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Saving for retirement is challenging for many Americans in the current cost-of-living crisis. For ordinary consumers, grocery shoppers, hopeful home buyers and more, making ends meet today is hard enough without setting aside funds for the future. But without prioritizing saving now, many Americans risk not having enough cash to retire comfortably.

Location plays a key role in a household’s ability to afford retirement, and individuals who start saving sooner stand a markedly better chance of saving enough. Forbes Advisor recently analyzed 78 of the largest U.S. cities to determine the best and worst cities for Americans to retire comfortably. We examined projected expenses for a 30-year retirement based on the local cost of living and compared that figure to the amount two-adult households could save if they put aside 10% of the average income when both earners were 25 and 35 years old.

Key Takeaways

  • Gilbert, Arizona, ranks as the best city for a comfortable retirement. If households start saving at age 25, they would have savings averaging 150% more than needed.
  • Detroit, Michigan, ranks as the worst city for a comfortable retirement, with households earning the median household income and starting at age 25 saving only 55.21% of the amount needed and households starting at age 35 managing to save just 25.36%.
  • Arizona and Texas each have two cities that rank among the top five best places for a comfortable retirement.
  • Americans who start saving for retirement later risk not accumulating enough to retire comfortably in major U.S. cities. Our analysis shows that households earning the median household income and saving 10% of their income annually starting at age 35 will have less than 70% of what they need to retire in all 78 cities examined.

The Top 5 Best Cities for a Comfortable Retirement

1. Gilbert, Arizona

Projected Cost of a Comfortable 30-Year Retirement: $1,962,809
Median Household Income: $111,393
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $2,948,554

According to our analysis, Gilbert, Arizona, is the best city for a comfortable retirement. Located just outside of Phoenix, Gilbert offers easy access to the state capital’s booming job market.

If two adults with a combined income of $111,393 were to both start saving 10% of their income each year from age 25 and retire at 67, they would amass $2,948,553 with compound interest by the time they retired. This is 150% more than the $1,962,809 needed for a comfortable retirement. We determined these figures using cost-of-living data and average retirement expenditures from The Bureau of Labour Statistics (BLS) and The Center for Regional Economic Competitiveness (CREC).

For those who start saving late for retirement, it might be difficult to live comfortably. A household would only be able to save 68.99% of the amount necessary for a comfortable retirement if both earners started saving at 35 instead of 25. But while late savers are at risk here, they’re better off than they would be in many other cities analyzed.

2. Arlington, Virginia

Projected Cost of a Comfortable 30-Year Retirement: $2,343,423
Median Household Income: $132,380
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $3,504,076

Located across the Potomac River from the nation’s capital, Arlington, Virginia, is one of the best places to live a comfortable retirement. If a two-person household earning $132,380 started saving 10% each year from the age of 25, they would have $3,504,076 saved by retirement. An expected annual post-retirement cost of living of $59,046 gives savers 149.53% more than the $2,343,423 required for a comfortable retirement.

Late savers are not likely to enjoy the same flexibility. If the same household began saving a decade later, it would have just $1,609,290 or 68.67% of the amount needed to retire.

Arlington’s proximity to the capital offers excitement and opportunity with more encouraging retirement prospects—for those who start saving earlier—than Washington, D.C.

3. Austin, Texas

Projected Cost of a Comfortable 30-Year Retirement: $1,691,429
Median Household Income: $89,415
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $2,366,799

Austin, Texas, is a fast-growing city that attracts young talent and retirees alike. Its cost of living and median income make it one of the top five cities to retire.

Households earning the median income and saving 10% annually toward retirement from the age of 25 can expect to have $2,366,800 saved by retirement. These savers would have 139.93% more than needed to live comfortably.

However, if the same earners began saving at 35 instead of 25, their household would have half the amount saved, or just $1,086,981 (64.26% of what it would need).

One thing that sets Austin apart is its relative affordability. It has a higher median household income than other top cities and a comparatively low cost of living; those who call Austin home can expect to spend a modest $56,381 per year on expenditures.

