Living mostly on Social Security in retirement

[Bestwifeever]

The list of the 5 places from Yahoo is not worse than the list of the 10 places from US News and World Report.

The Yahoo list, all written on a single web page, is better just because you don't have to hit "next" 11 times to see 10 cities in a slide show like in the money/usnews link.

 

[NW-Bound]

5 Places to Retire on Social Security Alone - Yahoo! Finance

Pittsburgh, San Antonio, Gainesville, Omaha and Eau Claire.

I just looked at that article, and saw the following excerpt. Note that the bold-faced word was mine.

It’s sometimes hard to imagine life in retirement, but picture living on Social Security alone. Assume all you earn is $2,500 a month, the maximum check a worker currently receives at full retirement age from Social Security. Where can you comfortably pay taxes, afford housing and still have some left over to actually enjoy retirement?​

That income of $2,5000/month is $30K/year. My mother, a widow, lives very well on that, or even less. Her SS is not that amount, but she also has a small pension, plus a supplement from her IRA. The key is that she owns a relatively new, small but comfortable home (too big for her actually, after my father passed away), which is worth perhaps $200K.

What does my mother spend $2,500/month on? She pays utility bills, buys some food, pays for Medicare supplement, goes to her hair dresser twice a month, puts a bit of gas in her paid-for car, and faces an occasional big dental bill. That's it! Oh, she buys quite a bit of clothes actually, and all the bedroom closets are overflowing!

Once a retiree owns her place, that $30K/yr lets her live in many places in the country. It should not be a big deal with that income.

 

[Koolau]

What I currently pay in HOA/maintenance fees will rent or even pay the mortgage on a decent to nice apartment/house in several of these cities. Building on what NW-Bound points out, if you can cover your housing, you can pretty well "fake" everything else. Spend a little more here and a lot less there, and you have it. But, housing can be an ER killer if you are planning to live on 30K/year IMO. Probably the only other wild card is health insurance/medical costs. YMMV

 

[Nords]

The list of the 5 places from Yahoo is not worse than the list of the 10 places from US News and World Report.

Sorry, I grew up in "Someplace Special".

But I suppose San Antonio out of five isn't too bad.

 

[Major Tom]

But, housing can be an ER killer if you are planning to live on 30K/year IMO. Probably the only other wild card is health insurance/medical costs. YMMV

These conversations can get a little pointless, if you don't mind me saying. Sure, housing can be an ER killer, if you're spending more on housing than you can afford. It depends what your expectations are, and if you're prepared to live within your means.

30K/yr might not be enough to live to a particular given standard, but there are many parts of the country in which you can put a decent roof over your head (even if you don't own a home), and buy groceries, transport and even a little entertainment for that kind of income.

If you want to live a 40K lifestyle however, then you're going to have problems........

 

[nun]

I don't plan to do this (which is why I invest), but I have heard more and more people discuss this. Perhaps you know (as I do) some people who have said they will never be able to retire.

Just curious if you know people who do this currently or plan to.

I'm budgeting to only spend SS type pensions after age 65. Even though I only have 17 years of US SS I will also qualify for the UK equivalent of SS. I project that in future dollars and after WEP the two checks will total $4k a month which should cover my projected spending given 3% annual inflation; I have no mortgage or other debt and as soon as you eliminate those your budget can really shrink. I live in Boston so not especially inexpensive, but I have worked to minimize my post retirement budget.

 

[LakeTravis]

I just looked at that article, and saw the following excerpt. Note that the bold-faced word was mine.

It’s sometimes hard to imagine life in retirement, but picture living on Social Security alone. Assume all you earn is $2,500 a month, the maximum check a worker currently receives at full retirement age from Social Security. Where can you comfortably pay taxes, afford housing and still have some left over to actually enjoy retirement?
​

That income of $2,5000/month is $30K/year. My mother, a widow, lives very well on that, or even less. Her SS is not that amount, but she also has a small pension, plus a supplement from her IRA. The key is that she owns a relatively new, small but comfortable home (too big for her actually, after my father passed away), which is worth perhaps $200K.

What does my mother spend $2,500/month on? She pays utility bills, buys some food, pays for Medicare supplement, goes to her hair dresser twice a month, puts a bit of gas in her paid-for car, and faces an occasional big dental bill. That's it! Oh, she buys quite a bit of clothes actually, and all the bedroom closets are overflowing!

