This article takes a look at the the best small town to retire where $100k in savings will last you the longest. Check out our full list at 30 Best Small Towns to Retire Where $100K in Savings Will Last You the Longest.
Maximizing Retirement Savings: Top 30 Small Towns Where $100K Lasts Longest
How long does 100k last in retirement? Not that long, if you ask us. According to a 2024 US Retirement Survey, inflation is a major source of stress for individuals, and 89% believe it is eroding the purchasing power of their assets. No wonder participants of the Charles Schwab survey believe they need at least $1.8 million to live a comfortable retirement. Sadly, the median retirement savings for Baby Boomers, based on research from the TransAmerica Center for Retirement Studies, is $202,000 only.
A lack of preparation for retirement, together with rising inflation, longer life spans, and limited savings, are making retirement hard for seniors today. Fortunately, making simple money moves can help seniors retire a millionaire. Even if you’re 50 years old and have no retirement savings, things as simple as making catch-up contributions can get you on the fast track to saving up. On the downside, a potential financial vortex, or simply life, gets in the way of many individuals, keeping them from saving for a comfortable retirement nevertheless. This is the sad reality for thousands of Americans who save nowhere near $ 1 million in savings when they retire.
One economist, Andrew Biggs, says that retiring with a “lot less” is quite possible for retirees. Even as much as $50,000 to $100,000 in total savings can be sufficient to help one retire, notes Biggs. This brings us to the question: how can you live off of $100,000? And more importantly, is the figure enough to last you in your retirement years? Briggs backs up his theory by basing it on a federal Survey of Household Economics and Decision-making between 2019 and 2022, stating how 85% of respondents having $50,000 to $100,000 in savings were doing “just fine”.
Alicia Munnell, director of the Center for Retirement Research at Boston College, doesn’t quite agree and states that retirees are in fact, financially insecure. According to Munnell, many retirees are reluctant to share their financial problems in surveys, which is why we can’t depend on them. The bottom line is, that whether or not one needs a million dollars to retire depends largely on where you choose to live. While making do with a lot less is certainly possible, how much less depends on where you end up retiring to.
Building a Retirement Nest Egg
We all know that tax-advantaged saving accounts like 401(k)s and IRAs are a potential retiree’s best bets for building up a nest egg. Maximizing savings with employer matches and tax benefits can help one save for retirement in the best possible manner. However, another strategy for building up wealth is investing in stocks. When it comes to retirement, your age and date of retirement come to matter a lot. This is because both of these factors gravely impact your risk tolerance, investment horizon, and overall financial goals. That said, the best retirement stocks for retirees are those that have a history of increasing dividends, strong fundamentals, and consistent earnings growth. Aaron Brown, former head of financial market research at AQR Capital Management, states how diversified portfolios of stocks and bonds have been historically delivering a yield of around 4% over the long term, keeping pace with inflation.
As such, dividend growth stocks, in particular, are especially appealing to retirees owing to their steady income streams. Some notable dividend growers that retirees can consider for retirement are NextEra Energy, Inc. (NYSE:NEE), Chevron Corporation (NYSE:CVX), and NIKE, Inc. (NYSE:NKE). NextEra Energy, Inc. (NYSE:NEE) is an American Energy company that has maintained a consistent dividend payment record since 1986. NextEra Energy, Inc. (NYSE:NEE) has been increasing its dividends each year since 1995 and is thus a “dividend aristocrat”, a title given to companies that have increased their dividends each year since the past 29 years at least. The company announced a dividend of $0.515 per share, with the ex-dividend date 2024-06-03.
Next up, Chevron Corporation (NYSE:CVX) is another dividend aristocrat that has paid uninterrupted dividends to shareholders since 1984. It is an American multinational energy company mainly specializing in oil and gas. The company announced a dividend of $1.63 per share. This is payable on June 10, 2024, with the ex-dividend date set for May 16, 2024. Lastly, NIKE, Inc. (NYSE:NKE) is one of the largest athletic and footwear brands delivering innovative products, services, and experiences to its customers. NIKE, Inc. (NYSE:NKE) is also listed as a dividend aristocrat, paying dividends since 1986. To ensure sustainability of dividends, companies must have healthy growth metrics. Companies such as NIKE, Inc. (NYSE:NKE) and Chevron Corporation (NYSE:CVX) enjoy strong revenue models that suggest continued dividend sustainability and growth.
A regional bank in the center of a bustling downtown street.
Methodology
To compile the list of best small towns to retire where $100k in savings will last you the longest, we used our previous lists as well as employed a consensus approach based on forums to develop a list of small towns with a population under 10,000. Next, we ranked the towns on their total cost of living expenses, with the best small town being the one where $100k lasted the longest, together with a modest Social Security check. Towns were also filtered out based on their livability scores so that only the best small towns to retire made our list.
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Here is the best small town to retire where $100k in savings will last you the longest:
1. Princeton, Kentucky
Total Population: 6,210
Annual Cost of Living Expenses: 25,920
Number of Years $100k will Last: 12.6
Livability Score: 75
Based on our methodology, the best small town to retire where $100k in savings will last you the longest is Princeton, Kentucky. Together with a modest Social Security check, your savings can last you around 12.6 years in retirement. This small yet thriving town offers seniors a friendly atmosphere to live in and a great selection of local boutiques, shops, and dining options. For history buffs, Princeton bustles with historic buildings dating from 1817 to the early 1940s, offering them aesthetic pleasure and a chance to explore olden times.
Want to check our more towns where $100k in savings will last you a good number of years? Check out our list here 30 Best Small Towns to Retire Where $100K in Savings Will Last You the Longest.
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Disclosure: None. This article is originally published at Insider Monkey.