With a fixed income, retirees need to be careful with their money. Unexpected changes, such as rising costs of living or higher tax rates, can put a huge strain on household budgets. However, it can be a big help if you live in the best location to grow your retirement savings.
learn more: Seven metropolitan Phoenix cities ranked among the top 100 places for retirees to move in 2023
In a new study, SmartAsset analyzed data from the 100 locations with the highest proportions of seniors to reveal where retirement income is spreading the furthest.
To do this, we first looked at average retirement incomes in the 100 areas with the highest percentages of seniors, then applied cost of living and tax rates to find the best places to grow your retirement savings.
To determine where your retirement income will grow the most, smart assets We looked at average regional retirement incomes and applied the cost of living and effective tax rates for 100 locations with a high proportion of seniors.Our findings show that casas adobes, Scottsdale and Peoria rank in the top 20 regions for the highest retirement income.
Adults spend most of their lives preparing for retirement, but reaching their golden years doesn’t mean the hard work is completely done. Retirees need to be especially careful with their money because their income is fixed through Social Security payments, pensions, and conservative portfolio changes. Retirement income can be taxed like regular income, and local living costs can further strain fixed cash flow. So where retirees scrape together the most money doesn’t necessarily tell the whole story. The key to being comfortable in retirement is how far that money goes.
To determine the best places to grow your retirement savings, SmartAsset looked at average regional retirement incomes and applied cost of living and effective tax rates to 100 locations with high proportions of seniors.
- The average annual retirement benefit across the United States is $29,600. Each region has its own average retirement income, which ranges from $12,892 to $65,982. How far these incomes go is determined by local tax rates and the cost of living.
- Palm Bay retirees are the best by a wide margin. Annual retirement income here is $44,724, 15% higher than second place Poinciana, Florida. Palm Bay and Poinciana each offer particularly high retirement incomes, and Palm Bay residents enjoy the added benefit of a lower-than-average cost of living.
- Bethesda and Rockville, Maryland, have the highest retirement incomes. The average annual income for retirees in these DC suburbs is approximately $62,000 and $60,000, respectively. However, due to rising taxes and cost of living, they rank 10th and 13th in terms of how far that fixed income extends.
- Retirees in these Florida areas don’t earn much. Retirees in Tamarac, Hialeah, Lauderhill, Pembroke Pines, Deerfield Beach and West Palm Beach have particularly low retirement incomes, at a low $16,000 per year, after adjusting for taxes and cost of living. This is the lowest retirement income in the world. However, because Florida has no state income tax and average incomes are lower, retirees in these cities pay lower taxes than most cities.
- Of the top 10 cities with the highest retirement income, these two Texas cities have the lowest tax rates. Neither Florida nor Texas impose state income taxes, but Sugar Land and Georgetown, Texas, outperform the other top 10 candidates when it comes to taxes. In these cities, the average tax rate for average retirement income levels is just 19%.
- These parts of Florida have twice the average elderly population per capita. In Port Charlotte, more than 33% of the population is age 65 or older, while in Palm Coast and Delray Beach, more than 29% of residents are age 65 or older. This is twice the national average of 14.77%. However, the areas with the largest populations of seniors are Honolulu, Hawaii, Scottsdale, Arizona, and Henderson, Nevada.
10 places where retirees can earn the most money
- City of Palm Bay, Florida
Palm Bay retirees have the fifth highest average retirement income at $55,437. At this income level, taxes would be approximately 21.7%. However, the cost of living is 3% lower than average, resulting in an average retirement income of $44,724.74.
- Poinciana, Florida
Just over 20% of Poinciana’s population, or 13,531 people, is made up of retirees. The overall average annual retirement income after taxes and cost of living is $38,779.
- Evanston, Illinois
Evanston ranks third overall and also has the third highest average retirement income at $58.559. At this income level, the effective tax rate is approximately 27%.The cost of living in this Chicago suburb is approximately 17% higher than the average location in the United States.
- Casas Adobes, Arizona
Nearly 22% of Casas Adobes’ population is over 65 years old. Although the cost of living in this area is slightly higher than average by 4.1%, the average retirement income for Casas Adobe retirees is $49,638, making him the 7th highest.
- sugar land, texas
The local cost of living in Sugar Land is significantly lower than the average retirement income of $39,498. Generally speaking, the cost of things like housing, groceries, transportation, and other necessities is only about 4% lower than average. Taking this and taxes into account, the average retiree’s income is approximately $33,238.29.
- Springfield, Illinois
Springfield has the 19th highest retirement income, with retirees receiving $40,154 per year, but the cost of living makes up for it, as it’s 7.7% below average. The average tax rate on retirement income is approximately 23.8%.
- Scottsdale, Arizona
Scottsdale has the second-highest number of seniors per capita and the eighth-largest population. The average annual income for over 64,000 retirees here is $45,268, which after taxes (22.66% at this income level) and living expenses (5.8% higher than average) equals $33,087.
- Georgetown, Texas
Approximately 26.5% of Georgetown residents are 65 years of age or older. The cost of living is close to the national average, only 1% higher. The average retirement income of $41,072 would be taxed at approximately 19%. The value of that income after taxes and living expenses is $33,207.
- Bismarck, North Dakota
Bismarck’s average retirement income is $40,012, 20th among the 100 cities with the highest per capita senior population. A cost-of-living premium of 1.3% ranks 36th, making the average salary worth $31,551 after taxes. Of Bismarck’s 74,141 residents, 13,519 are over the age of 65.
- Bethesda, Maryland
Bethesda has the highest retirement income of any area with a large senior population, but this Washington, D.C., suburb has an especially high cost of living, 40.1% above average. He also has the highest tax rate on average retirement income in the study, with an effective tax rate of just over 30%.
10 places with the highest average retirement income
- Bethesda, Maryland: $62,26
- Rockville, Maryland: $60,425
- Evanston, Illinois: $58,559
- Newport Beach, California: $56,009
- Palm Bay, Florida: $55,437
- Poinciana, Florida: $52,311
- Casas Advice, Arizona: $49,638
- Napa, California: $48,444
- Walnut Creek, California: $48,287
- Yorba Linda, California: $48,102