In many larger cities across America, $4,000 per month in retirement income won’t provide the most luxurious lifestyle. But there are plenty of small towns that offer a high quality of life on a relatively low income. In fact, in many small towns with high livability scores, $4,000 is more than enough to cover both basic expenses and a mortgage.
To narrow down the very best small towns, GOBankingRates used data from a number of sources — the Bureau of Labor Statistics 2022 Consumer Expenditure Survey, the U.S. Census American Consumer Survey, the Zillow Home Value Index and Federal Reserve Economic Data — to get information on expenses.
Livability data was provided by Sperling’s BestPlaces and AreaVibes. Only cities with between 500 and 15,000 households were considered. Livability index results were given a 50% higher weighting than total monthly costs for ranking purposes. Results are presented here, in reverse order.
University Heights, Ohio
- Total Monthly Costs (Expenditures + Mortgage): $3,178
Ohio is filled with small towns that are relatively affordable, and University Heights is the first of three making the top-10 list. Although mortgages are the priciest in the top 10 at $1,496 per month, grocery, transportation, utility and healthcare costs all run below the national average. The town’s livability index of 89 is also among the best in the country.
New Castle, Pennsylvania
- Total Monthly Costs (Expenditures + Mortgage): $2,436
Just as Ohio is well represented in the top 10, so too is Pennsylvania, which also has three entrants among the leaders. In addition to a livability index of 78, New Castle sports transportation costs nearly 25% below the national average.
- Total Monthly Costs (Expenditures + Mortgage): $2,291
Pampa may not be among the most well-known cities in Texas, but it boasts extraordinarily low housing costs, with the average monthly mortgage reaching just $528. Residents enjoy a high quality of living, as the city has a livability score of 76, and they don’t pay much for their transportation either, as costs run one-third less than the national average.
- Total Monthly Costs (Expenditures + Mortgage): $2,351
Johnstown offers the idyllic one-two punch of a high livability score of 78 and low costs across the board. Transportation is particularly cheap, as the town’s 8,991 households pay more than 15% below the national average.
- Total Monthly Costs (Expenditures + Mortgage): $2,344
Robstown is the second Texas town to crack the top 10, and the small town’s 3,822 households undoubtedly enjoy its high livability score of 78. Transportation and housing are quite affordable in Robstown, where the average monthly mortgage is just $553 and transportation costs run more than 20% below the national average.
- Total Monthly Costs (Expenditures + Mortgage): $2,543
Residents of Tiffin pay less than $1,000 per month on average for their mortgages, and their healthcare and transportation costs are low as well, running 20% and 38% below the national averages, respectively. A good livability score of 82 rounds out the package.
- Total Monthly Costs (Expenditures + Mortgage): $2,994
Kent’s livability score of 89 is among the best in the country. Even though the average monthly mortgage is relatively high for the top 10 at $1,325, groceries, utilities, healthcare and transportation all cost below the national averages.
- Total Monthly Costs (Expenditures + Mortgage): $2,575
Millvale is the third of three Pennsylvania cities in the top 10, and it’s also the smallest in the top 10 as a whole with just 1,640 households. A great livability index of 85 combined with very low overall costs make the town a winner. Residents pay 11% less than the national average for healthcare.
- Total Monthly Costs (Expenditures + Mortgage): $2,618
The costs of healthcare, utilities, transportation and miscellaneous expenses all run 15% to 20% below their respective national averages. The town’s 2,485 households no doubt enjoy Frostburg’s very high livability index of 85.
- Total Monthly Costs (Expenditures + Mortgage): $2,984
Frankfort tops the list based on its affordability but also due to its off-the-charts livability score of 91, tying for best among all 420 cities reviewed for the study. The biggest savings are to be had in the transportation category, which runs 32% below the national average.
Methodology: To find the best small towns to retire on $4,000 a month, GOBankingRates defined small towns as places with the number of households between 500 and 15,000. GOBankingRates found  all the cities in the United States with the number of households between 500 and 15,000, as sourced from the U.S. Census American Consumer Survey. For each qualifying place, the cost of living was found across multiple expenditure categories:  grocery cost of living index,  healthcare cost of living index,  utilities cost of living index,  transportation cost of living index,  miscellaneous cost of living index — all sourced from Sperling’s BestPlaces. Each cost of living index was multiplied by the  national average expenditure costs sourced from the 2022 Bureau of Labor Statistics Consumer Expenditure Survey for someone aged 65 and older to find the average annual and monthly cost of living averages for each small town. The  July 2023 average home value was also found from Zillow Home Value Index, and using the  30-year fixed national mortgage rate sourced from the Federal Reserve Economic Research, the average monthly and annual mortgage payments can be estimated. The mortgage cost and expenditure costs were added to find a total cost of living within each city with all the cities over $4,000 being removed. The livability index was sourced from AreaVibes and included to show the quality of life in each place. The total costs and the livability index were scored, with the livability index being weighted at 1.50 and the costs weighted at 1.0. The scores were sorted to show the best small towns to retire on $4,000 a month. All data was collected and is up to date as of Sept. 11, 2023.
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