5 Best, Worst Cities to Save for Retirement
New report ranks the top places in the U.S. to live to help build a nest egg, as well as the toughest places to do so
Where you live—and how you live—before your retirement can have a tremendous impact on your finances and savings. But which cities provide the best opportunities to build a financial nest egg for retirement?
To find out, researchers over at MutualFund.com examined opportunities to build a nest egg by analyzing key factors related to personal finances and budgeting, including housing affordability, income and income growth, cost of living, economic stability, and tax friendliness. The ranking analyzed these key metrics throughout the 170 most populous cities across the country to determine where the best—and worst—cities to save for retirement are located.
In its coverage, MutualFund.com lists the 25 best and worst places to build a retirement nest egg. Cities within the Dallas and Phoenix metropolitan area are prominently featured within the top 10 best cities, including Garland, Texas (No. 6), Chandler, Arizona (No. 7), and Mesa, Arizona (No. 9) in addition to those making the top five listed below. Cities in 10 different states made the top 25.
Perhaps unsurprisingly, the worst cities to save for retirement are also among the most expensive, especially in terms of housing. California cities dominate the “worst” list, accounting for 13 of the bottom 15, interrupted only by a couple of New York cities.
Next page: 5 Best Cities for Retirement Savers
5 Best Cities for Retirement Savers
5. Arlington, Texas
If you feel your nest egg is getting wired to Uncle Sam every tax season, then we suggest a relocation to Arlington, Texas, where the state income tax rate is exactly 0%. On top of that, Arlington’s median home price of $310,195 is the lowest on our top five list, and the city boasts one of the nation’s highest year-over-year income growth rates of 17.61%, so the already wide margin between salary and housing costs should continue to grow as residents ride into their sunset years.
4. Gilbert, Arizona
While Gilbert’s clock tower may playfully suggest that newcomers are running behind schedule, stepping into Gilbert these days means you’re arriving right on time. Gilbert boasts a robust median household income of $111,393 per year, approximately 1.48 times the national average. Moreover, the city maintains a low poverty rate of 4.8%, a stark contrast to the national average of 12.6%. Additionally, only 17% of homeowners in Gilbert are considered “cost-burdened,” a significant departure from the nationwide figure of 27.8%. With such robust incomes and a reasonable cost of living, Gilbert residents have ample funds left for retirement investing.
3. Durham, North Carolina
As part of the Research Triangle, Durham attracts scientists, techies, and academics of all stripes, so it follows that the city’s median household income of $78,105 outpaces the national average of $74,755. These higher incomes carry more weight in Durham, where the median monthly housing cost is just $1,555, over $200 below the national average. With a low unemployment rate of 2.8% and an impressive income growth rate of 9.48%, Durham emerges as an ideal destination for long-term settlement and retirement nest egg accumulation.
2. Boise, Idaho
Boise, Idaho’s largest city by more than 100,000 residents, stands out as a top destination for those aiming to build their nest egg through increased earnings. Bolstered by robust tech and healthcare sectors, Boise boasts a relatively high median household income of $81,425. However, what truly distinguishes Boise is its remarkable year-over-year income growth rate of 15.96%, significantly surpassing the national average of 7.23%. Despite its economic growth, monthly housing costs in Boise remain just below the national average, with a median monthly housing cost of $1,700 compared to $1,775 nationally. This leaves ample room to allocate funds for the golden years.
1. Overland Park, Kansas
Part of the Kansas City metropolitan area, Overland Park tops the list due to the city’s low poverty rate (5%), low unemployment rate (just 2.5%), and high median household income ($96,694). Additionally, the median home price in Overland Park comes in at $413,250, resulting in an income-to-housing cost ratio of 4.27, which is below the recommended rule of no more than 5 times your household income. According to the U.S. Bureau of Economic Analysis, Overland Park’s cost of living index hovers below the national average, making essentials less expensive compared to the rest of the nation and leaving plenty of money to stash away for retirement.
SEE ALSO:
• Retiring on the Cheap: 5 Countries, 7 U.S. Cities Where You Can Retire on $2,000 a Month
Next page: 5 Worst Cities for Retirement Savers
5 Worst Cities for Retirement Savers
5. San Diego, California
San Diego, known as “America’s Finest City,” boasts beautiful beaches, a year-round mild climate, and an abundance of craft beers. However, indulging in these delights comes at a cost. With a median home price of $960,202, the highest among our top-five list, 37.8% of the city’s residents find themselves classified as cost-burdened. Additionally, California’s tax rates, combined with a high cost of living index, mean that many residents will struggle to save after budgeting for housing and basic necessities.
4. Oceanside, California
Oceanside proves that the road to a rosy retirement isn’t paved with sun-kissed beaches and longboards. Despite the laid-back atmosphere, residents of Oceanside have to scramble to make their median household income of $83,271 stretch to meet the city’s median home price of $823,249. This leaves 44% of the city classified as cost-burdened homeowners. And with California’s standard 13.3% income tax, Oceanside residents can’t be blamed for skipping the monthly retirement nest egg deposit.
3. New York, New York
New York: “If you can make it there, you can make it anywhere,” except perhaps to the Seychelles for retirement. With a median monthly rent totaling $2,991 and a median household income of just $74,694, a full 43.3% of city residents are classified as cost burdened. Additionally, the unemployment and poverty rates surpass the nation’s averages, with 4.5% of the city unemployed and 18.3% living below the poverty line (compared to 3.5% and 12.7%, respectively). With the third-highest income tax in the nation (10.9%), everyday New Yorkers face a steep climb toward retirement savings.
2. Anaheim, California
The most populous city in Orange County, Anaheim conjures up visions of glitzy homes and Disney resorts, but the reality for its residents is a challenging juggling act. The city’s median home price of $848,592 is chipped away at by a median household income of just $85,133, meaning residents feel the financial strain even before factoring in savings. The icy job market in Anaheim only increases the pressure—a sluggish income growth rate of just 4.14% and an unemployment rate of 4.7% put the city far off the path of national averages (7.32% and 3.5%, respectively), leaving residents thinking about their financial outlook for today, not for tomorrow.
1. Los Angeles, California
The City of Angels tops the list due to some very simple math: A median yearly income of $76,135 simply cannot stand up to a median monthly housing cost of $3,239. This income-to-housing cost disparity underpins the city’s enormous number of cost-burdened homeowners (46%), and the money can’t be made up in other ways, especially with a cost of living above the national average and a sky-high state income tax rate of 13.3%. Add to this a 16.8% city-wide poverty rate, and it’s easy to see how retirement nest eggs are going untended in Tinseltown.
See the complete report, “Nest Egg Neighborhoods: Best Places to Save for Retirement” on MutualFund.com.
SEE ALSO:
• 10 U.S. Cities with the Highest Retirement Income
• Top Affluent Cities for Retirees in 2024
• 2024’s 10 Best Places in the World to Retire
• Retiring on the Cheap: 5 Countries, 7 U.S. Cities Where You Can Retire on $2,000 a Month