Retiring in San Diego
Senior retirement in San Diego becomes increasingly important the older you get, which is common sense. What happens to more than a few people is they become caught up in the workaday world with all its demands, and before they know it what is common sense has become a forgotten priority. Despite what the mainstream media offers in the way of senior San Diego retirement blues, there are many people who have built-in retirement savings “systems” and actually can afford to live relatively carefree of financial retirement concerns. Here are the major groups of San Diego senior retirees and how they should approach retirement.
Low Income Retirees
People who are classified as low income for the purposes of the Federal government can range between $20,000 and $50,000 depending on where you live. This group of San Diego retirement seniors is more likely to depend on Social Security retirement benefits to help pay for their basic living expenses. Note that this group does not include poverty level incomes as it is obvious that these people will have no retirement savings options at all.
401(k) Retirees
Many San Diego senior retirees who are currently employed and are either planning for retirement or who are currently retired have different levels of retirement preparation. One important factor will depend on how much of their income has been invested in their company’s 401(k) plan and for how long. The overall return on investment of the plan will also factor in.
Here are some 2016 statistics according to U.S. News and World Report that will help get San Diego seniors a sense of where they stand financially and what they can expect: (http://money.usnews.com/money/retirement/articles/2016-06-13/how-your-401-k-balance-stacks-up)
- Only 20% of 401(k) holders have balances greater than $100,000
- About 40% of 401(k) holders have balances less than $10,000
- The median 401(k) amount for people who have been working for more than 5 years and are over 50 is more than $77,000
- If your income level is between $60,000 and $80,000 a year and you are over 50, the median amount in your 401(k) is more than $177,000
Government Retirees
Government retirees, which includes San Diego military retirees, have either a general pension plan or a vested pension plan in place. The difference is that the vested pension is guaranteed by the Federal Pension Benefit Guaranty Corporation and therefore is more secure for a San Diego senior retirement plan. But according to a Consumer Reports analysis, there is a total of $1.740 trillion in underfunded pensions at the local, state, and federal government levels.
That leaves the question of how much any retiree should depend on their pension if they are headed for retirement in San Diego. The possibility of reduced pension benefits is a more likely scenario than having your pension income being cut to zero.
You may find yourself crossing over with these plans. For example, you may be a government retiree who also has a 401(k) plan. The concept of creating multiple sources of income for senior retirement in San Diego, including part time work, is becoming more popular as living expenses sans inflation continue to quietly increase.
Retirement Planning
Retirement planning for seniors in San Diego is not an option, but a necessity. There is a direct financial factor to be considered, but health care costs also comes into play. Few people age without any health problems, and pension health care benefits can no longer be counted on for the long term. So taking stock of where you are at overall will give you a guide as to what your major concerns should be as you head for or enter retirement.
Advantages for Preparing to Retire
- You own a house
- There is no mortgage or only a small number of mortgage payments remaining
- Personal savings is at least $50,000 in cash savingsYou have little or no credit card debt
- Car or other transportation vehicles are paid off
Disadvantages That Make Retirement Difficult
- Renting an apartment
- Carry a high debt load
- Have little or no savings
- No type of retirement account – IRA, 401(k)
- You are unable to relocate
Both the advantages and disadvantages add up to one thing – the drain on your total retirement income. If you eliminate the cost of a place to live, credit card debt, and reduce the monthly cost of transportation, you will find that your actual monthly living expenses are very low. The less you have to spend, the longer your retirement savings and income will last as you continue through your senior retirement in San Diego.
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The issue of relocation and transportation requires a special mention. If you live in a city such as sunny San Diego, you will likely not want to move, especially if you are a military retiree. The city and county offer a number of benefits for military retirees because the area generally has a military culture. Even if you are not a military retiree, moving to temperate Southern California makes a lot of retirement sense. But moving is expensive, so whether you choose to live in San Diego, Miami, or Texas it is important for you to be financially prepared for the move. In fact, moving can be a simple way to decrease your monthly expenses by moving to an area that has a lower cost of living.
When to Retire
The issue of retirement age usually lands somewhere between retiring early (before 55) because you can afford to and choosing not to retire at all but to continue working throughout your remaining years. Most people will fall somewhere in the middle, being able to retire between the Social Security age range of 59 and 66 most often connected with senior retirement. For some retirees it is not a complete retirement, as they opt to continue working part time.
Where to retire is often closely related to where to retire. Most people have a preferred location to retire, such as Florida or Southern California. Continuing with our example of San Diego, there are several specific things to look for when deciding where to live, including:
- Availability of retirement communities for living
- Outdoor activities
- Crime rate
- Proximity to major transportation hubs such as airports and major interstates
- Cost of living
These are considerations not just for you personally, but for family members who will come to visit you with your grandchildren and great-grandchildren. San Diego has variety of communities in the city and county (San Diego is a county and a city) which is one reason it has been an attractive location for senior retirees for many years.
Conclusion
Notice that all these various considerations of San Diego senior retirement planning are closely related, with the financial aspect being the most important. But it is clear that looking forward to retirement requires careful retirement planning, often decades in advance. Many adults, after their children are grown and gone, require smaller homes or living spaces that will cost less to own and maintain. Many San Diego seniors also want to travel in their golden years as part of their retirement plans, something that also requires money.
Though the financial aspect dominates, a close second is where to live. This will involve contacting a real estate agent and discussing your options in detail. Choosing to forego the purchase of a home and move to a San Diego retirement community is a commonly chosen option, especially if you plan on doing extensive travel for the first few years of your retirement. Again, making serious retirement plans and discussing your future with a local real estate agent is an important starting point to having an enjoyable and financially secure retirement.
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