The cost of living when you retire is greatly influenced by the cost of where you’re living when you retire. While many wind up retiring where they lived previously, it’s a factor that advisors — and those they advise — should consider in retirement planning.
While many factors enter into that decision, a new study offers a measure of retirement-friendliness across a range of factors (including the cost of living). A report by WalletHub analyzed the retirement-friendliness of the 150 largest cities in the United States, evaluating those cities across five key dimensions: affordability, jobs, activities, quality of life and health care.
The list itself is interesting enough, but the criteria — and the process used to compile the list — may be more valuable to advisors looking to explore the subject.
The authors note that the five key dimensions were weighted equally, with the exception of “Jobs,” which received a smaller weight. They then identified 25 metrics that were relevant to those dimensions, ranging from cost of living to job prospects for workers aged 65 and older to the availability of recreational activities.
They assessed the costs that retirees would face under the assumption that many of them will have fixed incomes, figuring that the lower their expenses, the better retirees will fare in a particular city. (They chose each city based on the size of its population and excluded surrounding metro areas.)
Their criteria and weighting follow.
Affordability (Weight: 5)
- Adjusted Cost of Living: Full Weight
- States with the Best and Worst Taxpayer ROI Ranking: Half Weight
- Annual Cost of in-home Services: Half Weight
Jobs (Weight: 2)
- Percent of People Aged 65 and Older Working: Full Weight
- Number of Part Time Employees for Every Full Time Employee for People Aged 65 and Older: Full Weight
Activities (Weight: 5)
- Recreation and Senior Centers per Capita: Full Weight
- Fishing Facilities per Capita: Full Weight
- Hiking Facilities per Capita: Half Weight
- Public Golf Courses per Capita: Full Weight
- Adult Volunteer Activities: Full Weight
- Best & Worst Cities for Recreation Ranking: Half Weight
Quality of Life (Weight: 5)
- Percent of Population Aged 65 and Older: Full Weight
- Weather Ranking (Mild Weather) – WalletHub Research: Double Weight
- Violent Crime Rate: Full Weight
- Property Crime Rate: Full Weight
- Air Quality: Half Weight
- Water Quality: Half Weight
Health Care (Weight: 5)
- Number of Physicians per Capita: Half Weight
- Number of Dentists per Capita: Half Weight
- Number of Nurses per Capita: Half Weight
- Number of Health Care Facilities per Capita: Half Weight
- Public Hospital Rankings: Full Weight
- Emotional Health: Half Weight
- Home Care Facilities per Capita: Half Weight
- Death Rate for People Aged 65 and Older: Full Weight