4. Plano, Texas

Projected Cost of a Comfortable 30-Year Retirement: $1,990,117
Median Household Income: $103,916
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $2,750,639

Located outside of Dallas, Plano, Texas, is another top pick to live a comfortable retirement. The median household income is one of the highest at $103,916, and the expected cost of a 30-year retirement is just under $2 million. If households in Plano earn the median income and save 10% annually for retirement from the time each member is 25, they can expect to have $2,750,639 saved by age 67. This is 138.21% more than they would need to retire comfortably.

Households that start saving for retirement 10 years later would accumulate $1,263,265. This is 63.48% of the total amount required for a comfortable retirement. Compared to Austin, Plano residents will spend slightly more each year to cover their living expenses, but they tend to earn higher incomes, too.

5. Scottsdale, Arizona

Projected Cost of a Comfortable 30-Year Retirement: $1,935,500
Median Household Income: $100,636
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $2,663,818

Last on our list of the five best cities for a comfortable retirement is Scottsdale, Arizona. Neighbor to Gilbert and located in the greater Phoenix metropolitan area, Scottsdale offers strong opportunities to earn and save.

While Scottsdale’s median household income is lower than Gilbert’s, it’s still comparatively high, and Scottsdale residents need less for a comfortable retirement. If two-earner households with the median income start saving 10% for retirement from age 25, they would have $2,663,818 saved by 67. This goes beyond the $1,935,500 requirement by 137.63%.

Households that delay their retirement saving until their members are 35 will only have $1,223,391 saved. This will cover 63.21% of the total needed to retire comfortably in Scottsdale.

The Top 5 Worst Cities for a Comfortable Retirement

1. Detroit, Michigan

Projected Cost of a Comfortable 30-Year Retirement: $1,747,753
Median Household Income: $36,453
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $964,095

Detroit, Michigan, tops our list as the worst city for a comfortable retirement. The median household income in Detroit is just $36,453. If two-earner households save 10% of their income annually starting when members are 25, they would have $964,095 in savings by age 67. Savers need $1,747,753 for a comfortable retirement in Detroit, meaning many are left with 55.21% of the amount required.

Households starting to save for retirement at age 35 fare far worse. They would only save $443,144, which covers 25.36% of the amount needed for a comfortable retirement.

The cost of living in Detroit is high across the board. In fact, many homes can’t afford basic living expenses. A Forbes Advisor study on the best and worst states to raise a family recently found Detroit to be the only city where average earnings were not enough to cover necessities.

2. Cleveland, Ohio

Projected Cost of a Comfortable 30-Year Retirement: $1,563,420
Median Household Income: $37,351
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $988,675

The next worst city for a comfortable retirement is Cleveland, Ohio. The annual median household income in Cleveland is just $37,351, and a household bringing in this amount while saving 10% annually toward retirement, starting when each earner is 25, would have $988,675 in savings by age 67. With retirees needing $1,563,420 to retire comfortably in Cleveland, households with average earnings would only have 63.24% of the amount required.

Households that wait until age 35 to start saving are at even greater risk. Without the benefit of ten more years of contributions and compound interest, these households will only save 29.04% of what they need. Although Cleveland’s cost of living is on the lower side, this will likely not be enough to make a difference for homes with low earnings.

3. Newark, New Jersey

Projected Cost of a Comfortable 30-Year Retirement: $1,978,170
Median Household Income: $49,688
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $1,315,233

Newark, New Jersey, is expensive for savers and retirees. The projected cost of a comfortable 30-year retirement is just under $2 million, and with a below-average median income and above-average cost of living, many residents will struggle to save.

Households in New Jersey who earn a median income of $49,688 and save 10% annually for retirement from the time members are 25 will have $1,315,233 saved by age 67. This is only 66.49% of the amount needed for a comfortable retirement in Newark.

Waiting a decade to start saving could have severe consequences. A household with the same savings rate starting at age 35 would have $604,037 put away, or just 30.45% of what they need. Rising costs in Newark, which is just 10 miles from New York City, can make budgeting around a fixed income in retirement challenging.