Once a retiree owns her place, that $30K/yr lets her live in many places in the country. It should not be a big deal with that income.

A $200K home in San Antonio would require close to $5K a year in property taxes after exemptions.

Utilities, insurance, food - another $10K-$12K a year.

I supposed it's possible but it doesn't leave much room for anything else.

 

[Ally]

My daughter's family lives in a rural texas town with a small college. I have no doubt you could have lived there for that until their recent oil boom. Now housing is at a premium.

 

[Ed_The_Gypsy]

We live in Bellingham, WA, where I expect we will stay for a while. By the time we repatriate, the house will be paid for. In extremis, we can sell and move out to the county and live for super cheap if needed. It is a small town in a low-population county; everything will still be close. We will be able to live on SS and still save money. Investments will be gravy.

 

[NW-Bound]

A $200K home in San Antonio would require close to $5K a year in property taxes after exemptions.

Utilities, insurance, food - another $10K-$12K a year.

I supposed it's possible but it doesn't leave much room for anything else.

That still leaves $15K+/year. For an elderly person like my mother who does not travel much, nor into electronic toys, etc..., it is enough.

And by the way, the RE tax here for her home is less than $2K/yr, but then of course we have sales taxes. Bad one too, at more than 9%.

 

[Brett_Cameron]

my Mother lived on $700/month SS plus another $700/month from my sisters and me in a small college town in TN. She managed to save up for things she wanted, clothes, furniture, etc.. This was from 1994 to 2006 when she passed away.

 

[photoguy]

There are folks here who spend very little, within the range of SS benefits, but they have (significant) other assets.

I was pleasantly surprised when I started looking at my SS statements. Between the two of us, it's probably good for 30k+ a year which will cover a huge chunk of expenses.

 

[Major Tom]

Ouch.

Well, I guess when you're seeking a safety net you're not too concerned about the quality of the material.

For some people, the best place to be is where their family and friends are. The metrics that are used to measure these places for articles are not always the same ones that individuals use to decide where they really want to be.

I know you were saying that in jest (I think you were) and this may have a lot to do with the way I see the world, but I think that happiness and fulfillment are determined by many more factors than merely where a person happens to be.

 

[RobLJ]

Ouch.

Well, I guess when you're seeking a safety net you're not too concerned about the quality of the material.

San Antonio is a nice town (if you can tolerate the heat). My youngest went to CMU and I was shocked how much Pittsburgh had refashioned itself; the suburbs around campus were great.

 

[rbmrtn]

Marketwatch has a series on each states retirement highlights

Retire Here, Not There - Where to Retire - MarketWatch.com

 

[Katsmeow]

A $200K home in San Antonio would require close to $5K a year in property taxes after exemptions.

Utilities, insurance, food - another $10K-$12K a year.

I supposed it's possible but it doesn't leave much room for anything else.

I live in Texas (not San Antonio) in an about $300k home and my property taxes are $5k. At 65, you can get an exemption which puts a ceiling on your school taxes (which in many areas is the bulk of the property tax). THere is also a procedure to not pay taxes although they are owed when the property is sold or at death.

All that said - most people who are drawing only SS with few other assets probably don't have a $200k house.

Texas A&M says median home prices in San Antonio $158k with only about 1/3 more than $200k.

San Antonio MLS Housing Activity, Data -- Real Estate Center at Texas A&M University Home

And most people living on SS only who own their own home are much more likely to live in homes in well below the median.

 

[old woman]

I will mostly live on SS the first few years. SS will give me about 2K and my roommate about 800 and I only need about 36K to live so about 200 from investments. My investments are mostly 401K and ROTH with some taxable totaling 654K so if I withdraw 1-2% it will be enough. I will wait to spend much more to be sure the market doesn't go down right away. I plan to retire when I save 700K. I will be 65 in 4 months so will hold off major withdrawals until my RMD at 70 except maybe a lump sum the first year to fix up the house.

 

[WestLake]

There are small towns, lakes with cabins all over the south and even in booming Texas where you can find houses for $50,000. So if you can pay cash for one of those, you probably could live on social security. You might have to delay some home maintenance until you die however. :O. And yes you can skip the property taxes past 65 and let the county collect when you kick the bucket.

 

[LakeTravis]

I live in Texas (not San Antonio) in an about $300k home and my property taxes are $5k. At 65, you can get an exemption which puts a ceiling on your school taxes (which in many areas is the bulk of the property tax). THere is also a procedure to not pay taxes although they are owed when the property is sold or at death.

