Where people choose to retire can affect the duration of their retirement savings because of differences in the cost of living.

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Where people choose to retire can affect the duration of their retirement savings because of differences in the cost of living.

It’s a simple concept. Residents spend more money in high-cost communities, and they spend less money in low-cost communities. It matters a lot for retirees on fixed incomes.

The implications can be substantial.

A $50,000 annual income in Seattle is comparable to a $26,686 annual income in Spokane, according to the Sperling’s Best Places website.

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The cost of living in Seattle is much higher, largely because of more expensive housing.

Marc Knauss, a financial adviser with Comprehensive Wealth Management in Lynnwood, says the average Social Security benefit is $16,320 a year.

A retiree living in Seattle on an annual income of $16,320 would have to tap $33,680 a year from other sources, such as savings, to hit $50,000. In Spokane, the same retiree would have to tap $10,366 from other sources to pay for a comparable lifestyle.

To compare the cost of living in various cities, check out Sperling’s Best Places at www.bestplaces.net and click on “compare cost of living.”

 

— George Erb