4. Urban Honolulu CDP, Hawaii

Projected Cost of a Comfortable 30-Year Retirement: $3,089,290
Median Household Income: $82,006
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $2,170,685

While some retirees may dream of retreating to a tropical destination, the cost of living on an island can be prohibitively expensive. Of the 78 metropolitan areas we analyzed, Honolulu, Hawaii, had the highest projected cost of a comfortable 30-year retirement, at over $3 million.

With the relatively high median household income of $82,006, the average household in Urban Honolulu saving 10% annually from age 25 would have $2,170,685 saved by 67. While this is much more than residents of many other cities manage to put away, this would only cover 70.26% of the amount needed for a comfortable retirement in this city.

A household saving 10% a year from age 35 would only have $996,914 by the time both earners were 67, which is only 32.27% of what they’d need to retire comfortably.

5. New Orleans, Louisiana

Projected Cost of a Comfortable 30-Year Retirement: $1,879,176
Median Household Income: $52,322
Estimated Retirement Savings for Households Who Begin Saving at Age 25: $1,384,955

New Orleans, Louisiana, is the last city in our worst cities for a comfortable retirement. The projected cost of a 30-year retirement in New Orleans is $1,879,176. With the median household income at $52,322, households saving 10% starting when earners are 25 would have $1,384,955 saved by age 67. This amount would only cover 66.49% of the total needed to live comfortably in retirement.

A household that started saving ten years later would have half that saved. Earning the median income and saving 10% annually, two-earner households with both adults saving when they’re 35 would only have $636,057 saved, which is 33.85% needed to afford expenditures.

New Orleans has a rich history and vibrant culture, but the city’s struggling economy may make it a poor choice for working adults nearing retirement.

Find The Best High-Yield Savings Accounts Of 2024

Tips To Retire If You Haven’t Saved Enough

If you feel like you don’t have enough saved for retirement, you aren’t alone. According to the National Institute on Retirement Security, 55% of Americans are worried they won’t experience financial security in retirement. That being said, it’s never too late to start saving more.

First, find out how much income you’ll need in retirement by considering factors such as where you live and plan to live, your desired lifestyle and new expenses such as increased health costs. Use a cost of living calculator to learn what basic necessities cost in popular cities.

Next, figure out how much money you’ll need to save for retirement. Use a retirement savings calculator to determine if you’re on track to retire based on your current contributions and income.

After you know how much you need, develop a strategy to allocate more money toward savings if you’re worried you’ve fallen behind. Try any of the following:

  • If possible, reduce your cost of living to free up more funds to save. If it isn’t feasible to live below your means because of debt or income limitations, work to address these.
  • Max out your retirement accounts by contributing up to IRS annual limits whenever you can.
  • Take advantage of tax benefits such as the Saver’s Credit and catch-up contributions to add more to your retirement accounts.
  • Set aside savings for emergencies and other goals to avoid dipping into your retirement accounts. Unlike other savings accounts, high-yield CDs offer the benefit of guaranteed interest. They also lock your funds for a set amount of time so you can commit fully to saving. Many retirees use CD interest payments as a source of income.
  • If you have a high-deductible health plan, contribute to HSAs. These tax-advantaged savings accounts can be used for medical expenses and never expire.

Methodology

To evaluate the best and worst cities for a comfortable retirement, Forbes Advisor conducted a comprehensive analysis based on the following metrics:

Median two-earner household income: Data comes from the U.S. Census Bureau’s American Community Survey (ACS).

Cost of living and average expenditures for retirees: Data comes from The Bureau of Labour Statistics (BLS) and Center for Regional Economic Competitiveness.

We projected the cost of a 30-year retirement in 78 major U.S. cities based on their cost of living and average expenditures for retirees.

We determined how much the average household in each city would be able to save, assuming they earned the median household income, saved 10% of their income toward retirement annually and earned an annual rate of return of 7.5% on retirement investments. We looked at how much a household of two working adults could save if they started saving at ages 25 and 35.

We compared how much a household that begins saving at age 25 will save to the projected amount needed for a comfortable retirement to rank all 78 cities. Additionally, we compared how much a household that begins saving at age 35 will save to the projected amount needed to see the financial impact of commencing retirement savings later.

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Last Update: June 18, 2024

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