All that said - most people who are drawing only SS with few other assets probably don't have a $200k house.

Texas A&M says median home prices in San Antonio $158k with only about 1/3 more than $200k.

San Antonio MLS Housing Activity, Data -- Real Estate Center at Texas A&M University Home

And most people living on SS only who own their own home are much more likely to live in homes in well below the median.

I need to move to where you are! One of our homes outside of Austin (not in the city limits but in Travis county) is on the tax rolls at $197K and yet the property tax bill last year was $6K even after homestead exemption. The two biggest factors were the school property taxes (1.5%) and the MUD (.98%).....the rest added in (ESD, County, Hospital District, Community College, etc) resulted in a total effective rate of 3.02% per $100 of valuation.

Yes, you can "defer" property taxes in Texas - and the state will gladly charge you 8% a year in interest to do so.

A lakeside cabin at $50K outside of any incorporated areas on a well with septic sounds like the way to go..........

 

[REWahoo]

I need to move to where you are! One of our homes outside of Austin (not in the city limits but in Travis county) is on the tax rolls at $197K and yet the property tax bill last year was $6K even after homestead exemption. The two biggest factors were the school property taxes (1.5%) and the MUD (.98%).....the rest added in (ESD, County, Hospital District, Community College, etc) resulted in a total effective rate of 3.02% per $100 of valuation.

Ouch.

When we moved from San Antonio in 1997 our effective rate was 2.7% per $100 valuation and I thought that was about as high as it got.

A lakeside cabin at $50K outside of any incorporated areas on a well with septic sounds like the way to go..........

That was our thinking when we moved - well, not a cabin or lakeside since any property close to the water is at least 2X as expensive. We did spend considerably more than $50K to build our house, and the cost to drill a well and install a septic system at the time was ~$25K (probably cost more than that for the well alone today). But the good news is our property tax rate is "only" 1.9% - and the even better news is we aren't living on SS alone!

 

[Major Tom]

There are small towns, lakes with cabins all over the south and even in booming Texas where you can find houses for $50,000. So if you can pay cash for one of those, you probably could live on social security. You might have to delay some home maintenance until you die however. :O. And yes you can skip the property taxes past 65 and let the county collect when you kick the bucket.

Funny you mention this - a few days before this thread started, I was looking for cabins for sale in rural California (mainly on Trulia). A little above the price you mentioned but for 79K, I found an interesting geodesic dome house in the redwoods with a nice interior, and what looked like a fairly new kitchen. Living in that definitely wouldn't be slumming it. For 52K, there was a small cabin on 1.5 acres in the redwoods.

For those who don't want complete isolation (that would be me), some of them are in small communities so that you have the advantage of a few neighbors around. I must admit that I am occasionally quite tempted.

 

[MichaelB]

We left NY because it was too expensive to live there once I was no longer working. The house we sold had an effective tax rate of 2.1% based on market value. That was in '05. Since then the market value has fallen by about 1/4 but the property tax has increased by 1/3. The effective tax rate (based on zillow market value) was 3.7% for 2010.

 

[tryan]

The problem with settling in a low cost area is you're STUCK ... my mother lives in Syracuse (on the list) and would love to move closer to family. But can't afford even a condo in any of the areas near the kids.

She's been in her house nearly 15 years and it has not even appreciated with the inflation rate. The only equity she has was earned by paying down the mortgage.

So it can become a one way move.

 

[imoldernu]

Some thoughts:

We used to live in the Chicago suburbs... avg. family income is $88K
We now live 92 miles away... Family income $50K

I estimate a cost of living difference of $6K to $8K per year.

Our current SS (me 100%, DW 50%) is $25K
Our fixed cost for Total healthcare ... Medicare A+B+D and supplement $10K.
SS began in 2001

$25K minus $10K = $15,000/yr. or $1800/mo.
Real numbers, for 2 persons with normal government SS and Healthcare.

As far as good places to live? That has to be subjective.

How would you break down $1800/month for two persons, to pay rent, taxes, food, transportation, utilities, upkeep, personal care, etc... An interesting exercise in frugality.

 

[ejman]

Very doable in SW Oregon. Heck, the median income per household in SW Oregon is about 31K per year. Two people drawing the average SS payment would get you there.