroom unit instead of paying the monthly mortgage payment and property tax for the median home.Â Of course, youâ€™ll still need to pay for insurance and maintenance after coming up with the down payment.
As you might expect, the twelve metros with rents lower than monthly house payments include places such as New York, San Francisco, Boston, and San Jose.
At the other end are places which have been slammed by the housing crisis, such as Miami, Phoenix and Las Vegas, where you can save $700 or $800 (or more) PER MONTH by owning your home rather than renting.