Top U.S. cities to retire with no savings

If you haven’t saved anything for retirement, you’re not alone.

Nearly 30% of Americans haven’t saved $0 for retirement, according to recent data from the personal finance website GOBankingRates. Another 33% saved less than $50,000.

If you fall into either category and are nearing retirement age, it may be time to start preparing for living on a smaller budget after you stop working, says Anne Lester, retirement expert and author of “Your Best Financial Life: Save Smart.” Now, let’s talk about the future you want. »

“You’ll need to start thinking about how you can start to reduce your standard of living and gradually get used to having less money to spend after retirement,” she told CNBC Make It.

If you don’t have a lot of money saved in a retirement account such as a 401(k) or Roth IRA, you may have to rely on your Social Security benefits to cover your expenses, which might not not go very far. The average monthly benefit was about $1,773 in February, according to the Social Security Administration.

With that in mind, GOBankingRates analyzed the 100 largest U.S. cities with a significant population of residents over 65 to determine the best place to retire with little or no savings. It ranked each city on various metrics, including average home value, annual grocery costs, annual utility costs and whether the state taxes Social Security benefits.

The study used data from a variety of sources, including the U.S. Census Bureau’s 2021 American Community Survey, the Tax Foundation, and the Bureau of Labor Statistics’ Consumer Expenditure Survey.

Here are the five best places in the United States to retire if you have little or no savings, according to GOBankingRates.

• Percentage of the population aged 65 and over: 31%
• Average home value in 2023: $296,232
• Taxed social security benefits: No
• Average annual grocery costs: $4,326
• Average annual health care costs: $8,120

• Percentage of the population aged 65 and over: 28%
• Average home value in 2023: $199,388
• Taxed social security benefits: No
• Average annual grocery costs: $4,277
• Average annual health care costs: $6,482

• Percentage of the population aged 65 and over: 63%
• Average home value in 2023: $289,418
• Taxed social security benefits: No
• Average annual grocery costs: $4,407
• Average annual health care costs: $6,749

• Percentage of the population aged 65 and over: 86%
• Average home value in 2023: $418,926
• Taxed social security benefits: No
• Average annual grocery costs: $4,591
• Average annual health care costs: $6,882

• Percentage of the population aged 65 and over: 32%
• Average home value in 2023: $322,770
• Taxed social security benefits: No
• Average annual grocery costs: $4,385
• Average annual health care costs: $6,461

At this point, if you’re nearing retirement age and have little or no savings, you may need to make some tough decisions.

For example, you may need to consider delaying retirement in order to receive a higher Social Security benefit or find a part-time job to supplement your after-work income, Lester says.

“It’s time to start taking seriously how much money you’ll have and how far it will go based on where you live,” she says.

Three of the five best places to retire with little or no savings are in Arkansas, which offers both advantages and disadvantages for retirees on a tight budget.

You could benefit from the state’s relatively cheap cost of living and housing expenses, which are about 8% and 22% lower than the national average, respectively, according to RentCafe.

However, in exchange for lower living expenses, you may have to give up some perks, like proximity to family or variety of things to do. Although Arkansas offers scenery of natural beauty in the form of hot springs, caves, and forests, you’ll have to travel a bit to relax on the beach, for example.

And remember, while lists like this can provide useful context, where you choose to retire will depend on many personal preferences aside from cost of living. If you’re considering a move, a good rule of thumb is to visit your potential retirement destination in advance to get a feel for what it might be like to live there long-term.

“If you think offshoring is in your future and you have the budget, check out a few places to start seeing what’s possible,” says Lester.

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