6 Things To Do If You’re Forced To Retire in an Expensive City
Written by
Nicole Spector
Edited by
Molly Sullivan
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Most retirees live on a fixed income, one that can make living comfortably in retirement a bit of a challenge. Life can be especially challenging on the financial end if you’re living in an expensive city like Los Angeles, Boston or Miami. Perhaps you’ve considered moving somewhere cheaper. But if you’re strapped for cash and/or are attached to local family and friends for social support or caregiving, moving from, say, San Francisco to Fairmont, West Virginia, isn’t necessarily the best decision.
There are strategic moves you can make to better afford retirement in an expensive city. Below are six expert-recommended things to do if you’re pretty much stuck in a pricey location throughout your golden years.
Consider Downsizing
Reilly James Renwick, CMO at Pragmatic Mortgage Lending, told GOBankingRates that a client of his in San Francisco was finding it increasingly difficult to afford the upkeep of her large family home. To solve this problem, she strategically downsized.
“Selling and moving into a condo nearby not only reduced her property taxes and utility bills but also freed up equity she could use to supplement her retirement income,” Renwick said. “Downsizing doesn’t have to mean leaving your community — it’s about finding a more manageable fit for your lifestyle.”
Take Advantage of Local Senior Discounts and Benefits
You may not be a superfan of identifying as a “senior citizen,” but this is, frankly, what you are if you’re around 65 or older, as most retirees in the U.S. are. Tons of retailers and communities offer exclusive benefits and discounts to seniors. Take advantage of them.
“One couple I worked with in New York City used senior discounts on public transportation, signed up for rent freeze programs and even received reduced utility rates for seniors,” Renwick said. “They were astonished at how these little things added up to big savings. Many cities have these types of programs, but they often require some research or a little nudging from someone like me!”
Practice ‘House Hacking’
Once, a retiree came to Renwick with concerns about having to sell her Los Angeles home — a move she didn’t want to make. So, Renwick helped her come up with an agreeable alternative.
“Instead, we explored the option of renting out her guesthouse on Airbnb,” Renwick said. “Within months, she was bringing in enough money to pay her mortgage. If you’ve got space going unused, this can be a great way to stay put and lower financial pressure.”
Max Out Your Tax Benefits
Regardless of whether you’re struggling to stay afloat in retirement, you need to be well aware of your potential tax benefits. You may not even know what benefits are available to you.
“I worked with a retiree in Chicago who was not aware she qualified for a senior property tax exemption,” Renwick said. “We applied, and now she saves thousands of dollars a year on other living expenses. Many retirees never find these opportunities because they are not well advertised, but boy, do they help.”
Prioritize Squashing Debt
When you’re bogged down with high costs of living in an expensive city, you could be so focused on just getting by, that you stop paying attention to things like credit card debt. Maybe you just feel like giving up on wiping out debt because the financial pressure you’re experiencing is so extreme. You must always keep in mind that credit card debt is possibly your biggest expense. Wiping it out will help set you free.
“Achieving a debt-free status will significantly enhance your financial situation going forward,” said Tim Stassi, managing broker and owner at Dwell One Realty.
Live Frugally — But Not to the Point of Making Yourself Miserable
Unsurprisingly, you might need to live frugally if you’re retired in an expensive city, but don’t think you need to sacrifice your quality of life. You can still have a lot of fun and joy on a frugal budget. Be mindful to avoid becoming frugal to the point of feeling utterly deprived.
“One solution that worked for a Boston client of mine was a desire to cut costs without feeling deprived,” Renwick said. “She started having friends in for potluck dinners instead of going out and found free events locally that were entertaining. She not only saved money but remained socially active, too — a win-win.”
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