How Much Do You Need To Save To Retire In San Diego?
San Diego is one of the most beautiful places in the country. It’s known for its gorgeous beaches, unmatched hiking, incredible food, and surfing culture, but it’s also infamously expensive. If you’re interested in retiring in SD, you’ll need to be prepared.
Below, we’ve put together a rundown of the overall cost of retiring in San Diego, including expert tips on how to sustainably live in this dream destination without financial stress.
How Much Retirement Savings Do You Need To Live in San Diego?
If you’re considering retiring in San Diego, it’s worth knowing that you may need an average of about $162,000 per year to make it work. This figure is based on the average cost of living in the area, and it can vary based on your desired lifestyle.
While that number might sound overwhelming, keep in mind that it can come from multiple streams. For example, you can combine social security, payouts from retirement accounts (a Roth IRA, traditional IRA, or 401k, for example), and a passive income stream to get the money you need.
Expert financial advisor Greg Davis, a San Diego native, recommends that retirees “find an appropriate passive income strain that could complement federal income strains.” Davis is emphatic that to retire comfortably in San Diego, you can’t just depend on your IRA or social security. Instead, you’ll need to supplement these federal sources of income with something else.
Passive Income for Retirees in San Diego
Now you know that the best way to get the funds you need to retire in San Diego is to diversify your sources of money and find a passive income stream. This passive source will keep earning you money as you enjoy your retirement, providing extra support to keep you from over-depending on federal sources.
The right passive income source for you will depend on how much cash you have, your business experience, and your personal tolerance for risk. Some forms of passive income can be both lucrative and low-risk, while others might take more upfront investment and carry some potential for big losses. If you’re not sure how to generate passive income, Davis says the best place to start is consulting a financial advisor who understands the San Diego economy.
Buying a Home in San Diego as a Retiree: Expert Tips
San Diego has a reputation for being expensive. The area’s housing market isn’t the only reason for this, but it is one of the biggest contributors. Because of the warm climate, the beautiful scenery, the vibrant culture, and more, San Diego is one of the most desirable places to live on the West Coast. It also has a dynamic job market, which brings new people and families into the area every month.
The demand for housing (especially in close proximity to the beach) makes property in San Diego much more expensive than the national average. However, Davis has several tips that can help you find affordable housing and set aside more money for your other wants and needs.
First, Davis recommends steering clear of beachfront properties because of their inflated price points. Beach real estate in California is some of the most expensive in the country, and it can end up taking a major bite out of your budget. This is especially worth considering if you need to maintain savings for the late stages of retirement, when you’ll need money for assisted living or memory care in San Diego.
Second, Davis advises retirees to pick a property that gives them easy access to fun, free activities, which are abundant in San Diego. If you’re an able-bodied person who loves to exercise, buying or renting near one of the city’s many parks can be an easy way to bring cost-free joy and fulfillment into your life.
Handling Other Costs in San Diego
In addition to being smart about your property, you’ll also need to budget wisely for food, entertainment, and other aspects of your life to stay on track for a sustainable retirement.
Ideally, your retirement budget should leave room for having fun and enjoying all that San Diego has to offer. For example, Davis, a long-time resident of San Diego, is adamant that the dining scene in the city is incredible, mentioning that the area has some of the best carne asada tacos in the US. If possible, you should have enough money set aside for eating out and experiencing the city’s vibrant culture.
However, the best way to create a sustainable budget is to not overindulge. For example, eating out for some meals and shopping at Trader Joe’s (Davis’s personal recommendation for affordable groceries in San Diego) throughout the rest of the week can keep you on track while not sacrificing fun and memorable experiences.
Retirement in San Diego Done Right
San Diego is an expensive place to live, but for many retirees, it’s worth the investment. If you’re interested in retiring in San Diego, reach out to the expert advisors at Heritage Wealth Management to get more expert advice and support as you navigate the planning process.
