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How Does Your Retirement Savings Compare to Your Neighbors'?

How Does Your Retirement Savings Compare to Your Neighbors'?

September 01, 2021

No matter how well-managed your investments are, trying to estimate the cost of a secure retirement can be a bit difficult. In other areas of your financial life, you may find yourself looking over the fence at your neighbors' yard to see if you're keeping up with the Jones'. Do they have a bigger pool or a better grill? We may subconsciously pat ourselves on the back if we are financially able to compete. 

When it comes to retirement savings, comparing apples to apples can provide you with a general baseline to gauge whether or not you are on track with your retirement plan. Below, we have compiled a guide to retirement costs and income in four Michigan cities. We hope this helps you as you map out your wealth management strategy in retirement.

Grand Rapids, Michigan

Some of the most desirable retirement destinations are those located near major cities, yet those destinations carry the key drawback of a high cost of living and expensive housing. While cities like San Francisco, LA and New York still made the list, Forbes chose Grand Rapids as the best place to retire in Michigan.1

The city touts a myriad of activities found in bigger cities like art festivals and is home to a number of theatres. The cost of living is also  generally lower than the national average. Housing is notably lower than the rest of the U.S. (median $291,700) with the typical home cost being about $230,000 in Grand Rapids.2,3

Housing remains affordable for retirees. Homeowners age 65 and older pay a median of $1,113 per month with a mortgage and $454 without one.4 The average retirement income per household in Grand Rapids is about $17,000.5,6 Grand Rapids' retired cost of living is about 2.2% below the national average.7

Ann Arbor, Michigan

With a population of just more than 120,000, Ann Arbor is one of the most populous cities in Michigan. This comes with some higher costs. In the Ann Arbor metro area, the cost of goods and services is 1.2% higher than the national average and 8.8% higher than the statewide average.8

Meanwhile, housing in Ann Arbor costs remain below the national average, at $270,000.9 A perk for retirees: according to the Trust for Public Land, more than 90% of Ann Arbor’s residents live within a 10-minute walk of a public park. Those parks come in all shapes and sizes: playgrounds, baseball diamonds, skateparks, canoe liveries and disc golf courses.9 

The average retirement income for someone living in Ann Arbor is bit higher than the state average. Data shows the average retirement income in Ann Arbor is about $25-30,000 per year.10,11

Traverse City, Michigan

Traverse City ranked 2nd in Forbes' list of best places to retire in Michigan.1 Rich in historic properties, the typical housing value in Traverse City is about $300,000-$330,000.12,13 Of the four cities, Traverse City also has the highest percentage of people aged 65+. 14 The average retirement income per household is about 22,000.15

Detroit, Michigan

In comparison to Traverse City, Grand Rapids, or Ann arbor, Detroit is incredibly economical.  Even so, Detroit currently sits on the edge of a renaissance and is host to many sports venues. How affordable is Detroit? The median household income in Detroit is $30,894.16  In part to lower housing costs and a lower cost of living, the average SS payment in Detroit is lower than the state average. The government says 85,680 retired people in Detroit were on Social Security during 2017, and they were typically receiving $1,398 a month from the program, or $16,782 annually.17

Michigan Pre-Retirees

In general, Michiganders rank 23rd in the nation in overall retirement savings with an average retirement savings of $419,201.18 For Michigan households getting Social Security, the average total benefit was $20,216 in 2018.19

The cost of living in Michigan is 11% below the national average.20 GOBankingRates estimates that our state's annual cost of living is $45,621.42 and the cost of living after using Social Security Income is above $20,000 per year.21

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We Can Help

How does your retirement savings fare in comparison to your community? There are so many variables when it comes to retirement planning, that pinpointing the exact amount you need can be tricky. This informal guide can lead you in the right direction. The discrepancy between your neighbors’ retirement savings and your own may be because they are based on and calculated with different variables, including the duration of your retirement, your retirement location, and any future medical costs or needs.

With all of this in mind, retirement planning may be daunting, but it is by no means impossible. Working with a financial advisor can enable you to live the retirement lifestyle you're striving for. Get started with us today!


Disclosure

This content is developed from sources believed to be providing accurate information. The material provided is not intended as tax or legal advice. Your retirement savings may differ significantly from others. The discrepancy between your neighbors’ retirement savings and your own may be because they are based on and calculated with different variables, including but not limited to the duration of your retirement, your retirement location, and any perceived future medical costs or needs. The material provided is for general information only. The longevity of your retirement is not guaranteed. Securities and advisory services offered through Centaurus Financial, Inc. Member of FINRA and SIPC. A Registered Investment Advisor. Supervisory office: 2701 Cambridge Court, Suite 525, Auburn Hills, MI 48326, (248) 648-8598. WealthMap Advisors and Centaurus Financial, Inc. are not affiliated.

1. 98.7 WFGR, July 2021

2. Best Places, August 2021

3. Zillow, July 2021

4. U.S. news, Oct 2018

5. USA.com, Based on ACS 2014 Data

6. Senior Care, 2014

7. Kiplinger, June 2019

8. 24/7 Wall St., 2021

9. U.S. News, 2021

10. USA.com, Based on ACS 2014 Data

11. Datacommons.org, 2020

12. Zillow, 2021

13. Best Places, 2019

14. Census.gov, 2019

15. USA.com, Based on ACS 2014 Data

16. Census.gov, 2019

17. 62 CBS Detroit, July 2019

18. Motley Fool, July 20th 2021

19. Mlive, January 2020

20. Best Places, 2021

21. GOBankingRates, August 18th 2021