Wednesday, March 27, 2013

Comparing Retirement Location Costs? Compare ALL The Costs!

There are so many things to consider when looking at retirement locations, it can be hard to keep track.  High on the list for many retirees are the cost of living.  Unfortunately, we often do not consider ALL the costs when considering downsizing or relocating.  When I was first looking at moving to Denver, I experienced some sticker shock.  Then over time I looked at actual costs and changes in my life. In the end I factored all those changes into my financial planning.

I've talked about this process before, especially when talking about the over twenty years I lived in  the Washington DC area inner suburbs.  At first glance, the cost of housing is exorbitant. The costs of many other things (free entertainment and museums, cheap public transit, not needing a car or a second car, competitive grocery prices) make many folks who live there feel that it "evens out".

A first look at housing prices between Denver and Allen/Dallas could be misleading. It is true than on the average, a family home is much more expensive in Denver and than Dallas. Some would leave it at that when considering where to live.  As is often the case, the housing prices tell a small part of the story.

  • It is true that Texas has no income tax (thanks oil companies) whereas Colorado does.  On the other hand, one should compare total taxes (such as the toll roads listed below).  In Colorado, the first twenty five thousand dollars of pension and social security is, I understand, not taxed by the state.
  • The greater Dallas area is filled with toll roads.  A huge city, almost every major artery that is not an interstate is a toll road.  EVERYONE has a toll tag on the front windshield.  Denver has a single toll road (a small part of the outer outer beltway).  Even without being a "commuter" this will save me money. Public transportation is cheaper in Denver, as is gas. New cars are slightly more.  All in all, more than even.
  • Groceries in Dallas are less expensive on the face of it.  Eating out is generally cheaper, even in fine restaurants. As in any area anywhere, shopping and couponing skills will lower my prices-and unfortunately meat is rising everywhere. I will however, miss both Aldis and Trader Joe's.
  • In north Texas, you need both heat and cooling.  Air conditioners are run in the extreme for three to four months a year, and heat is needed in the winter as well. The period of time in Dallas where one can have no heat or air is a few months. Rarely do folks in Denver run their air conditioners in the extreme (even though it was a hundred degrees many days last year). It gets cooler in the night, and there are many months where running air or heat for a small portion of the day keeps homes comfortable.
  • There are many prices that vary so little that many would not consider them different. Clothing, entertainment, and other items come under this category.
Finally, it's worth remembering that relocating in or for retirement often includes at least some lifestyle changes as well.  I needed to take these changes into account when figuring out some semblance of a budget during this first, exploratory year. Here in Denver, apartment prices are very close to mortgage prices in many areas. On the other hand, part of my relocation has been downsizing. My monthly "cost of housing alone" will not go down by a great deal. Separate from that though, many related costs will disappear or lessen. I will no longer have the cost of yard maintenance.  Aside from the energy cost per hour, it will be much less costly to heat 1200 feet than 2400 square feet. Water and sewer costs will go down. In other words, after initial moving and relocation and deposit costs, my expenses will go down.

Finances were not the primary consideration in my decision to relocate.  But it's worth talking about, if only so that others can realize that it's good to investigate all the costs and financial options before making a major decision...............and that as in life, it generally averages out in the end.


  1. Interesting analysis. There are several online calculators that compare cost of living in one city to another. Out of curiosity I went to one and compared Dallas to Denver (they didn't have Allen, TX) and it pretty much agrees with you -- costs are slightly higher in Denver overall, but it's all in the housing. But Washington, DC? Now, that's gotta be expensive!

    1. Housing is unbelievably steep in DC. On the other hand utilities are normal. Two parents and two teenagers survived with one car until senior year. groceries were competitive. Other advantages, such as being in garage sale heaven and free entertainment and historical travel made it worth while.......

  2. You no longer have to drive or fly to see your family that you are so emotionally close to.that is my number one largest cost reduction if I move.your son has a different set of close support now as well.

    1. Well, in theory this is true. Except that I still have a daughter I will be driving south to see.....I agree that I can see already that this is helping my son quite a bit.

  3. You should take into a count the money saved by being close to your siblings. They are a source of support, guidance and love that you would be driving to several times a year. Although you will travel south to see people, I am betting that will decline because people really enjoy visiting Denver.
    Your son has a new source of guidance and support as well.
    This seems to be an excellent move for you!

  4. As you say finances are only a small portion for moving. I would add peace of mind and family as biggys.

    God bless.


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