Are You Considering Retirement in One of the 10 Most Expensive U.S. Cities?
Explore why retirees choose costly cities for their retirement, valuing quality of life over affordability.
Choosing a retirement location involves balancing quality of life with living expenses.
Where you decide to retire can significantly affect your financial stability. Across the U.S., living costs vary widely, influencing how far your retirement savings will stretch. However, affordability isn’t always the primary factor for retirees. A 2024 survey of Americans nearing retirement revealed that local happiness slightly outweighs affordability when selecting a retirement spot.
With that in mind, let's examine 10 U.S. cities favored by retirees despite their high living costs.
Key Insights
- Housing is the largest expense in a retiree’s budget and the main driver of a city’s cost of living.
- Other important affordability factors include healthcare, transportation, food, and taxes.
- Hidden costs, such as distance from hospitals and airports, can affect retirement comfort.
- Highly desirable cities often have higher living costs due to demand for amenities and location.
- Your ideal retirement city should meet practical needs without compromising your lifestyle preferences.
Arlington, Virginia
Cost Overview
Located just across the Potomac River from Washington, D.C., Arlington commands a premium cost of living. While everyday expenses like food and transportation align with national averages, housing costs are significantly higher.
The median home value in Arlington County is approximately $864,000, more than double the U.S. median of $416,900. Monthly housing expenses average $2,414, compared to the national $1,338.
Why Is Arlington So Costly?
Its proximity to the nation’s capital creates strong housing demand, especially from commuters. Arlington’s high quality of life includes walkable neighborhoods, excellent public services, and a concentration of white-collar jobs, reflected in a median household income of $140,160, well above the national median.
Castle Rock, Colorado
Cost Overview
South of Denver, Castle Rock is a rapidly growing suburb attracting retirees with its outdoor lifestyle and metro access. The median home value is $674,000, and monthly housing costs stand at $2,378, both significantly above national medians.
Additional Considerations
Transportation costs average $1,373 monthly, higher than the national average of $1,098.
Why Is Castle Rock Expensive?
Its closeness to Denver and abundant outdoor amenities drive population growth and housing demand. The population surged from 48,231 in 2010 to 81,415 in 2023, pushing up costs.
Delaware, Ohio
Cost Overview
Delaware offers small-town charm with expanding amenities and easy access to Columbus. Housing demand has increased, with median home values near the national average but monthly housing costs at $1,790, above the U.S. median. Transportation costs average $1,406 monthly.
Why Is Delaware Costly?
Its location near Columbus appeals to retirees seeking suburban comfort with urban convenience. Growing retail, dining, and recreational options have further increased costs.
Flagstaff, Arizona
Cost Overview
Flagstaff combines natural beauty, outdoor activities, and a university-town vibe, resulting in a higher cost of living. Median home value is about $503,400, above the national median, and transportation costs average $1,378 monthly.
Why Is Flagstaff Expensive?
Strong tourism and demand from second-home buyers keep property prices high. Its location near Northern Arizona University adds rental market pressure.
Key West, Florida
Cost Overview
Key West’s tropical island lifestyle comes at a premium. Median home value is $723,800, nearly twice the national median, with housing costs averaging $1,800 monthly. Food and transportation expenses are also above average.
Why Is Key West So Costly?
Limited land area, high tourism, and demand from vacation homeowners constrain housing supply and elevate prices.
Moyock, North Carolina
Cost Overview
Moyock serves as a bedroom community for military and job centers nearby. Though home values are below the national median, monthly housing costs are $1,466, and transportation costs reach $1,523 monthly.
Why Is Moyock Expensive?
Proximity to military bases and employment hubs keeps housing demand strong. Higher household incomes also support elevated costs. Limited healthcare access is a potential hidden expense.
New York City, New York
Cost Overview
New York City’s median home value is $1.1 million, over twice the national median. Monthly housing costs average $2,225. Taxes are high, with residents paying about $1,484 monthly. Food and healthcare costs exceed national averages.
Why Is NYC So Expensive?
As a global center for finance and culture, NYC’s limited housing supply and heavy tax burden keep costs elevated. A high median income of $104,553 also drives up prices.
Rockwall, Texas
Cost Overview
Near Dallas, Rockwall offers lakeside living and small-town charm with city access. Median home value is $386,000, but monthly housing costs average $2,054. Transportation costs are $1,422 monthly.
Why Is Rockwall Costly?
Growing demand from commuters and families drives housing costs up. Texas’s no state income tax helps but doesn’t fully offset expenses.
San Diego, California
Cost Overview
San Diego’s sunny climate and coastal location make it highly desirable. Median home value is $791,600, with monthly housing costs around $2,275. Transportation and taxes are also substantial.
Why Is San Diego Expensive?
Limited buildable land, military bases, universities, and a median income of $102,285 contribute to high housing demand and overall living costs.
Seattle, Washington
Cost Overview
Seattle’s tech industry has boosted incomes but increased living expenses. Median home value is $811,200, and housing costs average $2,222 monthly. Healthcare costs have risen sharply.
Why Is Seattle Costly?
Tech giants like Amazon and Microsoft drive high wages and housing demand, compounded by limited space and zoning restrictions.
Retirement Planning Insights
Financial considerations are crucial for retirees, particularly those on fixed incomes. Housing, healthcare, transportation, and taxes significantly influence retirement comfort and security.
While cities like Key West and San Diego may seem financially challenging, their appeal lies in lifestyle benefits. Retirement is a time to enjoy your achievements, so balance cost with quality of life.
Choose a retirement destination that aligns with your budget and personal priorities—whether that means proximity to family, outdoor activities, or vibrant cultural scenes.
Conclusion
Affordability remains a key factor in retirement decisions, with housing costs playing a dominant role. However, other expenses such as healthcare, transportation, food, and taxes also impact your budget.
Popular cities with desirable climates, scenery, and amenities often come with higher costs. Yet, the right retirement location supports your lifestyle and well-being, not just your finances. Consider intangible factors like community, convenience, and joy alongside expenses when planning your retirement.
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